Mining Equipment Shovels Up Second Boom Year

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“When 2005 is over, mining manufacturers will have sold up to US$3 billion worth of the largest loading and hauling equipment to the world’s surface mines,” said Bristol Voss, President of AllMining (http://www.AllMining.com). Voss was commenting on some exclusive assessments of how the current year’s business is winding up provided by The Parker Bay Company, an Erie-PA based mining research firm, for AllMining (http://www.AllMining.com) of New York.

“When 2005 is over, mining manufacturers will have sold up to US$3 billion worth of the largest loading and hauling equipment to the world’s surface mines,” said Bristol Voss, President of AllMining (http://www.AllMining.com). Voss was commenting on some exclusive assessments of how the current year’s business is winding up provided by The Parker Bay Company, an Erie-PA based mining research firm, for AllMining (http://www.AllMining.com) of New York.

“In the first nine months of 2005, mining supplier shipment figures beat all of 2004,” said Voss. 1443 units of surface mining-sized equipment were sold with a market value of US$2.586 billion, according to Parker Bay. Manufacturers haven’t reported fourth quarter shipments yet, noted Voss. “When we extrapolate Parker Bay figures, we come up with total sales approaching 2,000 units with a market value topping US$3.2 billion,” said Voss.

“It marks the second year in a row of all-out demand for the mining trucks and the large loading equipment - shovels, excavators and loaders - made by such suppliers as Bucyrus, Caterpillar, Hitachi, Komatsu, Liebherr, LeTourneau, P&H, and Terex/O&K,” said Voss.

In all of 2004, 1404 units of mining equipment were sold with a market value of US$2.194 billion. “Notably, the year 2004 was no slouch,” said Voss. “It marked the conclusion of five consecutive years of very lean sales, one of the longest periods of depressed equipment sales activity in the past half-century.”

Creating more manufacturing jobs in USA

Suppliers entered 2005 with lead times as much as 12 months. “One indicator of the strength of the current upturn was the announcement by Bucyrus that it was making its first major expansion at its South Milwaukee facility – for the first time since the mid-1970’s,” said Voss of the 125-year old shovel, drill, and dragline manufacturer.

“Tires, in particular, have been scarce with some sizes taking 18 months to deliver,” said Voss. In December 2005, Michelin said it was increasing capacity at its South Carolina earthmover tire plant, on top of building new facilities in Spain and Brazil.

Tied to record-high commodity prices, boom to continue into 2006

“The boom in mining is tied directly to the sustained high prices the market is paying for metals and minerals,” said Voss. “Gold hit a 24-year high, silver an 18-year high, zinc, a 15-year high, and lead a 25-year high.” It’s not the West that’s demanding these commodities. “China and India are driving demand,” said Voss.

Across the board, suppliers are booked well into 2006 and it's almost a certainty that the current boom will continue through the year. According Peter Gilewicz, Principal of Parker Bay, “Certainly, 2006 looks to be another very good year for large mining equipment manufacturers. But how good is always a hazardous guess.”

As to whether it could top 2005, Gilewicz says, “There are at least a few reasons to think things might soften a bit after two-plus years of all-out demand for new equipment. I don't think 2006 will reach 40-50% increase in equipment shipments over the extraordinarily strong 2005 levels. But that's my guess only.”

If there’s any area that might top 2005 numbers, said Gilewicz, it’s the largest of the giant machines. “I'd watch for the biggest equipment.” How big is big? On the upper end, according to Voss, “Ultra trucks are three stories tall. They carry up to 400 short tons in payload capacity,” said Voss. “One truck can move more than 555 Dodge Ram pick up trucks,” said Voss. [An expanded, 1800 word version of this piece is available from Bristol Voss.]

Data contained in this release are derived from Parker Bay’s proprietary database. The Parker Bay Co specializes in providing individualized market research for companies in the mining, earth-moving and capital equipment industries. Web: http://www.parkerbaymining.com

Media Contact:

Bristol Voss, President

AllMining (http://www.AllMining.com)

Tel: 1-212-360-7031

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