EQUIPMENT FINANCE, RENTAL AND LEASING
provide varying levels of maintenance and repair
support depending on the mine’s requirements.”
This neatly recalls van den Berg’s point about
mining equipment finance providers being more
than just sources of cash, but solution providers
able to support mining companies over the
lifetime of the chosen operation.
van den Berg provides a useful example to
back this up: “We get requests from mines
operating outdated machines where production
levels and, therefore, cash flow isn’t where it can
be. Sandvik comes in with a multi-disciplinary
team, analyses the situation, assesses what the
best alternative is for the mine, applies what
impact that alternative will have on the cash flow
and then structures a financial product around it
that will let them achieve that cash flow.
“A bank or generic financial institution might
just look at the current balance sheet and profit
and loss and decide not to finance the same
initiative as the customer’s credit score does not
support it.
“That is where we can add value over the
customer’s house bank or other financial
institution,” he said.
These are strong attributes that separate the
financing arms of equipment providers from the
rest of the financial community, but sometimes
they do not prove enough to win business.
Ask any mining company for their main
concern during the most recent upswing and the
most likely answer will be equipment lead times.
The amount of time companies had to wait for
ultra-class off-highway trucks was well
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32 International Mining | APRIL 2019
documented during the boom, but they were also
waiting for at least a year to receive new large
excavators, drill rigs and dozers.
The mining equipment manufacturers are not
as stretched as they were then – there are not as
many new projects or expansions going ahead as
there was during the boom – but there is an
evident order backlog.
This is leading some companies to consider an
alternative equipment avenue: rental.
Rapid rentals
When it comes to mining equipment rental it
doesn’t come much bigger in Australia than
National Plant & Equipment.
Part of the National Group, the company
specialises in the provision of heavy earthmoving
equipment to the mining and civil construction
sectors. It has over 250 units of heavy earth
moving equipment available – with a particularly
focus on ultra-class machines – and fleet-wide
availability of over 90%, it said.
The company has been winning a lot of
business in the Australia coal sector of late, from
major companies like BHP, Anglo American and
Idemitsu. This has seen it recently deliver five
new 400-ton (363-t) Liebherr T 282 C dump
trucks to BHP’s Peak Downs coal mine, a Liebherr
R 9800 excavator and three new Komatsu 930E
dump trucks to Idemitsu’s Boggabri coal mine,
and 16 Komatsu 830E dump trucks to Anglo’s
Capcoal and Dawson mines, all in Queensland.
Mark Ackroyd, Managing Director of National
Group, explained why the wider equipment rental
market in Australia might appeal to such
companies, regardless of where the sector is in
terms of the commodity cycle.
“Although the big miners do sometimes buy
equipment outright, rental is often an attractive
option for companies as it provides them with
additional flexibility to meet project needs
without running the risk of under-utilising
assets,” he told IM.
“The National Group has been able to
demonstrate to Tier 1 miners a significant
increase in utilisation rates due to the sheer size
and availability of our equipment,” he added.
He then put this opinion into today’s context:
“Capex is still a big concern for any major mining
house at present, so it’s often better to lease or
hire equipment as opposed to owning the
equipment outright as lead times for new
equipment are quite long.”
He claimed larger equipment can take up to 18
months from the date of order to receiving it in
the country. “Even large trucks that fall outside
the ultra-class bracket, such as 210-ton (191-t)
capacity models, can take up to nine months in
the current market,” he said.
“So now the upswing has come back in, new
equipment lead times – even if it’s a smaller