What is your view on the current market for large mining equipment segment in India?
We have seen increase in enquires for large mining equipment segment in India in the last six months. Public Sector Units (PSUs) contribute to most of the increase in enquiry. From private miners, contractors or mine developer-operators (MDOs), the enquiry flow has just begun to come in. Large mining equipment segment is set to grow.
What is your assessment of the Indian market for large mining equipment categories, over the next 5-10 years in terms of numbers and value?
Large mining equipment's entry depends on different phases of project implementation. Summing the total numbers in different detail project reports of forthcoming and initiated projects, it becomes a whopping number. Post 2009, large mining equipment has entered in bulk for three large coal projects and one ongoing metal mining project only. It was fairly inconsistent and unpredictable till date, specifically in stagnating years of 2013 and 2014. If, (i) commercial mining is allowed, (ii) cost of imported coal and commodities go up to its previous highs in the near future, (iii) land and regulatory bottlenecks are removed, and (iv) domestic commodity demand increases, a giant leap in large mining equipment will come.
What will be the deterrents? Will used and rental equipment be significant show-stoppers?
The deterrent will be skilled maintenance personnel for this kind of specialised equipment. In the last 10 years, with slow infusion of such equipment in the Indian market, the OEMs, dealers or users, coped up well by adding people. But any massive infusion will create shortfall in that area which cannot be made up in one or two years and cannot be managed by putting new talent in such assignments.
What will be the key performance factors for each category of equipment? What can be the return on capital and break-even point?
The key performance indicators for large mining equipment are availability and utilisation achieved. An achievement of consistent 5,000 hours per year over the economic lifetime of equipment in coal mining with consistent 85 per cent availability is taken as excellent performance. As these equipment are discrete components of a mining system, break-even point or return on capital is found out in indirect and discreet ways. At present contract prices, the equipment payback in within 3-5 years.