TOROTNO (miningweekly.com) – A recent white paper from Timetric’s Mining Intelligence Centre (MIC) looked at the key trends in the North American mining equipment market, and found that three core areas including product quality/reliability, availability of parts and ability to support cost reduction/minimisation required improvement by their current suppliers.

The survey canvassed more than 100 mining equipment buyers and decision-makers about the range of issues they faced when buying equipment. More than 40% of the respondents nominated the top three issues.

Research undertaker Timetric noted that while the leading manufacturers, such as Caterpillar and Joy Global, all received high satisfaction ratings for product quality, these results showed that North American miners felt there was still room for improvement, particularly in cost areas.

In the last two years both the US and Canada have seen their coal industries decimated, with numerous mine closures. In Western Canada, their export metallurgical coal industry had virtually shut down with only one company, Teck Resources, still mining. While in the US, stricter environmental laws, combined with record low gas prices, had pushed its domestic power generation away from thermal coal. Multiple coal companies were now facing Chapter 11 bankruptcy.

Low commodity prices were also stifling exploration in both these countries, but more than anything, there was a lack of new mines under development and construction, and, as such, a shortage of capital expenditure for new equipment purchases.

Most of the major original equipment manufacturers (OEMs) had seen a significant reduction in orders and sales. Amid this depressed environment it was now more important to focus on retaining existing customers, and identifying additional revenue streams, the report found.

While North America was the headquarters of some of the leading OEMs, they were still not exempt from criticism. To explore these issues, Timetric undertook extensive mine-level research to find out how North American mines liked to engage their suppliers, who they perceived were the market leaders, and what differentiated successful OEMs from their competitors.

Further, when respondents were asked to nominate their satisfaction across a number of different factors; it was cost-related factors such as ‘total life costs’, ‘maintenance and service costs’ and ‘price’, where North American miners had the lowest satisfaction levels.

US miners’ concern over costs and the need for cost reduction was likely owing to many of their mines currently facing significant cost pressure, which had resulted in multiple company bankruptcies. Amid falling commodity prices, particularly in coal, operators were under significant pressure to address this issue.

Meanwhile, the survey revealed that Canadian respondents were still mainly focused on ‘product quality/reliability’ as the most important factor for improvement.