The latest of the five new contracts was for $10.2 million with China’s second largest coal miner, China Energy Coal, for seven 50 tonne longwall carriers (LWCs) to be deployed at the company’s Pingshuo mine.
Industrea also announced an additional four contracts had been signed since March 2011 to supply a total of another eight 50t LWCs to Datong worth $2.7 million, to Baoji Qinyuan for $1.5 million, to Shenhua Ningmei for $6.3 million and to Yulin for $1.4 million.
Industrea managing director and chief executive Robin Levison said the new contracts announced were in line with the company’s forecast that the Chinese New Year would usher in new capital budgets for the group’s Chinese customers and increased orders for Industrea Mining Equipment (IME).
Industrea’s business in China continued to gain significant traction, driven by China’s status as the world’s largest producer and consumer of coal, he said.
China relies on coal for around 70% of its rapidly expanding energy needs.
“The growth plan for our market leading, underground IME diesel products is now strategically interlinked with the Chinese government’s ambitious five-year growth plan for its coal industry,” Levison said.
“With more than 95% of China’s coal reserves underground, the country’s coal mining sector is increasingly harnessing specialised equipment and technology to consolidate operations into larger and more highly mechanised mines, along with a concerted focus on safety improvements.
“Industrea’s established position and reputation in China will see us as a major beneficiary of the strong growth in the country’s mining products market, which is forecast to exceed 20% per annum over coming years and reach 150 billion RMB [renminbi] by 2015.”
Levison said the new contracts, coupled with an extremely robust level of domestic orders, ensured IME’s Hunter Valley production facility had entered the new financial year with a strong forward order book in place, with operations benefiting from economies of production scale.
“With new capital budgets now in place post the Chinese New Year with most of our customers, we are confident of securing further contracts for IME diesel equipment in the first half of financial year 2012,” he said.
Levison said the facility established in China to manufacture an IME flameproof and explosion proof personnel and materials vehicle exclusively for the domestic underground coal mining market was now well progressed.
The company is on track to complete production of initial products to exhibit at the China Coal Show in October.
Industrea’s clients include BHP Billiton, Rio Tinto, Xstrata, Barrick Gold, Anglo Coal, Vale, Anglo American, and leading Chinese firms China Shenhua Energy, Jincheng Anthracite Mining Group, and Shanxi Asian American Daning Energy Corporation.
