PDAC 2020 Presentation – “Relationship between exploration, new mines and equipment sales”

The Parker Bay Company did a joint presentation with Pick and Pen Ltd. at PDAC 2020 in Toronto on March 4, 2020.  In part 1, Chris Hinde of Pick and Pen Ltd. explores recent trends in mining and exploration, major metal mine openings over the past decade and key projects coming online over the next 5 years.  Parker Bay then analyzes equipment deliveries to large new gold, copper and nickel mines over the past 10 years, examining the timing and volume of shipments, and the contribution of new operations to overall equipment demand for these mineral markets.  You can view pdf copies of both presentations using the links below:

2018 Q4 Press Release

The market for large-scale surface mining equipment continues the recovery/expansion that began in the second half of 2016, with the gains recorded in Q4 2018 nearly three times the level reached at the bottom of the four-year long contraction that ended in mid-2016. On a year-over-year basis, deliveries of trucks, excavating/loading equipment and related mobile mining equipment recorded a 35% gain. Viewed in the context of quarterly growth, units shipped increased by just 1% over Q3 while value of these deliveries increase by close to 6%. When these quarterly figures are aggregated and compared to year-ago data, the annual gain is a more impressive. The annual aggregate value of these deliveries is estimated by Parker Bay to have increased from US$5.7 billion during 2017 to US$7.6 billion last year. But as indicated in Parker Bay’s Surface Mining Equipment Index, the global market remains far below the 2012 peak when machine shipments were valued at more than US$14 billion (at constant 2018 prices).

2018 Q2 News Release

Having reached what appears to have been ‘rock bottom’ of the severe, four-year contraction in large equipment deliveries early in 2016, shipments of large mobile surface mining equipment shipped during the last calendar quarter increased by almost one-third (units) with aggregate value increasing by 28% vs. Q3.  These gains came on top of significant improvements during the July-September quarter.  Coupled with a myriad of other markers of mining industry improvement, this may well signal the beginning of a sustainable growth cycle.

2017 Q3 Press Release

Large surface mining equipment shipped worldwide, the latest deliveries to mines during July-September 2017 increased by more than 10%.  Those gains come on top of very strong increases in the previous quarter and bring these equipment markets to nearly double that of the cyclical bottom reached in Q2 2016.  As measured by Parker Bay’s Surface Mining Equipment Index®, the dollar-weighted shipments reached 62.3 (Q1 2007 = 100).  While a very substantial rebound from the depths of the last cyclical contraction, the value of deliveries worldwide remains more than 60% below the peak level achieved in Q1 2012.

2017 Q2 Press Release

Deliveries of large mobile mining equipment to surface/open pit mines worldwide continued during April-June 2017 and the pace accelerated from that of the previous quarter.  The latest gains mark a full year since these equipment markets reach a nadir during Q2 2016 at the end of a four-year-long contraction that witnessed machine shipments decline by more than 75% from the start of 2012.  From this very depressed Q2 2016 base, shipments have nearly doubled over the past year.  Related measures of mining industry activity (mineral production and prices, mining company revenues and profits, capex, acquisitions of major mine assets) all point toward these results continuing for the balance of 2017 and beyond.

2016 Q4 Press Release

Having reached what appears to have been ‘rock bottom’ of the severe, four-year contraction in large equipment deliveries early in 2016, shipments of large mobile surface mining equipment shipped during the last calendar quarter increased by almost one-third (units) with aggregate value increasing by 28% vs. Q3.  These gains came on top of significant improvements during the July-September quarter.  Coupled with a myriad of other markers of mining industry improvement, this may well signal the beginning of a sustainable growth cycle.

2016 Q3 Press Release

Parker Bay’s Mining Equipment Index showed a gain of 6.5% (US$-weighted basis) for the third calendar quarter of 2016 vs. comparable deliveries during the second quarter of the year.  On an unweighted basis (number of units delivered), the gain was much more impressive at 13%.   The difference reflects the much greater gains for smaller machines (though still large by most standards). While these figures are encouraging, in part they reflect the extraordinarily low level of shipments in the first half of this year. Even with further gains in Q4, full-year 2016 shipments are likely to fall below the already depressed 2015 level.  But combined with other measures of mining market activity, these gains may be the start of an industry recovery.

2015 Q1 Press Release

According to industry research specialists The Parker Bay Company, the market for the largest mobile equipment utilized by the world’s highest-producing surface miners retraced modest gains achieved at the end of last year and fell below the lowest levels recorded for the current market contraction. Parker Bay’s Surface Mining Equipment Index fell more than 10 points from 4Q2014 and now stands at just 48.3 (1Q2007 = 100), a decline of more than 70% from the peak achieved in the first quarter of 2012.

2014 Q3 Press Release

After two and a half years in decline, the mining equipment market turned up slightly in the third quarter.  Unit deliveries were more than 12% higher than 2Q though the increase on a value-weighted basis was less than half a percent.  As can be surmised, shipments of the very largest machines continued downward for the most part with growth coming from the smaller products and size classes.  Larger equipment classes typically lag some months behind in the cycle so increasing value as well as unit volume could characterize coming quarterly deliveries.