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German mining machinery manufacturers anticipate 3% sales decline

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World Coal,

Mining machinery manufacturers in Germany are expecting a 3% fall in international sales for the current year, 2015, but are positive for the future.

A downward trend has continued to affect the domestic market for mining machinery manufacturers in Germany. Increasing supplies of raw materials, particularly metal, together with a large fall in prices have impacted the industry.

Political discussions about the future of lignite fuelled power stations “is putting pressure on investment levels”, said Dr Michael Schulte Strathaus, Chairman of the Mining Association in the German Engineering Federation (VDMA), at the annual press conference in Essen, Germany. He announced a decline in sales of some 8% to €210 million for the industry in the current year. A continuing decline in profits is expected for 2016.

The industry expects a 3% drop in sales to €3.62 billion for the current year. Manufacturers have a positive outlook on the future.

The Mediterranean and Middle East account for the largest export markets (17%). Saudi Arabia has become the largest customer with an 8% share. Together with Iran, governments there want to reduce their dependency on oil, according to Schulte Strathaus. Mining is being developed as an additional mainstay. Latin America is the second biggest sales region with an 11% market share, followed by China with 8%, the US with 7% and Russia with approximately 5%.

Schulte Strathaus indicated the president blames the expected continued declines in the future on weak investment levels due to continued poor results from raw material producers. They are currently fighting falling prices by shutting down production plants. Some analysts expect the copper surplus to turn into a shortage as early as 2017. Schulte Strathaus explained that despite these difficulties, mining machinery manufacturers have stayed positive and avoided cutting jobs – employees fell by only 600 to 13 700 over the last year.

Despite current declines, mining machinery manufacturers hold a positive outlook on the future. Some companies have reported rises in customer enquiries and some sectors are developing new areas of business, such as in hard-rock mining.

Manufacturers see the need for raw material producers to reduce costs as a further cause for optimism, since this can only be achieved by increasing efficiency. “And that”, said Schulte Strathaus, “is where our machinery and plant come into play”. He believes a global trend toward increasing safety will also benefits German manufacturers. He also believes that the next construction industry trade fair, to be held in Munich in the coming year, may well “provide a certain boost”.

Schulte Strathaus has welcomed the establishing to date of four competence centres for mining and raw materials by the Federal Ministry of Economics. Their brief was to promote the government’s renewable resources policies on site in Canada, Chile, South Africa and Australia. Two further centres are planned in Brazil and Peru.

Manufacturers are cooperating closely with these institutions. Schulte Strathaus said: "This also helps us to win new clients and orders”.In order to maintain their leading position, particularly in the underground mining sector, manufacturers have been involved with Industry 4.0, “for much longer than the term even exists”, as Schulte Strathaus remarked. The industry presented the first machinery to mine coal or other material entirely independently and autonomously in early 2010, and in global comparison is “certainly at the forefront” of modernising its own production facilities.

Edited from press release by Harleigh Hobbs

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