RAE Systems’ Bob Durstenfeld told International Longwall News that the venture, called RAE Fushun, was signed in December 2006 and that the groups will be spending the majority of this year bringing Fushun’s accounting and safety in line with US standards.
The project was two years in the works and RAE Systems was the initiator, he confirmed. Fushun Anyi was an attractive collaborator due to its status as a state-run entity, its good reputation and high market share.
“There has been a coal mine safety tax of $2.50 per metric ton since January 2006. This does not seem significant until you understand that 80 percent of China’s electricity comes from coal and that they mined over 2 billion metric tons in 2006,” Durstenfeld said of China’s industry economics.
Because of the country’s terrible safety record, with as many as a dozen miners being killed daily in the country’s operations, he said that the companies’ involvement will hopefully “bring western technology into this market”
RAE Systems already has a strong foothold in the Chinese industry, so the new tie with Fushun is anticipated to be a smooth transition. “This is also our second privatisation in China, so we understand the issues and risks,” he said.
With the venture comes a line of methane pumps, which the companies will join with RAE Systems’ sensors to create solid coverage of the market. Durstenfeld said its detectors already hold the Chinese equivalent of MSHA approvals, so both the detectors and wireless monitors will be available.
“We will also sell a broad array of non-RAE Systems products as most Chinese entities prefer to do business with a one-stop shop,” he said.
Moving forward, the RAE Fushun venture will continue looking at research and development opportunities that were already in the works before the deal was signed. Additionally, he said, its design facilities in Copenhagen, Denmark, San Jose, CA, and Shanghai will be leveraged as part of the companies’ plans.
“We are always looking for other markets where we can extend our business model, but there are no additional agreements planned at this time,” he said.
