And then there is the conveyor belt industry, where that exact scenario has Boris Illetschko of Sempertrans – the third or fourth biggest player, “depending how you count it,” he says – licking his lips.

“There is a huge concentration in the market right now, and a lot of customers don’t appreciate this,” the Sempertrans chief told ICN sister publication Australia’s Mining Monthly as we stood below one of the excavators at Polish Energy Group’s (PGE) Belchatow coal mine, a neighbour to Sempertrans’ newly expanded belt-production facility.

“Because [Continental unit] Conti[Tech], with the purchase of Goodyear [business Veyance Technologies], doubled its size, they [the customers] are too dependent on one supplier. In order to diversify their customer base again, they are looking for an alternative source – and there are not that many.

“When we talk to customers, a lot of them tell us they are interested in working more with us now – and this is especially true on the OEM side – in designing the conveying system, because they want to diversify their supplier base."

Belchatow (pronounced “beh-hut-ov”) is home to the biggest man-made hole in Europe, and 99% of the 150,000t/d of lignite coal produced there is moved by conveyor belt to the biggest thermal power plant in Europe, which supplies 20% of Poland’s energy demand.

Sempertrans, one of the Austrian Semperit Group’s four business units, supplied 95% of PGE Belchatow’s 160km conveyor belt system (320km if you consider that the belts have to travel back and forth). One-hundred-and-ninety-year-old Semperit entered Poland in 2000, but the partnership between the conveyor-belt business and the coal mine and plant goes back to the Communist era, when both were owned by the state.

ICN sister publication Mining Journal was in Poland to attend an opening ceremony for Sempertrans Belchatow’s new operational expansion, and Illetschko and Semperit Group CEO Thomas Fahnemann were buoyant about the prospects for commercial expansion – including in the mining industry, which accounts for about 60% of the segment’s sales.

Group revenue in 2014 was €858.3 million (US$961 million), of which Sempertrans accounted for 17%, Sempermed, dealing mainly in examination and surgical gloves, for 44%, Semperflex, a specialist in hydraulic and industrial hoses, for 24%, and Semperform, dealing in a miscellany of handrails, window profiles, and cable-car rings and ski foils, for 15%.

Sempertrans boasts a range of conveyor-belt products equal to that of ContiTech, claims Illetschko, but is eight-to-nine times smaller by revenue, leaving it room to grow within the approximately $5 billion global conveyor-belt market. Fenner Dunlop is number two, and Bridgestone is roughly on a par with Sempertrans but does not report belt revenues as a separate segment.

Traditionally, Sempertrans’ biggest market has been in Europe, where it has plants in Belchatow and in Argenteuil, France. Its two other factories are in China and India. Its fastest-growing market is South America, where clients include MMG at Las Bambas in Peru, and hotspots include Brazil, although “this is not so easy because of the high import tariffs”

The long-term goal is to compete everywhere, including Australia and North America. In Australia, where only ContiTech and Fenner Dunlop produce locally and most of the surplus demand is met by Chinese producers of “second tier, less-demanding belts”, Sempertrans has appointed a sales director with 35 years of industry experience and is close to appointing an exclusive distributor.

“Australian companies are very demanding, and they are used to getting very good service,” Illetschko said.

“You have to have belt distributors [and] more importantly service companies who do the installation, who do the maintenance, because [the companies prefer to] not just buy belts and take care of them by themselves. And so, you need a local distributor in order to really have a footprint in the market. They would do everything, and we would just support from a technological point of view. I would not have a sales force covering the whole country, like in other countries where we have a lot of salespeople.”

Other regions have produced different challenges for Sempertrans. In Canada, the right compounds were needed to make the conveyor belts cold-resistant and – in the case of customers in the oil sands business – oil-resistant. In Chile, it is not so much the distance from Poland that is the problem but the distance from the port to the mine. Commented Illetschko: “Even if you had the conveyor belt factory there [in Chile], it would not be such an advantage.”

Back in Belchatow, Sempertrans invested about €40 million to expand capacity for production of heavy-duty steel-chord and textile conveyor belts. It has added its most modern production line yet, and has created space for the three additional lines it plans to add by 2017. About 120 new jobs have been created as a result of the expansion. The plant is fully booked, despite the tough market conditions for mining.

The increased capacity will also allow Sempertrans to push its new power-saving TransEvo conveyor belt – which accounts for about 25% of the belts at PGE Belchatow with more being added all the time – to the global market.

Illetschko used the metaphor of the tyre industry to explain the conveyor-belt industry’s resilience during a downturn in mining activity.

“If you buy a car, you don’t care about the tyre, as long as it says Bridgestone or Conti[nental] or Michelin, or whatever, as long as a brand is on it. [But] when you have to cross the Sahara in order to reach a customer, and you have three flat tyres, you suddenly care. It’s similar for mines. If the conveyor fails, the whole mine might need to stop – I mean, not here [at PGE Belchatow], because they have several lines – but when you go to a copper mine or an iron ore mine, often you only have one conveyor line going to the crusher. If the conveyor stops, you’ll lose thousands of dollars within hours,” he said.

Although there are obvious benefits to having such a significant customer right next door, PGE Belchatow does not make any significant contribution to Sempertrans’ research and development – mainly because different compounds are needed for each type of rock and mine. The Semperit Group’s corporate R&D is conducted in Wimpassing, just outside of Vienna, while Sempertrans has its own laboratory in Belchatow to test conveyor belts.

At present most business has to do with replacements, rather than new projects, and so the company is heavily investing in application engineers, whose main task is to address specific customer needs. In regards to replacement, belts, they must answer a range of questions. Why was the old belt damaged? Was it designed properly? Did the customer take the right care? Were the rocks falling onto the conveyors larger than expected?

Ultimately, with all the associated risks, Illetschko believes the market for conveyors will only grow in relation to alternative options such as trucking.

“You have a big investment at the beginning, but then it’s the most economic,” he said.

Doubly so for lignite mines, he added, where “the plants are usually built where the mines are. The lignite mine’s reserves also have to be big enough in order for it to make sense to build the plant. Because lignite has so much water content, ash, etc., you could not transport it for long distances – it wouldn’t make economic sense.”

At Belchatow, excavation at the pit we visited will be completed around 2018, and then the question will arise of whether to build a conveyor system from the plant to the more distant coalfields, or dissemble some of the plant and move it closer.

Either way, there is sure to be more business in it for Sempertrans.