The Asia Miner

APR-JUN 2019

The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region

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VDMA 42 VDMA MINING SUPPLEMENT • 2019 Mining Whether they are building screening machines, high- pressure pumps or hydraulic excavators for mining operations, the message is very similar and clear. Last year was a good year and 2019 should be better. This year's Best of Germany showcases great examples of German companies supplying solutions for mines around the world. The German Engineering Federation (known by the acronym VDMA) represents more than 3,200 mostly medium- sized companies in the mechanical and plant engineering sector. With 1.35 million employees and sales amounting to approximately EUR 226 billion, it is the largest industrial employer in Germany and one of the leading German industrial sectors. The Mining Division of the VDMA is a small, but important subset that has about 140 members. What separates these companies from their counterparts is the German dedication to craftsmanship, their expertise and the fact that many are privately held, which allows them to be nimble in many areas, especially as to how they approach the market and new product development. Combining the power of the Internet of Things, or Industry 4.0, with real-time data analysis, they have developed some great concepts for moving miners out of harm's way and improving ef fi ciency. Sadly, for German mining equipment manufacturers, their domestic market is fading away and now only plays a minor role in their business plans, with total turnover expected to decline by 22% to EUR 90 million in 2018. According to Dr. Michael Schulte Strathaus, chairman of VDMA Mining, the current policies demonstrate little affinity to the business of raw materials, and therefore mining, and are highly unlikely to provide any impetus for domestic business. Similarly, little or no growth is expected from German potash and salt miners, as Schulte Strathaus emphasized during the association's annual press conference. The sector expects a further decline on the domestic market in the coming year, with the best-case that of a stagnating turnover. Germany's mining equipment industry is therefore becoming increasingly dependent on foreign business. While Germany's last hard coal mine was closed recently, Poland is currently expanding its hard coal mining activities to reduce its dependence on imports. According to the forecast by VDMA, export revenues will increase by 40% to approximately EUR 3.6 billion and 25% of exports are delivered to countries in the European Union (EU), a figure that has declined from the 31% in 2017. The biggest customers are Italy, Austria, Poland, France and Belgium. As Schulte Strathaus explained, the market is primarily marked by major infrastructure projects that will gradually be completed, and there are currently no adequate replacements in sight. VDMA is therefore expecting stagnant exports to EU countries in 2019, with a slight increase at best. According to calculations by VDMA, the USA's share of the total export volume will increase from 15% in last year to 17% this year. Schulte Strathaus cited the changes made by President Donald Trump's administration regarding energy and regulatory policies as the reasons for this development. A clear direction on energy policy has led to an increase in the use of hard coal in the USA. A shift in regulatory policy has created a better investment climate for mining in the USA. This has led to considerable demand for machines that can increase productivity, and consequently, profit; a development Be Y ond q ualit Y , g er M an s uppliers o ffer s afe and s M art s olutions German mining equipment manufacturers are looking forward to doing more in 2019

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