Earthmoving firms agree: Mining is on the upswing

MBONGENI MGUNI
Staff Writer | Friday February 26, 2010 00:00

 

Traditionally, the mining sector's recovery or deterioration can be seen in the uptake or slump in the sale of equipment such as earthmovers, excavators, backhoe loaders and dump trucks, among others.

This week, earthmoving suppliers and contractors said the volumes of enquiries and orders seen since the beginning of this year was indicative of recovery in the mining sector. They say in some cases, the level of enquiries thus far this year surpasses that of 2009, the year in which the global recession brought Botswana's mining almost to a halt.

Activity in the mining supplies industry has also been accelerated by the P3.4 billion Cut 8 project which involves the expansion of the Jwaneng Mine pit. The developers Debswana Mines and contractors already on site are leading the uptake of earthmoving and other mining equipment. Expressing confidence that the mining sector is on an upswing,the Manager of Terex Botswana, Wimpie Van Wyk, says signs of recovery are evident. 'We are definitely receiving more enquiries than last year and we are seeing more activity in the industry,' van Wyk says.

'We also see interest in the more expensive units; these are the ones that are popular at the moment.

Terex is among the biggest earthmoving companies in the world and in Botswana. It is involved in supplies to Debswana Mines and Morupule Colliery, among others.

The Sale Manager of Tractor Grader Supplies (TGS), Mosa Mphela, says business is generally on track and was largely unaffected by the slowdown in mining last year. TGS supplies New Holland, Hitachi and Mitsubishi earthmoving equipment mainly to contractors involved in mining and the construction industry. 'We are selling well and have not felt the impact of the recession because our business also supplies to construction,' Mphela says. 'Last year alone, we sold 18 Hitachi excavators and the contractors we sold these to were not only relying on the mining industry. We foresee a busy year again this year'. The country's twin titans of earthmoving equipment, Barloworld Equipment and Komatsu, have different takes on the recovery of the mining sector.

Komatsu's Managing Director, Martin Cowley, has expressed optimism in the mining sector's performance thus far this year. 'This year has seen much more potential from the mining sector which can only be viewed as a real positive,' he says.

However, the Sales Manager of Barloworld Equipment, Joe Selaledi, has had a different experience: 'We have not had any order from mining in the last two years. Nothing has changed and this is due to the downturn in mining.'

Echoing the latter's sentiments, the Managing Director of Equipment Sales, Willie Crosby, says the recession continues its stranglehold on capital equipment sales. 'The mining industry is not yet in a spending mode,' Crosby says. 'We have had a few small contracts with the mining industry and they have asked us to cut these back.

'Cut 8 is there but there's no visible outflow. They have given one or two external companies orders. It's not as though there's big action; maybe in due course.

We have only had one request for a quotation for a small job from Cut 8. Government is also not supportive; not issuing contracts or anything.Conversely, officials at local mining contractor, Makgarapa Products, say the mining sector is on the upswing, with enquiries and orders for maintenance works coming from the mines.

Makgarapa's Director, Christiaan Vorster, says positive signs abound in the mining sector this year compared to the whole of last year. 'We have seen a lot of enquiries, mainly for maintenance as opposed to capital development,' Vorster says. 'Last year, however, even maintenance work was very low. 'This year, we are getting maintenance work, which is a positive development that shows there's money to be spent in this activity. Mines carry out maintenance annually, but funds can hamper this. As a result of the maintenance work, we are very confident in the mines this year and we are looking forward to good business'.Makgarapa has extensive experience in contract works for mines such as Jwaneng, Orapa and Morupule Colliery.

Technically, Botswana emerged from the recession in June last year and continued the recovery through the quarter ended September.

While figures for December are yet unavailable, the trend is expected to continue. However, while output is no longer declining, real Gross Domestic  set of the global recession in September 2008.

This year, the government expects the economy to grow by five percent, on the back of the recovery of the diamond industry, mining in general and sustained government spending.