Mining Global Markets
Much news has been generated on the performance of Australia’s commodities in the global market, but much less is mentioned about the businesses that make it all happen: the mining technology, equipment and services (MTS) sector that help those mining companies get product out of the ground and onto ships and around the world in the most efficient way possible. Mining may be underground but mining technology, equipment and services are all around. Find out how your business can benefit from Australia’s reputation as a world leader in mining innovation.
The MTS sector covers everything from software to processing equipment, surveying tools to safety training—anything to do with mining that isn’t about selling what’s dug out of the ground. Another attribute to note is that while mining companies tend to be multinational giants, the MTS sector is populated by small and medium businesses supplying to the industry.
Although a young country, Australia has a long mining heritage. For new exporters, it means that Australia is a world leader in the MTS sector and that’s a reputation that will stand businesses in good stead around the world.
“The MTS sector offers Australia the greatest opportunity for world leadership,” says Elizabeth Lewis-Gray, CEO of mining equipment company Gekko Systems. “The beauty of it is that it’s a value-added segment that is based on a domestic economy that is significant in world terms. It’s one of the very few areas where Australia really has a competitive advantage.”
With commodities making up a great deal of our trade balance sheet, it’s no surprise that the government takes the industry seriously, with funding for research and development readily available in the space. “Not only that, we have one of the largest research bases in the world for the mining sector through the CSIRO, universities, the CRC [Cooperative Research Centre],” says Lewis-Gray.
One of the easiest ways to start exporting in this sector is to have a multinational customer take you overseas. This happens with both Australian mining companies with global operations as well as international companies operating here, as Robert Trzebski, executive officer of MTS export organisation Austmine, explains.
“It happens quite often. One example would be one of the biggest mining operations in the world, Vale, the Brazilian giant. One of our members, Banlaw, manufactures quick refuelling nozzles for big trucks. They have an arrangement with Vale for Vale’s operations in and out of Brazil. Wherever they go, Banlaw goes with them,” he says.
It is also possible to find business through complementary service sectors, he adds: “There’s also piggybacking with engineering companies. Quite often you work in consortiums so you can deliver a package to someone.”
MTS businesses already exporting should keep an eye on trends. Due to the current economic crisis, the need for cheaper, more efficient ways of operating a mine has become more visible, hence Trzebski sees ‘smart mining’ becoming the way of the future for the industry.
“Smart mining gives the opportunity for innovation. It’s all about being efficient, profitable, safe and having good infrastructure,” he says. “It’s a good opportunity for the global MTS sector to provide solutions to how we can save labour and be more efficient, in terms of fuel and the environment, and how we can progress automation.”
The best thing about MTS is that even if projects have stalled due to lack of funding, mining companies will still look to the MTS sector to provide cost-saving efficiencies.
Trzebski also says that if you’ve appointed an agent or distributor in a market and it’s doing well, consider setting up operations in that country. You may even be able to leverage a relationship with a company already there by adopting a corner of their office to prospect before branching out on your own. “If there’s no competition, if they are symbiotic, they share resources,” notes Trzebski.
Mining companies are well known as pioneers for other industries so it follows that the MTS sector in particular should acknowledge emerging markets and prepare to follow mining companies into new areas. There are a number of countries earmarked for future development—many of them low competition, but high risk.
“You have to look at other opportunities in places that you would not normally think about, places that are less prominent: Kazakhstan, Uzbekistan, Mongolia,” says Trzebski. “Those countries are less competitive but provide more value because you have space to grow. They’re not easy markets.”
He also says Africa presents opportunities as well as challenges: “Africa is a tremendously risky region to go to but there are extremely good prospects there. Mozambique, Tanzania, Ghana: these are places where there are tremendous opportunities.”
And the next hotspot in Asia will be Laos and the central part of the continent, he believes: “As far as Australia is concerned, that has been an area very little explored.”