Lang said mining companies would be better served by building personal relationships with their supply base rather than whingeing about the equipment shortages – something Lang believes could have been largely avoided with better planning.
“I don’t like the term ‘shortages’ – I take offence to that. Increased demand above and beyond capacity due to lack of forecasting can not be termed shortages. Equipment is available, it is coming off the production line – you’re just not getting it. If you want to get it, you have to change the way you deal with suppliers,” Lang said.
He said part of the reason for the current equipment supply challenges was that mining simply wasn’t the highest priority for construction firms and many major equipment suppliers. For example, mining accounts for only 16% of Caterpillar’s total sales.
“You can’t bully someone into doing what you want when mining only makes up a small percentage of sales,” Lang said.
“You are in competition with $30 billion worth of other projects committed in Australia today. Your needs may not be as high a priority as you hope.”
The solution? A re-engineered relationship with better communication from both parties – including personal relationships. “How many CEOs of a mining company know the CEO of their major supplier?” Lang asked.
Lang also argued for mining companies to reveal more information about their future projects beyond the usual three years offered now, so suppliers could also plan and be more willing to commit the resources and money in the current boom.
He said mining companies needed to understand that when prices from suppliers were going up in the current boom it was a direct reflection of the increase in raw materials.
“We need to see how we can work together, not just for today, but for the next boom,” he said.
Lang said he constantly heard comments like “I am sick and tired of suppliers ripping us off”; yet he said figures showed percentage profits were much lower for suppliers compared to mining companies.
In response to a question from the floor about the areas suppliers currently lacked in, Lang said the industry lacked professionalism and failed to understand the true needs of its clients.
MESCA’s membership includes 255 member companies covering the whole supply chain. MESCA provides the industry with information to assist in optimising the various opportunities within the mining, minerals processing and energy sector. Part of MESCA's offering is to stage 25 events annually to enable valuable networking and industry updates.