Caterpillar – Bucyrus: A ‘Done Deal’. Now What? (July 8, 2011)
Having received the last required regulatory approval – from the Chinese Commerce Agency on July 8th — Caterpillar wasted little time completing the acquisition of Bucyrus International, bringing together two of the strongest and highly complementary product lines in the mining equipment industry. The “Bucyrus” name will give way to an all-“Caterpillar” branding, and Bucyrus’ direct product support organization will give way to Caterpillar’s highly-regarded network of independent dealers who might find servicing a 6,500-ton dragline a new and challenging experience. But there’s little doubt that the combined entity changes the mining equipment supply landscape and competitors may be plotting their responses. Joy Global’s P&H Mining Equipment recently announced the acquisition of LeTourneau and its storied wheel loader line, which may well have been prompted by a perceived need to ‘get bigger’ to better compete. Further industry consolidation or joint ventures may be in the offing.
Parker Bay’s Mobile Mining Equipment Database service offers a unique way to evaluate this game-changing merger as well as opportunities for further consolidation.
Coal Mines join the parade of acquisition targets (June 14, 2011)
As commodity prices soared and mining activities picked up to meet growing demand from emerging economies (i.e., China, India, Brazil), mining companies or individual mines have become increasingly attractive acquisition targets. While metal miners have been the predominant targets thus far, recent bids highlight a growing interest in coal mining: Rio Tinto’s US$4 billion purchase of controlling interest in Riverside and its high-potential Mozambique developments; Alpha Natural Resources US$7 billion takeover of troubled but high volume met coal producer Massey Energy (U.S.); Arch Coal’s US$3.4 billion bid for ICG (U.S.); even several smaller mergers like Gloucester’s US$400 MM bid for Donaldson. But there are plenty of available targets. Parker Bay’s Database identifies over 400 surface coal mines producing 2.2 billion tons annually and utilizing over 20,000 pieces of large mobile equipment valued at nearly US$60 billion. The ten largest producers – Alpha, Anglo American, Arch, BHP Billiton, China Coal/Pingshuo, Cerrejon, Coal India, Peabody, Rio Tinto and Xstrata – control less than a third of these operations (with nearly 8,000 machines in place), leaving ample opportunity for coal miners of varying size to get bigger in a hurry.
Mining Equipment Market Recovering from 2009 Downturn (April 5, 2011)
It’s not exactly news to the companies involved in selling or buying the large mobile equipment used in the largest surface mines, but the 2010 shipments data now available from Parker Bay confirm what’s been happening over the past year. Shipments of mining trucks, shovels, loaders, draglines, drills and dozers declined by roughly one-third between 2008 and 2009. The recovery was slow early in 2010 but accelerated through year-end as mining companies translated sharply higher CapEx budgets into machine orders. A good example of this: shipments of large mining trucks (90-metric ton payload and above) declined from nearly 3,200 units in 2008 to just over 2,000 deliveries in 2009. The total for 2010 was up by more than 25% but still nearly 20% below the 2008 peak shipments. However, fourth quarter delivers were within a few percentage points of record levels. All the details for the truck market and other major surface mining equipment are available through Parker Bay’s Mobile Mining Equipment Database service.
Mergers transforming mining industry a few billion at at time (February 6, 2011)
After several transformative mergers failed in 2010 – BHP Billiton/Potash Corp., Xstrata/Anglo; BHPB/Rio’s Western Australian Iron Mine Combination — it appears a new and rapidly developing round of mining mergers in 2011, all valued under $10 billion, are changing the industry landscape in smaller but substantive steps. Cliffs takeover of Consolidated Thompson (US$5 Bil); American Natural Resources acquisition of troubled Massey Energy (US$7 Bil.); the Inmet/Lundin ‘merger of equals’ (US$9 Bil); Kinross’s US$7 Bil. takeover of Redback; and Rothschild-backed Vallas’ US$3 Bil. combination of Bumi and Berau Coal: All will have significant effects on specific geographic and mineral market segments. More to come?
Caterpillar / Bucyrus announce US$8.6 billion merger (Nov. 15, 2010)
How will it affect the mining and mining equipment industries? Data and analysis from Parker Bay can help answer some of the questions this industry-changing combination raises whether you’re a miner, an industry supplier, or an investor.
