The company said the new equipment would underpin its growth strategy and take advantage of the strong outlook for equipment rental markets.

Of the investment, $93 million will go towards the Australian business, with the balance going towards the Canadian market to service the oil sands and coal sectors.

“We continue to observe high levels of mining activity in Australia, Canada and Indonesia which is translating into demand for Emeco’s rental offering,” Emeco chief executive officer Keith Gordon said.

“Despite some recent operation and weather issues, which have dampened our earnings in the second half, we expect to deliver a solid result for financial year 2011 with strong momentum going into financial year 2012.”

Emeco said it expected full year profit to be $55-57 million, compared to $41.1 million last year.

The December 2010 half year profit was $29.5 million, but the company said equipment utilisation rates were lower at 83% in the current half year period compared to 88% in the previous six months, due to cold weather in Canada and wet weather in Queensland.

Full year fleet utilisation has averaged 80% in Canada, 88% in Australia and 78% in Indonesia, though the company will be demobilising 28% of its Indonesian fleet due to a debtor impairment.

“Given the healthy outlook for mining volumes we are investing in large mining equipment to meet growing demand for our customers,” Gordon said.

Sustaining capital expenditure in the 2012 financial year is expected to be $110-130 million, while growth capital expenditure is forecast at $165 million.

Emeco plans to fund the growth out of cash flow and debt facilities.

Shares in Emeco gained half a cent to $1.035.