Demand for mining equipment will probably remain “tough” in the next financial year as an extended slump in coal mining activity in Indonesia overshadows major miners’ growing appetite for giant machines, according to Komatsu Ltd, one of the world’s top two producers.
The maker of dump trucks and excavators expects demand in Indonesia to remain weak at least through the first-half of the year starting April, Yasuji Nishiura, vice president of the mining business division at Komatsu, said last week in an interview in Tokyo.
About 40% of Komatsu’s sales come from mining customers, and the rest from construction equipment.
Komatsu has warned demand for mining equipment is poised to fall by 10% to 20% in the year through March.
Profits at the Japanese company declined by more than a third in the second quarter on lower sales in China and Southeast Asia.
It also cut its outlook for the year as the US-China trade war threatened to further weaken demand.
Still, demand in the longer run should pick up in the Southeast Asian nation as the need for coal-fired electricity to support economic growth will increase mining of the fossil fuel, according to Nishiura.
Sales in Asia, excluding Japan and China, made up 10% of Komatsu’s total equipment sales in the first six months of the current fiscal year, and were down from 15% a year earlier.
Major miners are also showing increasing interest in new machines, particularly autonomous trucks, to be deployed in Australia, North and South America, Nishiura said.
The company, which was the first in the industry to introduce the driverless haulage system a decade ago, plans to double its fleet of mining autonomous trucks to 380 units by 2021 from about 200 units now, he said.
In September, Komatsu signed a deal with BHP to supply 41 super-large dump trucks that can be converted to autonomous ones for the South Flank iron ore project in Australia.
Last month, it also won an order from Vale SA to supply 37 autonomous trucks for the Carajas mine in Brazil, its first contract for the product in the country.
One of Komatsu’s focus areas in 2020 is to develop new underground equipment used to dig and haul metals, such as copper, nickel and gold, to meet the needs of customers who want safer and cleaner machines, Nishiura said. US-based Komatsu Mining Corp, formerly Joy Global Inc, which Komatsu acquired in 2017, has designed hybrid load-haul dump trucks that can increase fuel efficiency by up to 30%, compared with conventional models.