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A call for OEMs to support cost reduction

Published by
World Coal,

A recent survey by Timetric’s Mining Intelligence Centre (MIC) found OEMs risk losing market share if they do not support mining companies in Europe and the former Soviet Union (FSU).

The survey was completed by 100 key decision makers at European and FSU operating mines. Responses highlighted dissatisfaction towards costs connected with equipment, with cost reduction being critical for OEMs to maintain and expand their customers in the region.

There was 16 differing criteria to rate suppliers against, relating to supplier attributes and capabilities, product attributes and costs. The lowest satisfaction ratings were given to ‘lowest price’ and ‘lowest total life costs’. When asked to nominate areas in which their suppliers needed to improve, 56% of respondents in Scandinavia and 44% of respondents in the FSU nominated ‘ability to support cost reduction/minimisation’.

“Decreasing commodity prices in the industry means scrutinising any spending on areas that could be minimised. Timetric’s research demonstrates the current mindset of those mining companies in Europe and the FSU, and the importance now placed on minimising costs where possible. A sizeable share of respondents will switch if their equipment manufacturers do not support them sufficiently with cost reduction,” commented Nez Guevara, Senior Mining Analyst at Timetric’s MIC.

A large portion of respondents emphasised they probably will switch to a different supplier (31%) in the next 5 years. This correlated with the regions having nominated lowest satisfaction with equipment costs, particularly Scandinavia, the FSU and Southern Europe.

An additional, 29% of respondents specified they were uncertain whether they would either switch or remain with their current supplier. Only 40% of respondents indicated they were unlikely to switch.

Edited by Harleigh Hobbs.

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