Mining equipment manufacturer, Joy Global, has reported an operating loss of US$5.2 million for the three months ending 29 July, compared to an operating profit of US$82.2 million in the same period last year.
“The US$87 million year-over-year decrease in operating income in the quarter was due to lower sales volumes, unfavourable product mix, lower manufacturing absorption, restructuring charges and merger costs,” said the company. The company also recorded interest payments of over US$11 million, bringing the loss before income taxes of US$16.2 million.
Sales were 30% down in the company’s underground segment at US$318 million and 21% down is the company’s opencast segment at US$288 million. Services accounted for US$468 million of the sales, while original equipment just US$118 million.
Original equipment sales in the underground segment were down 40% year on year with declines in Africa, Australia and China more than offsetting increases in Eurasia and North America. Service sales in the underground segment fell 25% with service sales in the US down 30% year-on-year.
On the opencast equipment sales side, original equipment sales were down 31% year-on-year, with an increase in Australia more than offset by declines in all other regions. Service sales were down 19% with declines in all regions apart from Eurasia.
Despite the operating loss, the company squeaked into profit after a US$16.4 million rebate of income taxes resulting in net income of US$0.128 million. This compares with next income of US$51.3 million in 1H15.
Joy recently announced that it had accepted a takeover offer of US$3.7 billion from Komatsu, which will leave the mining equipment market dominated by the Japanese firm and US rival, Caterpillar.
Edited by Jonathan Rowland.
SIMEC Group, a global commodities company, has announced the appointment of a new head of coal to spearhead the company’s expansion into the coal sector. Raffaele Miscoria will take up the role at the company’s new operational centre in Geneva, Switzerland.
Before SIMEC, Miscoria had roles at Swiss-Italian coal trading company, Coeclerici Compagnie SA, and at Macquarie, an Australian bank, where he has responsibility for the Atlantic physical coal trading book.
“We are very pleased to be taking Raffaele on,” said Piero Piccolo, SIMEC’s European CEO. “His experience in identifying new opportunities, leveraging relationships, as well as his exposure to market arbitrage match SIMEC’s plans for robust expansion in the coal industry.”
SIMEC Group operates within the shipping, industrial, mining, energy and commodities business. The company owns coal mining, power and trading operations.
Edited by Jonathan Rowland.
Hamburg-based ship management company E.R. Schiffahrt has reported it intends to expand its strategic partnerships with international clients and shipping lines.
For Nippon Yusen Kaisha (NYK) – one of the largest shipping companies in the world with nearly 800 vessels – the team in Hamburg is set to manage two newcastlemax bulk carriers with a dead weight capacity of around 210 000 t.
The handover of Dawn Horizon, a three year old vessel measuring 295 metres, took place in Caofeidian, China, on 30 July 2016. The second ship will be added in September 2016.
The management contracts were signed at a ceremony in the German Embassy in Tokyo on 1 September 2016 and include crewing and technical operations as well as quality management, safety, environmental protection and energy efficiency.
This development increases E.R. Schiffahrt’s proportion of third-party clients to around 50%.
Nils Aden, CEO of E.R. Schiffahrt, is pleased with the new order from Japan and commented: “The mandate from NYK confirms the strength of our performance and our competitive position, and it represents a major vote of confidence. We very much look forward to a successful cooperation with another well-known top player in the market and, as for all our clients, we aim to secure a long-term personal partnership.”
Edited from press release by Harleigh Hobbs
Australian coal company, Wollongong Coal, has confirmed that it is under investigation by the New South Wales mining regulator following allegations that the company is not a “fit and proper person” to hold a mining license.
“This is a company on the bring of insolvency, seeking approval to undertake one of the riskiest mining operations in New South Wales under the catchment that supplies drinking water to our largest city,” said Nic Clyde, NSW Community Coordinator for anti-coal activist group, Lock the Gate Alliance.
Lock the Gate Alliance originally submitted a complaint against Wollongong’s standing to be a “fit and proper person” to hold a mining license last October.
The complaint alleges that the company’s risk of insolvency, poor record on environmental compliance and legal difficulties facing its parent company in India make it unift to hold a mining license under the New South Wales Mining Act.
Aside from confirming that an investigation is underway, Wollongong provided no comment on the specifics of the investigation. It did however assure that it would cooperate full with the mining regulator, calling the allegations “completely baseless”.
The company also indicated it would challenge any ruling against its standing to hold a mining license. “Wollongong Coal reserves the rights to take appropriate action in relation to any determination that it is not a fist and proper person for the purposes of the Mining Act 1992,” the company said.
Edited by Jonathan Rowland.
Rio Tinto has completed the sale of its 74% stake of Zululand anthracite mine to Menar Holding, for an undisclosed sum.
This underground mine in Zululand, South Africa, produces premium quality anthracite for international and domestic customers and has more than 1300 employees and contractors.
The remaining 26% of the mine will continue to be held by its Broad-Based Black Economic Empowerment partner, Maweni Mining Consortium Pty Ltd.
Menar has a proven track record of operating and investing in South Africa through its controlling interest in Canyon Coal, which owns three coal mines in Mpumalanga and other coal projects in Mpumalanga and Gauteng.
Rio Tinto has a long-standing relationship with South Africa and continues to invest in Richards Bay Minerals and exploration for other minerals in the country.
Edited from press release by Harleigh Hobbs
Stanmore Coal reported first coal sales revenues of AUS$12.7 million in the financial year to 30 June 2016 (FY2016) as the company moved from coal explorer to producer with the acquisition of the Isaac Plains mine. And recent price rises for both hard and semi-soft coking coal provide a positive outlook for sales revenues going forward.
“We are delighted to have successfully completed the transition from explorer to producer in FY2016 through the recommencement of operations at Isaac Plains,” said Stanmore’s Managing Director, Nick Jorss. “Notable we transitions from care and maintenance to first overburden removal within three months with first coking coal sold to major steel mills within six months.”
The start of coal sales helped to partially offset initial capital costs involved with the acquisition and start up of the mine, as well as working capital requirements related to Isaac Plains mining activities. The company also booked an AUS$13.9 million writedown of its development assets in the Surat Basin.
Overall the company booked a loss of AUS$19.7 million in FY2016. The company is positive looking forward, however. “The coking coal market has tightened considerably since we acquired Isaac Plains with spot hard coking coal rising by over 70% since January this year when it stood at a multi-year low,” said Jorss.
“This recent strength in pricing is timely as we move from restart of operations into production and prepare for the lower-cost expansion at Isaac Plains East, where we are targeting approvals in calendar 2017,” Jorss concluded.
Edited by Jonathan Rowland.
NEPEAN Conveyors has awarded a circa US$50 million contract from major coal miner Yancoal Australia Pty Ltd (Yancoal) to design, develop and install a complete underground to surface conveyor system for the highly anticipated Moolarben coal complex in New South Wales, Australia.
The company was able to provide a complete conveyor package solution with a superior technical offering that also met Yancoal’s need for urgent and reliable, on-time delivery.
The project consists of an 1800 mm wide drift conveyor, an 1800 mm underground trunk conveyor, complete with three 1600 mm wide underground maingate conveyors, to handle 4500 short tph production from the longwall system.
The contract was signed in February and construction works have been progressing on schedule with main drift works set to be completed in September. The underground trunk and maingate construction works are also progressing and are planned to be completed in accordance to the delivery schedule.
At full production capacity, the Moolarben complex will produce 17 million tpy of ROM coal and employ approximately 450 personnel.
Edited from press release by Harleigh Hobbs
A petition against the proposed Hume Coal project in New South Wales’ Southern Highlands has garnered enough support to trigger a New South Wales Parliamentary debate.
The Battle for Berrima petition was signed by over 16 000 people, well above the 10 000 limit required to prompt a debate in the state parliament. The petition was handed over to local MP Pru Goddard, who has committed to sponsoring the debate, last month.
“This is an incredible demonstration of the simple power of democracy and the right of all citizens to make their views known to their elected representatives,” said Battle for Berrima President, Jock Pharey.
Hume Coal criticised the petition of Goddard, who represents the constituency of Goulburn, for ignoring the statutory process for approving mining applications and showing “blatant disregard” for those who rely on mining for their livelihood.
“Hume is following the development approval process as established by the New South Wales government and expects that decisions regarding the proposal are based on fact, instead of rumour and hearsay,” said Greig Duncan, Hume Coal’s Project Director.
“It’s very disappointing in a time where there’s a shortage of jobs – and more job losses in the industry to come – that the member for Goulburn and other have decided instead to pander to small, vocal minority groups,” continued Duncan. “We have a strong presence in the local region and it is clear from our interaction with member of the community that there is considerable support for the project.”
The Hume Coal project includes a 3 million tpy underground coal mine, producing metallurgical and industrial coal. Hume is a subsidiary of POSCO Australia, which is wholly-owned by Korean steelmaker, POSCO.
Edited by Jonathan Rowland.
Australian junior coal miner, Malabar Coal, has raised AUS$1.42 million in the first part of an entitlement offer that is aiming to raise AUS$2 million to fund development of the company’s Spur Hill coal project.
The offer comprises a now-completed accelerated institutional component, as well as a retail component. The retail component will open on 7 September and close at end-of-trading on 16 September.
Under the entitlement offer, eligible shareholders are able to subscribe for one new share in the company for every eight already held. The offer is fully underwritten by seven existing shareholders, including four current directors.
The company’s Spur Hill coal project is located in the Upper Hunter Valley of New South Wales. It comprises a proposed underground longwall mining operation, producing metallurgical coal.
Edited by Jonathan Rowland.
Hollysys Automation Technologies Ltd, a leading provider of automation and control technologies and applications in China, has signed a contract to provide its proprietary distributed control system (DCS) for 2 x 1000 MW ultra-supercritical coal-fire power generating units to Fujian Luoyuanwan power plant, in China.
The units are anticipated to start operation in October 2017.
Hollysys’ management commented: “We feel honoured and pleasant of winning the contract, which reflects the customer’s recognition of our leading technology, superior solution and high quality product and service. This is another GW level ultra-supercritical power plant DCS contract win by Hollysys, which strengthened our top place in power industry market share. Going forward, we will continue to penetrate the high-end market of power industry and other industries, strengthen customer service, improve the ability of turnkey solution customisation, promote our long-term DCS business growth and create value for our customers and shareholders.”
Edited from press release by Harleigh Hobbs
A contractor has been killed at Glencore’s Newlands coal operation in Queensland, according to a company spokesperson. The 55 year old was conducting maintenance work at the site’s coal handling and preparation plant.
“Operations at the preparation plant and open cut mine remain suspended while an official investigation by police, emergency services and the Mine Inspectorate continues,” the spokesperson said.
The Queensland Department of Natural Resources and Mines confirmed in a Tweet that its inspectors were onsite and investigating the incident.
DNRM Mines Inspectors are investigating a fatal incident which occurred this morning at the Newlands coal mine, 140km north-west of Mackay.
— Mining Queensland (@MiningQLD) 30 August 2016
“Our primary concern remains the safety, care and welfare of the man’s family and our Newlands workforce,” the Glencore spokesperson continued. “We extend out sincere condolences to the family. All possible support is being provided to the family, as well as counselling for those people working at the mine.”
Edited by Jonathan Rowland.
Mechel’s coal mining business has announced earnings or RUB14.4 billion in 1H16, a 10% increase on the first six months of 2015 – despite lower average prices.
“Despite the positive trends which appeared in 1Q16, the overall price level in this period was significantly lower that the previous year’s,” said CEO of Mechel Mining Management Co., Pavel Shtark. “Nevertheless, optimisation of our costs structure enabled us to increase the division’s EBITDA.”
Mechel recorded contract prices for hard coking coal of US$81 per tonne and US$84 per tonne in the first and second quarters of this year, respectively. In contrast, prices stood at US$117 per tonne in 1Q15 and US$109.5 per tonne in 2Q15.
Revenue was also hit by “the decrease in sales of several types of product as market demand weakened in 1Q16,” Shtark said. As a result, revenue from external customers stood at RUB40.1 billion for the first six months of 2016, a 7% fall on last year.
Overall the company, which also owns steelmaking and power assets, recorded a profit of RUB8.3 billion in 1H16, compared to a loss of RUB16.7 billion the previous year, despite static revenues. It also said that it expected strengthening hard coking coal prices to see the company stay in the back through 2016.
“Currently we see a weaker activity on the metals market, which is offset by a major growth in spot prices for hard coking coal,” said Mechel’s CEO, Oleg Korzhov. “That will enable use to retain the group’s profitability as a whole.”
The company also said that it has completed the sale of a 49% stake in the Elga coal project to Gazprombank, allowing it to repay loans totalling RUB32.9 billion, as well as making overdue interest payments.
The company remains in talks with foreign banks to restructure the company’s debt, which it took on to fund expansion during the commodities boom years.
Edited by Jonathan Rowland.
On 23 August 2016 at the Vinogradovsky opencast mine, the management of Public Joint Stock Company Kuzbasskaya Toplivnaya Company (PJSCKTK) signed a collective labour agreement with the Mining Trade Union for 2016 – 2019.
A trade union conference was held at the Vinogradovsky opencast mine during which the parties summarised the execution of the collective labour agreement effective as from 2013.
The document signed confirms social benefits and guarantees relating to securing safe labour conditions and preservation of occupational health of the company employees, including members of their families as well as all social groups, as provided for by restated version of Federal Industrial Agreement for Coal Mining Industry.
Despite a difficult economic environment, all provisions of the collective labour agreement approved in 2013 and effective until 30 June 2016 were completed. Restated version of the collective labour agreement maintains all benefits and guarantees of the company employees, which were provided in previous versions of the agreement.
More than 20% of current US coal production could be shuttered in the next few years, reflecting the ongoing woes of an industry hampered by environmental regulation, competition from natural gas and other factors, according to a new report from CoBank. Plant closures within the nation’s coal fleet will further curtail coal consumption by another 47 million tons during 2015 alone.
“The past five years have been extraordinarily taxing for the US coal industry,” said Taylor Gunn, lead economist with CoBank’s Knowledge Exchange Division and the author of the report. “Market forces have coalesced to create significant headwinds for the coal producers working to keep their businesses sustainable in the future.”
Over that five year period, dozens of US coal mining companies have had to declare bankruptcy, including many of the nation’s largest companies. In fact, the number of operating coal mines has plummeted from 1013 in early 2009 to fewer than 400 today.
The coal mining industry’s severe problems reflect the seismic structural shifts occurring in the nation’s electrical power generation industry. The US power industry accounts for about 95% of total domestic coal consumption, but it is now in the process of reducing its dependence on coal-fired plants. The combination of new environmental limits on pollutants from power plants and steep declines in natural gas prices reduced the nation’s coal fleet by nearly 40 gigawatts during 2011 – 2015, curbing the power industry’s thermal coal consumption by 21% or nearly 200 million short t over that period.
However, the schedule of coal-fired retirements is in fact a moving target largely dependent on natural gas prices, penetration rates of renewable energy and environmental policies. The actual reduction in the nation’s coal fleet could be upwards of 40 GW of coal-fired capacity retired through 2020, in addition to the 20 GW already announced. These potential retirements could reduce thermal coal demand by as much as an additional 100 million tons through 2020.
Since the beginning of the decline in 2012, roughly 50 US coal mining companies have already filed for bankruptcy. As the industry continues to downsize, those US coal mining companies that have the financial flexibility and operational scale to respond to declining demand should emerge from the current downturn more competitive, both domestically and globally.
“The US coal industry is shrinking, not dying,” explained Gunn. “The US power sector will continue to define the domestic coal industry and the lowest cost and cleanest burning coal will remain in high demand, allowing PRB mining companies to hold an advantage over their counterparts that operate in other regions such as the Illinois and Appalachian basins.”
Edited from press release by Harleigh Hobbs
Replicating spare parts for slurry pumps is a serious issue in the mining industry, for both solution providers and the mine operators who use them.
As commodity prices continue to drop, mining operators are under intense pressure to minimise operational costs. As a result, initial costs are often more important than total ownership costs, making non-OEM spare parts more appealing.
“During these tough economic times, it is understandable that operators need to reduce their maintenance costs, but they must also focus on maintaining their productivity. These cost savings are often at the expense of productivity,” said John Otten, Global Product Manager for pumps at Weir Minerals.
It is widely recognised within the industry that replicator parts host significant limitations and can often cause more harm to slurry pumps than benefit.Non-OEM parts are notorious for their unreliability and often decrease plant productivity, but why do they have this reputation? To answer this question, it is important for end-users to truly understand how replicators operate and their processes.
Most replicators produce their spare parts through the process of ‘reverse engineering’. They will often purchase or obtain a genuine spare part and take measurements to reconstruct a component drawing from which tooling, moulds, patterns and so forth, will be made.
There are three significant deficiencies in this process: the absence of knowledge of optimum tolerances, material properties and methods of manufacture.
“Our engineering experts at Weir Minerals understand our Warman slurry pumps and possess superior technical knowledge on how they operate. We utilise this in-depth knowledge to deliver spare parts that ensure our slurry pumps achieve their maximum performance and deliver the customer optimal productivity,” said Otten.
The next challenging task replicators face is creating the right materials for the slurry pump.
Slurry pump wear parts are made from a range of materials, specially developed for the application. Replicating slurry pump materials, from just a sample of materials, is very difficult. A material’s resistance to slurry wear, corrosion and impact resistance is a fine balance of a combination of factors, including chemical composition and methods of manufacture.
“If replicators use the wrong materials the parts could erode quickly, resulting in greater frequency of repair and loss of production,” stated Otten.
Tolerance is defined as the amount a dimension or feature of a component is allowed to deviate from the nominal. When replicators produce non-OEM parts, the control of the finished product dimensions is very tight to ensure interchangeability of parts.
Slight deviations in the dimensions of the part can have a detrimental effect on the wear life of the pump and its performance, bringing higher maintenance costs and production losses.
“The complexities behind reverse engineering leave little chance of replicators producing an exact replica required for a successful fit-up, satisfactory hydraulic performance and acceptable wear life,” said Otten.
The manufacturing methods and processes used by OEMs have been developed over many years using expert engineering solutions. OEMs know their products inside out; they know what works and continuously make advancements to improve their technology.
“We have access to plant, operational and performance data to continually track and analyse trends. We spend the time to understand our customers’ needs, gain feedback and make developments based upon that feedback to make them more productive,” Otten continued.
Production facilities that manufacture genuine spare parts using state-of-the-art materials are highly sophisticated and usually employ very expensive machinery. It is unlikely that replicators would have the equipment or the knowledge to satisfactorily machine these specialist materials.
Taking into account the necessity to match; optimum tolerance, the correct material properties, method of manufacture and the high cost of good quality tooling, the likelihood of achieving anything like the overall performance of the OEM part is minute.
A replicator may recreate the spare part but they often fail to optimise it. It is not always as simple as just replacing the worn part; first the operator must understand the nature of the problem.
“At Weir Minerals, we often take samples of the worn parts and send this to our experts in the materials laboratory to analyse. Proper examination of the worn parts’ physical characteristics, by the people who know the design and manufacturing process of the slurry pump, can reveal the root cause of the wearing, and allows us to engineer the correct solutions specific to the application,” explained Otten.
There are many implications with replicating genuine spare parts, presenting an array of consequences to mine sites across the globe.
Operators considering a non-OEM spare part for their slurry pump should think through the risk to maintenance costs, down-time, the effect on slurry system performance and energy costs, before making their final decision.
Edited from press release by Harleigh Hobbs
Atrum Coal has entered into a joint exploration agreement with Japan Oil, Gas and Metals National Corp. (JOGMEC) covering development of the Panorama North anthracite project in British Columbia, Canada.
Under the agreement, JOGMEC can acquire up to a 35% interest in the project through the investment of CAN$5 million in cash or in kind for exploration expenditure across the projects over a three-year period.
“We are very pleased to partner with such as respected corporation as JOGMEC to accelerate exploration at our Panorama North project,” said Atrum’s Executive Chairman, Robert Bell.
According to historical exploration, Panorama North is “highly prospective for anthracite”, continued Bell. The focus of exploration will now build on that historical exploration and begin quantifying the resource potential of the project.
During the 1980s, the area was explored by Gulf Corp. (Canada), which concentrated on surface mapping, trenching and shallow drilling. Gulf concluded that there were significant exploration targets for shallow anthracite deposits.
“If successful, the three years of exploration will lead to a feasibility study and set Panorama North as yet another development zone within the Groundhog Coalfield,” Bell concluded.
Atrum’s activities in the Groundhog Coalfield include its flagship Groundhog project, as well as the Panorama North, West and South areas. As part of the agreement with JOGMEC, the Japanese company also receives an exclusive negotiation right to enter a further joint venture with Atrum at the Panorama West project.
Edited by Jonathan Rowland.
Peabody Energy’s Wambo underground mines’ rescue team (MRT) earned first place in the First Aid competition at the 10th International Mines Rescue Competition held in Sudbury, Canada this past week.
The event was hosted by Workplace Safety North and Ontario Mine Rescue.
The Wambo underground MRT was among 27 teams from 13 nations that gathered to compete in four days of events to test emergency preparedness skills and train through competition.
“We take great pride in the global safety leadership demonstrated by our Wambo underground mines rescue team, which is an extraordinary tribute to Peabody’s first value of safety,” said Peabody President – Australia Charles Meintjes. “Using this competition as a platform to advance best practices in safety around the world benefits our people, our organisation and our industry. We are honoured to represent Peabody and Australia in this prestigious global event.”
The competition presented simulated emergency response situations for applying first aid involving multiple individuals and injuries. Other events included firefighting, high angle rope rescue and an underground mine rescue simulation.
The Wambo team qualified for the international competition after taking first place in the highly contested 53rd Australian Underground Mines Rescue competition in 2015. The team has holds nine consecutive years of success at both the district and national levels.
Edited from press release by Harleigh Hobbs
A Canadian environmental solutions firm operating a slag recycling plant in California is using industrial atomised mist technology to contain fugitive dust emissions and control runoff to satisfy strict state air quality regulations. Tervita Corp. was tasked with controlling dust while conserving water in an area known for high winds, Rancho Cucamonga. The firm integrated a tower mounted DustBoss® DB-60™ with a modified shipping container. The result was a drastic reduction in fugitive dust emissions, improved regulatory compliance and better community relations.
In 2012, the Gerdau Corp. chose Tervita to take over operations of the slag processing plant, servicing the company’s long steel mill located approximately 0.25 miles away.
“When we installed the new state-of-the-art crusher, we streamlined the recycling process into a faster operation that is dust-free because of the bag house filtration system,” said Carson Swartz, Operations Supervisor for Tervita. “But the storage and cooling area was a big issue. Whether offloading, churning or moving the slag to the crusher, it’s constantly being disrupted, causing a lot of dust.”
Prior to installing the DB-60, the company tried using the moveable sprinkler irrigation system left in place by the previous operators. Tervita found that the sprinkler system only saturated the surface material, which caused large amounts of runoff and did not properly address the fugitive dust.
The company placed a shipping container in the storage and cooling area. Working with DCT technicians, the container was reinforced with a heavy-duty steel frame and modified to mount a tall steel tower topped by the DB-60 equipped with a 359º oscillation system, making the total height from the ground approximately 28 ft. Inside the container, a touch screen panel is mounted on the wall that allows operators to control the elevation, oscillation arc, booster pump pressure, fan output and water volume. Many of these functions can also be modified outside the container by remote control.
Since the water used by Tervita for dust suppression is non-potable, it is first sent through an in-line 30 mesh, 595-micron filter before being delivered to the booster pump, where the water pressure is raised from 10 PSI up to 160 PSI. Pumped through a hose to a circular brass manifold, the water is forced through 30 atomising spray nozzles, which fractures it into millions of tiny droplets. The mist is then propelled by a powerful 25 HP electric fan that produces 30 000 CFM of airflow through a specialised cylindrical barrel design. Atomised droplets are launched in a cone at an adjustable 0 to 50° angle.
Due to the use of atomised mist, the facility has dramatically reduced the volume of water needed for dust management, making more water available for other parts of production in the plant, thus promoting sustainable overall usage for the entire facility. With fugitive dust levels compliant to SCAQMD regulations, Tervita achieved the goals set for the project and successfully applied a new technology that could be used in other locations and applications.
“As much as we run the machine, we’ve been impressed by how well it’s held up,” Swartz added. “Since the installation, the couple of times we’ve called DCT, they were very responsive and even came out to visit just to see the setup. Their service matches the quality of the equipment.”
Tlou Energy Ltd, the AIM and ASX listed company focused on delivering power in Botswana and Southern Africa through the development of coalbed methane (CBM) projects, has completed a AUS$3 million oversubscribed placement of new ordinary shares.
The placement comprises the issue of 31 578 947 new shares (representing 15.4% of existing shares on issue) at an issue price of AUS$0.095 or £0.055 per share to sophisticated and professional investors in Australia and the UK (placement). The placement shares will rank equally with Tlou’s existing shares on issue.
The net proceeds of the placement, along with existing cash, will be applied by Tlou to the on-going production testing at Selemo, achieving an initial independent reserves certification, completing environmental and mining licence approvals and working capital for its Lesedi CBM project, the most advanced CBM project in Botswana.
The placement price represents a discount range of 9 – 19% to the 20 day volume weighted average price for Tlou’s shares traded on the ASX and AIM markets and was a result of discussions over several months with IK Botswana Investments Pty Ltd (IKBI), an Australian private company associated with IK Holdings Ltd, which is a party (along with General Electric International Inc.) to Tlou’s recently announced co-operation agreement. As part of the placement, IKBI has agreed to subscribe for 7 115 000 new shares, which represents 3% of the fully diluted shares following completion of the placement.
The placement shares will be issued within Tlou’s existing placement capacity and as such, shareholder approval will not be required. Settlement of the Placement shares is expected to occur on 6 September 2016, with allotment on 7 September 2016. Application will be made for the admission of the placement shares to trading on ASX and AIM (Admission).
Tlou’s Acting Managing Director, Gabaake Gabaake commented: “This placement along with the recently announced co-operation agreement with General Electric International Inc. and IK Holdings Ltd provides significant momentum for Tlou to progress the production testing at Selemo, with the objective of achieving initial reserves certification at Lesedi and the first gas to power project in Botswana. We were very pleased with the investment by IKBI and the continued support from our institutional and sophisticated shareholders in Australia and the UK.”
Pacific American Coal has appointed mining consultancy, Hatch, to complete a concept level mine infrastructure and coal processing CAPEX study for the Elko metallurgical coal project.
The study will build on the 3D mine site modelling work completed by Hatch earlier this year and will include cost estimates for key components, including the coal handling and preparation systems, the workshops, mine and site infrastructure, tailings storage, opencast mining equipment and construction costs.
The company continues to review a first-stage opencast operation at the site using a contractor and expects to present the findings of this review in the coming months. The outcome of the CAPEX study will assist with this and is expected within the next two months.
Metallurgical coal prices have increased substantially over the year, rising to US$130 per tonne. The Elko project has a JORC resource of 257.5 million t in the East Kootenay Coal Basin of British Columbia, Canada.
Edited by Jonathan Rowland.
Australian coal mining junior, Malabar Coal, is aiming to raise AUS$2 million to fund its Spur Hill underground metallurgical coal project, according to a recent company announcement.
The fund raising will occur through a one-for-eight entitlement offer to existing shareholders. Seven existing shareholders, including four current company directors, will underwrite the offer and take up their entitlements.
Including the underwriters, Malabar shareholders holding 71.98% of the shares in the company have agreed to take up their respective entitlements. The company expects around 20 million new shares will be issues as part of the offer.
The company has also announced its intention to delist from the Australian Stock Exchange (ASX).
The decision comes on the back of the company’s limited liquidity, a lack of interest from brokers – a situation the company blames on the current conditions in the coal industry – and the cost of maintaining the listing. The delisting is subject to shareholder approval.
Edited by Jonathan Rowland.
Ncondezi Energy Ltd has announced that Africa Finance Corp. (AFC) has joined the existing US$1.32 million loan facility (existing shareholder loan) announced in May 2016 and has committed an additional US$3 million to the shareholder loan facility in two tranches (new shareholder loan). The additional funding will be used to fund ongoing project development costs, including those that will not be covered by the joint development agreement (JDA) with Shanghai Electric Power Co., Ltd (SEP).
Highlights of this include:
Michael Haworth, Chairman of Ncondezi, commented: “We are pleased to announce that AFC has joined the Existing Shareholder Loan facility that was put in place in May 2016. As Ncondezi’s largest shareholder and one of Africa’s leading infrastructure development companies, AFC’s participation is further endorsement of the Ncondezi project’s progress. The AFC facility provides conditional financing for Ncondezi while the SEP JDA is completed and we work to reach Financial Close. The Company continues to make good progress in meeting the SEP Investment Conditions and the UAE holding company structure is now in place.”
Oliver Andrews, Chief Investment Officer of AFC, said: “AFC is committed to developing infrastructure that will foster economic growth and has high development impact. Lack of access to power is one of the greatest constraints to growth in Africa. Currently 620 million people, half of Africa’s population, do not have access to electricity. When completed and on-stream the Ncondezi power plant will provide up to 30 0MW of new generation capacity. With this new loan, the AFC is pleased to be able to support Ncondezi to reach financial close.”
Matrix Design Group LLC and Brentwood Electronics T/A Monitech (Monitech) have joined in a partnership agreement for distribution and integration of the Matrix product line, including proximity detection systems, to mines and other industrial operations in Africa.
The partnership’s initial venture has delivered full section, leading-edge proximity detection solutions to Sasol Mining for some of its underground operations.
“Matrix is proud to team up with Monitech to deliver innovative technologies to the African market,” said Matrix President David Clardy. “Monitech’s premier technical service teams are highly respected in the African mining industry and we are excited to be working with them.”
“Superior service, safety, integrity and technology are the core of our business at Monitech,” added Monitech President, Jarrod Hassett. “Matrix brings new technology solutions to the African mining industry, and together with commitment and local service from Monitech, African mining operators will find the Matrix systems to be the best performing, most reliable and lowest cost to own.”
Dominion is finishing a major clean-up project in Southwest Virginia that will help improve water quality in the Clinch River. Dominion will use 0.5 million t of “gob” coal to make electricity in a state-of-the-art power station.
“This is major environmental success story,” said Paul Koonce, Chief Executive Officer for the Dominion Generation business group. “A unique power station is taking a waste product from a century-old coal mine and using it to responsibly make energy for Virginia today. This gob coal piled along the banks of a Clinch River tributary has been polluting the river for decades and desperately needed to be cleaned up. Along with the environmental benefits, our Virginia City Hybrid Energy Center, is helping to keep our electric rates stable and boosting the economy of Southwest Virginia with jobs and taxes.”
The Virginia Department of Mines, Minerals and Energy (DMME) has long considered the 12-acre Hurricane Creek gob pile site its highest priority for reclamation in the Dumps Creek watershed. In 2014, the federal Office of Surface Mining approved DMME’s environmental document for the project and authorised proceeding with the reclamation as part of a larger effort to improve the health of the Clinch River Watershed.
“This abandoned mine land was the largest pollution contributor to the Clinch River,” said DMME Director John Warren. “The environment is one of our top priorities. Our Abandoned Mine Land programme group worked diligently to come up with funding to help rid Southwest Virginia of this hazard. We are also proud to be a part of something that will also completely restore the health of the tributary stream, Dumps Creek.”
The Hurricane Creek gob pile is located about a half mile from the Clinch River.
Approximately 1 million t of waste coal and rock were removed and properly disposed of as part of this clean up-project, with about 500 000 t of gob coal transported to the Virginia City Hybrid Energy Center (VCHEC) at St. Paul, where it was used to produce electricity.
It is estimated that every year more than 200 t of waste coal from the pile made it into Clinch River for decades. Because of the vast quantity of gob coal at the site and its extremely low Btu content, there was no economically feasible solution to remove the gob until the construction VCHEC with its unique waste-coal burning capabilities.
The Nature Conservancy of Virginia protects more than 35 000 acres in the Clinch Valley and has been working for years to restore the health of the Clinch River and the wildlife it supports.
“The reclamation of the Hurricane Creek gob pile is an important step toward improving water quality in the nationally important Clinch River watershed,” said Brad Kreps, director of the Clinch Valley Program for the Nature Conservancy. “Finding creative solutions to address pollution from abandoned mined lands is a crucial part of a larger effort underway to ensure that the Clinch River can provide clean water for the people, wildlife, and the local economies that depend on it.”
11 other gob piles in this part of Virginia have already been reclaimed by Gobco, Dominion and DMME.
Edited from press release by Angharad Lock
Foresight Energy LP ([FELP] and along with its consolidated subsidiaries, the [Partnership]) has completed an out-of-court restructuring of over US$1.4 billion in indebtedness pursuant to the terms of Transaction Support Agreements previously executed by the Partnership, Foresight Energy GP LLC (FEGP), the Partnership’s equity sponsors, including Christopher Cline, Murray Energy Corp., Foresight Reserves LP (Reserves), and a majority of the Partnership’s secured bank lenders and holders of the 7.875% Senior Notes due 2021 issued by the Foresight Energy LLC and Foresight Energy Finance Corporation (the Old Notes).
According to the company’s media release, the restructuring resolves various defaults and events of default relating to a December 2015 Delaware Chancery Court determination that the Partnership’s and FEGP’s April 2015 equity transaction involving Murray Energy and Reserves constituted a ‘change of control’ of FELP under the terms of the Old Notes (the Change of Control Litigation). The restructuring was implemented principally through concurrent exchange and tender offers in which holders of 99.98% of the principal amount of the Old Notes participated. Through the tender and exchange offers, Reserves and certain of its affiliates purchased approximately US$105 million of outstanding Old Notes for cash, and the Partnership exchanged the remaining Old Notes for approximately US$349 million of new second lien notes, approximately US$299 million of new convertible PIK notes, and warrants to acquire up to 4.5% of the total outstanding units of FELP upon the redemption of the convertible PIK notes.
The restructuring also provides for: (1) an amendment and restatement of the Partnership’s senior credit facility; (2) an amendment and restatement of the Partnership’s receivables securitisation facility; (3) amendments and waivers related to the Partnership’s longwall equipment leases and financings; (4) amendments and other modifications to FEGP’s and the Partnership’s governance documents and existing agreements by and among the equity sponsors; and (5) the execution of various mutual releases among the participants in the restructuring. As a result of the restructuring, the Change of Control Litigation will be dismissed with prejudice.
“We are pleased to have completed the debt restructuring,” said Robert D. Moore, President and CEO. “The resulting transaction puts the change of control litigation behind us and allows us to continue to focus on executing our mission of running the safest, most reliable and lowest cost mines in the Illinois Basin.”
Starting 29 August 2016, the US Mine Safety and Health Administration (MSHA) is issuing a call to safety to coal miners working in underground and opencast mines across the US.
According to MSHA data, since October 2015, eight fatalities and more than 1100 nonfatal accidents have occurred in the nation’s coal mines, resulting in restricted duty, missed days at work and permanent disabilities for the miners who worked there. While injury rates have been fairly consistent during this time period, records indicate a trend in accidents resulting in more serious injuries. The circumstances in at least 30 of the accidents might have led to fatalities.
In MSHA’s safety issue call, inspectors will engage coal miners and mine operators in ‘walk and talks’ through to 30 September, reminding them to ‘stop and take a breath’ before proceeding with the next task at hand.
The most common outcomes of the more than 1100 mining accidents – 250 of which occurred at opencast operations – were injuries to the back, shoulders, knees and fingers. In the near-fatal accidents, the majority were attributed to powered haulage, electrical and machinery classifications.
The majority of non-fatal accidents occurred in West Virginia, with 419; Kentucky, with 191; and Pennsylvania, with 130.
“These walk and talks are intended to increase miners’ awareness of recent accidents, encourage the application of safety training and raise hazard recognition,” said Joseph A. Main, assistant secretary of Labor for Mine Safety and Health.
Edited from press release by Harleigh Hobbs
The US Department of Energy (DOE) has announced approximately US$6.7 million in federal funding for cost-shared projects that will develop technologies that use carbon dioxide from coal-fired power plants to produce products. DOE’s Office of Fossil Energy is seeking these projects as part of the Department’s Carbon Storage programme.
Carbon capture and storage is a key component of national efforts to reduce greenhouse gas emissions and mitigate climate change.
The new funding opportunity announcement (FOA) focuses on securing applications for projects that will develop CO2 using technologies that produce useful products at lower cost than currently available technologies, without generating additional greenhouse gas emissions. Awards made from the FOA will validate the concept, estimate the technology cost, and demonstrate that the carbon lifecycle of the products can offer a true carbon reduction.
The funding opportunity announcement, entitled Applications for Technologies Directed at Utilising Carbon Dioxide from Coal Fired Power Plants, has three areas of interest:
Biological based concepts for beneficial use of CO2: This topic area is focused exclusively on the biological utilisation of CO2 contained in flue gas exiting a desulfurisation unit (prior to entering a downstream CO2-capture and -purification unit). Projects will address key technical barriers to improve the technical and economic feasibility of biological CO2 utilisation and address the challenges associated with integrating biological CO2 utilisation processes with coal-fired power plants.
Mineralisation concepts using CO2 with industrial wastes: The objective of this topic area is to support technology development for innovative concepts that utilize CO2 to react with industrial wastes, such as tailings from mining operations, and stabilise the CO2 in mineral form, resulting in salable products and/or recovery of valuable minerals or chemicals from these waste materials.
Novel physical and chemical processes for beneficial use of carbon: Projects in this topic area will demonstrate innovative concepts for beneficial use of CO2 via novel physical and/or chemical conversion processes, including high-energy systems and nano-engineered catalysts that can transform CO2 into valuable products and chemicals while significantly reducing energy demand for the conversion process.
Edited from press release by Angharad Lock
Coal consumption by educational institutions in the US fell from 2 million short t in 2008 to 700 000 short t in 2015, according to the US Energy Information Administration (EIA). Consumption declined in each of the 57 institutions that used coal in 2008, with 20 of these institutions no longer using coal at all.
Coal use at educational institutions makes up less than 0.1% of total coal consumption in 2015.
Educational institutions in New York, South Carolina, Idaho, and South Dakota ceased to use coal between 2008 and 2015. These institutions either built or expanded their natural gas capacity, aided by state funding, or increased their electricity purchases from public utilities.
The largest reductions in coal consumption by educational institutions between 2008 and 2015 occurred in Indiana, Michigan, Missouri, and Tennessee. Educational institutions in Indiana collectively reduced coal consumption by 260 000 t (81%) from 2008 to 2015. Coal was replaced mostly by natural gas and geothermal heat to meet sustainability initiatives set by each university.
Educational institutions in Michigan reduced their coal use by more than 80% over this period, adopting natural gas as the major fuel. Some institutions in Missouri added more renewable sources of power, replacing coal with biomass. Three institutions in Tennessee stopped using coal between 2008 and 2015, resulting in a 94% drop in coal consumption by institutions in the state. Many of their cogeneration plants were converted to burn only natural gas.
Edited from press release by Angharad Lock
Terex Minerals Processing Systems (MPS), will launch its ‘Making New Tracks’ large mobile plant strategy in North America at the forthcoming MINExpo International Show in Las Vegas, on 26 – 28 September 2016 at Booth 3379.
Terex MPS Market Area Director for Americas, David Quail, commented: “We are excited to be able to launch this new product strategy at MinExpo. We have three new large tracked mobile plants which enable Terex MPS to diversify further from our modular, portable and static offerings. With over 100 years in the industry, we now have a strong product portfolio offering customers from a wide range of industries, cost effective solutions for the long term”.
The LJ5532 has the Terex JW55 single toggle heavy duty jaw crusher mounted on a tracked chassis. This hydraulically adjusted jaw crusher, requiring no shim packing, allows the CSS of the jaw to be adjusted in a matter of seconds.
This highly mobile jaw crusher boasts an advanced, user friendly, control system and an efficient hydrostatic drive, which allows the end user to vary the jaw speed on the fly and even run the jaw crusher in reverse as per particular application demands, such as recycled asphalt. The powerful hydraulic drive can also be used to unblock the jaw if the plant has been shut down fully loaded.
The LJ3255 features an independent prescreen, located before the crusher, which helps bypass or remove any undersized material or feed material that has a high content of dirty fines, thereby promoting maximum throughput performance from the jaw crusher as well as enhancing the heavy duty manganese wear life. This tracked plant is run by the proven Scania DC13 Tier 4 water cooled diesel engine, and is transported in one load.
The LC450 incorporates the Cedarapids MVP450X all roller bearing cone crusher. The MVP450X cone crusher is well known in the industry as being unmatched when it comes to producing high spec products. The cone crusher also includes a hydraulic, maintenance free, anti-spin device that helps improve cone liner wear life, as well as a hydraulic tramp overload protection system, TIR, that helps clear the crushing chamber of any potential tramp metal that may have entered the crusher with the feed material.
The LC450 tracked cone crusher also incorporates an automated metal detection system, located on the heavy duty feed conveyor, which stops the conveyor before the metal contaminant reaches the crusher. The plant also has the patented metal purge system that dramatically reduces downtime when removing the metal contaminate from the feed conveyor.
The MVP450X Cone crusher is driven via V-belts by the powerful Caterpillar C18 Twin Turbo engine. The crusher eccentric speed can be adjusted, via the engine rpm, to best suit the given application and feed material.
The plant also features a cone hopper level sensor, which can be controlled via the plant control system, which is used to regulate the speed of the feed conveyor to ensure that the feed hopper above the cone crusher is kept consistently full. The process is made far more convenient with the onboard video camera, mounted above the cone crusher, giving live images of the material entering the chamber.
The LV2050 is a high-capacity tracked Rock on Rock, ROR, Canica 2050 VSI crusher, which features the new patent pending hydraulically controlled dual flow system. The Dual Flow system helps elevate the crusher’s throughput capacity without increasing the overall drive power.
This large tracked vertical shaft impact crusher uses the same chassis and powerunit as the equally impressive LV450, incorporating many of the same impressive features.
The New Canica 2050DF VSI ‘broke the mold’ when it comes to throughput capacity, superior product quality and all round product control. The heart of the VSI is the 6 port heavy duty closed rotor. The rpm of the rotor is controlled by changing the engine speed. The crushing chamber’s rock shelf is easily accessed through the side door, which also helps speed up maintenance checks on the rotor.
This tracked VSI is ideal for applications that demand the best product shape and quality, with a throughput capacity that can only be admired.
David Quail added: “The new product lines being launched in North America will serve an increasingly diverse range of materials handling sectors. The AggreScalp™ unit brings operators a well proven, cost effective and durable machine in a modular all-electric format. This is ideal for C&D recycling applications as well as quarry and mine overburdens and integrates seamlessly with other key TWS systems including AggreSand™ and AggreScrub™. The UltraFines™ will tackle the increasing demand for fines recovery within numerous facets of the washing industry.”
Edited from press release by Harleigh Hobbs
Southwest Research Institute (SwRI) is leading a team to help formulate a plan for an oxy-combustion pilot plant under a US$3.3 million project from the US. Department of Energy National Energy Technology Laboratory (NETL).
“Oxyfuel combustion has the potential to provide carbon emissions-free, high efficiency electricity in next-generation advanced power plants,” said Danny Deffenbaugh, vice president of SwRI’s Mechanical Engineering Division. “SwRI continues to develop key technology components to make this clean and inexpensive power possible.”
“As our nation continues to develop new energy alternatives, it’s prudent we also ensure our current energy sources are as efficient, cost-effective, and environmentally responsible as possible,” said Congressman Joaquin Castro (TX-20). “While coal is a finite resource, it continues to play a role in powering the United States. SwRI’s project will help take our nation’s use of coal into the 21st century, and I’m proud it has received this substantial DOE grant to further this innovative work.”
The aim of the project is to provide a detailed design, specifications, cost, and construction schedule for a 10 megawatt scale combustion pilot plant. The pilot plant, which will be built under a separate DOE project, will validate the performance of flameless pressurised oxy-combustion technology developed on a previous DOE project for a broad range of coals and provide an understanding of what is needed to build a commercial-scale unit.
Flameless pressurized oxy-combustion technology reduces the cost of coal-fired electrical plants by 20%, compared to a standard coal-based power plant. The pilot plant will prove that the high-firing temperature and pressure of a flameless combustor will allow the use of a wide range of high-to-low rank coals and lignite, while still meeting emission requirements.
SwRI and team members ITEA S.p.A., Jacobs Energy, EPRI, General Electric Global Research, and Peter Reineck Associates will collaborate on various aspects of the 2 year project, which is expected to be underway in October 2016.
Edited from press release by Angharad Lock
Huaneng Clean Energy Research Institute (CERI) is to join the Carbon Capture International Test Center Network (ITCN), a global coalition of facilities working to accelerate the R&D of carbon capture technologies. The National Carbon Capture Center (NCCC), a US Department of Energy (DOE) research facility managed and operated by Southern Company, currently leads and serves as host site for the ITCN.
Located in Beijing, CERI is a subsidiary of China Huaneng Group, the largest power generation company in the world, based on total installed capacity. CERI engages in a wide-range of clean energy R&D, including carbon capture, utilisation and storage, coal gasification, renewable energy and emissions reduction technologies.
“The addition of CERI to the ITCN broadens the abilities of Southern Company and its research partners to develop next-generation carbon capture technologies, which are critical for a cleaner energy future,” said Southern Company Executive Vice President and Chief Operating Officer Kimberly S. Greene. “We look forward to working with DOE and ITCN members to continue the development of real solutions that will advance 21st century coal technologies on the international stage.”
Formed in 2012, the ITCN facilitates knowledge-sharing among carbon capture test facilities around the world. The NCCC currently chairs and operates the ITCN with DOE’s Office of Fossil Energy, a role previously held by Technology Centre Mongstad of Norway.
Located in Wilsonville, Alabama, the NCCC works with scientists and technology developers from government, industry and universities to evaluate, demonstrate and advance emerging carbon capture technologies to reduce greenhouse gas emissions from coal- and natural gas-based power generation.
With the addition of CERI, membership of the ITCN now includes:
Anglo American has completed the sale of its 70% interest in the Foxleigh metallurgical coal mine in Queensland, Australia, to a consortium led by Taurus Fund Management, following the announcement of the sale and purchase agreement on 4 April this year.
Foxleigh is an opencast coal operation, which produces high-quality pulverised coal injection (PCI) coal, located in Queensland’s Bowen Basin, 12 km southwest of Middlemount.
Anglo American’s attributable share of Foxleigh’s saleable production was 1.86 million t in 2015.
The terms of the transaction remain confidential.
Edited from press release by Harleigh Hobbs
The seaports in the North Sea Canal Area, which includes the ports of Amsterdam, IJmuiden, Beverwijk and Zaanstad, show a transhipment of 48.4 million t 1H16, which is a decrease of 5.4% compared to the same period of 2015.
Port of Amsterdam is the largest port in the region and saw its transhipment decrease by 7% to 39.5 million t, from 42.4 million t in the same period in 2015). The decrease is reported to be primarily a result of lower transhipment of coal.
Transhipment grew in IJmuiden to 8.5 million t (+1.3%), decreased in Zaanstad to 123 000 t (-38%) and increased in Beverwijk to 333 000 million t (+148%).
The decrease in transhipment in Amsterdam is primarily attributable to the decrease in the transhipment of coal by 27% to 7.1 million t. Agribulk, including fertilizers, decreased by 1.2% to 4.1 million t. Other dry bulk rose with 5.2% to 3.2 million t. The transhipment of oil products decreased slightly by 1.6% to 22.1 million t. Other liquid bulk cargo rose by 11.7% to 1.8 million t.
The transhipment of containers rose by 11.4% to 328 000 t, while the transhipment of other mixed cargo, including ro-ro, decreased from 1.1 million to 879 000 t.
Koen Overtoom, Interim CEO of Port of Amsterdam said: “There was a substantial decrease in coal transhipment in the first half of 2016. This is attributable to the declining demand for coal as the basis for generation of energy. We furthermore see energy companies keeping smaller stocks at the terminals. We expect total transhipment to stabilise in the second half of the year and consequently anticipate that it will probably end up at the same level as last year.”
Edited from press release by Harleigh Hobbs
South32 reported in its financial release for the financial year ended 30 June 2016 (FY16), South Africa thermal coal saleable production decreased by 2.6 million t (8%) to 31.7 million t in FY16. Lower production resulted from the planned closure of the opencast mine at Khutala and a reduction in contractor activity at the Wolvekrans Middelburg complex, consistent with our focus on value over volume.
Total coal production guidance for FY17 is maintained at approximately 30.9 million t, with a higher proportion of domestic sales. In FY18, a small decrease in production is expected to 29.8 million t.
The Klipspruit Life Extension project proceeded into the feasibility study stage in FY16, where the viability of a lower capital cost development option is being assessed. In addition, the company continue to work with Eskom under the existing (cost plus) coal sales agreement to progress a lower capital cost option to extend the life of the Khutala underground mine.
Operating unit costs decreased by 13% to US$26/t in FY16 due to a stronger US dollar and a significant improvement in labour productivity. In this context, the insourcing of activity underpinned a 38% reduction in contractor numbers when compared with the average headcount in FY15, while employee numbers were also reduced by 14%.
Operating unit costs, including sustaining capital expenditure, are expected to decline only marginally to US$26/t in FY17 (FY16: US$27/t) despite the assumed weakening of the South African Rand given the relatively high proportion of fixed costs and lower production. In this context, sustaining capital expenditure of US$72 million is planned.
Underlying EBIT remained largely unchanged in FY16 at US$95 million. A reduction in contractor and labour costs increased Underlying EBIT by US$66 million while a stronger US dollar delivered a further US$112 million net benefit. Non-cash charges declined by US$95 million as depreciation and amortisation was rebased following the recognition of impairments in FY15 and the December 2015 half year. In contrast, lower realised prices reduced Underlying EBIT by US$117M, net of price-linked costs.
Capital expenditure decreased by 36% to US$63 million in FY16 following the purchase of mobile equipment in the prior period.
Pre-tax restructuring costs, including redundancies, of approximately US$15M were incurred in FY16 and have been excluded from the Group’s Underlying earnings measures.
Edited from press release by Harleigh Hobbs
Manitou Group, a French global leader in all-terrain materials handling trucks, inaugurates its new Brazilian subsidiary in Vinhedo, Sao Paulo state.
The company has sold Manitou products in Brazil since 2008, working with dealers and a regional office in the country, directly managing it from France. In 2014, the company initiated a deep analysis of the Brazilian market, and started the commercialisation of the Gehl and Mustang brands in the country. Since then, it has identified the opportunity to invest in Brazil and began its expansion project in the market with the construction of the factory in Vinhedo, which has now been inaugurated.
The strategy of building a factory in the country is a process that lasted more than six years, comprising of research, studies and many visits, which ultimately led to the opening of the first unit in Latin America, with 7000 m>sup>2. Since the beginning of planning, the project has generated more than 300 direct and indirect jobs.
“We want to have a sustainable presence in Brazil. This current market encounter difficulties, but we are really confident for the future. It will take time, but our group will be present when we will have favourable economic situation”, said Michel Denis, President & CEO of the company.
Manitou group bets on Brazil as its first production line outside of Europe and the US, which already has eight plants responsible for the manufacture of its products. The choice of Vinhedo as the site for the factory took into account the ease of access to the airports of Viracopos, in Campinas, and Guarulhos and the Port of Santos, the main entrances of imports and exports in the country.
“Brazil is a very important country for Manitou group, as we see great growth potential here, as with getting FINAME – Machinery and Equipment Financing – it will facilitate the purchase of our machines for the domestic market. Additionally, the country has four major markets for Manitou: mining, construction, industry and agriculture, the latter has the greatest expectation for Brazil”, said Marcelo Bracco, general manager of Manitou Group in Brazil.
Edited from press release by Harleigh Hobbs
