Industrea has also received approval from the NSW Department of Trade and Investment for its Tier 3 engine package for the IME Minecruiser Mk 7 personnel carrier, which should assist in its sales efforts in China, managing director and CEO Robin Levison said.
“Based on the underlying dynamics of China coal demand, we expect to see significant further contracts for our specialised equipment across much of the Industrea mining equipment range together with the new Chinese manufactured Industrea utility vehicle based on the Minecruiser Mk 7 now approved for sale in Australia,” he said.
Industrea subsidiary, Industrea Wadam, recently signed a $4.4 million contract for supply of two 55 tonne C9 machines to chemical industry group Shennan Industry Development Co for use in Shenmu, Shaanxi Province.
Levison said the build of the 55t roof support carriers was well advanced with delivery expected in late June 2012.
The orders for Industrea mining equipment roof support carriers continues on from strong domestic demand together with growing acceptance in China of the Tier 3 electronic Caterpillar C9 powered long wall roof support carriers, he said.
Industrea Wadam has also generated significant spares revenue with approximately $6.3 million in IME spares and $2.4 million in Industrea mining technology DGS spares since July 2011.
China subsidiary Industrea Wadam (Shijiazhuang) Mining Equipment has successfully tendered to Datong to complete the rebuild and upgrade of two 40t roof support carriers for $1.4 million.
This work will be undertaken at the Industrea Wadam facilities in Shijiazhuang. Flowing from this approval will be the commencement of delivery of pre-existing orders for this high powered, ultra-low emission vehicle for use in domestic underground coal mines.
The company had enjoyed growing demand for its flame-proof, explosion-proof specialised underground mining vehicles both domestically and in China, Levison said.
“With over 150 of our machines already operating in China’s high utilisation environment we see the first refurbishment and upgrade contract from Datong as the start of a trend where the growing base of Industrea Wadam supplied equipment will come back to us for rebuilding,” he said.
“Underground mining equipment in China generally has much higher utilisation than in Australia which increases the refurbishment opportunities. This growing service base is making a significant contribution to the success of our service and support centre in Shijiazhuang and is delivering on our strategy since the acquisition completed earlier this year.
“It is gratifying to see the resumption of a more normal sales pattern for our equipment in China and the potential start of a new business opportunity in the servicing of the large number of Industrea vehicles already deployed in China.”
China’s major coal mining machinery sales value registered robust growth during 2003-2010, at 43% compound annual growth rate.
Historically, coal machinery sales are highly correlated with coal production. However, the coal machinery sales are less correlated with coal prices.
Coal is a major energy source in China with forecast coal production volume to grow at more than 8.5% in 2012 and 2013. Coal mine consolidation remains a key task within China’s 12th five-year plan.