Speaking at the company’s annual general meeting yesterday, Levison estimated the Chinese national safety regime this year had reduced about 300 million tonnes per annum of coal production capacity.
He said by the end of 2008 China had 469 large coal mines with annual capacity of more than 1.2Mtpa and 36 coal operations with output greater than 10Mtpa.
By the end of June 2009, Levison said the country had 17,947 coal mines with 15,235 classified as small operations.
China’s safety overhaul of its notoriously dangerous coal industry this year has already paid dividends, with state media agency Xinhua estimating a death toll of 1892 by the end of September, a 24% fall year-on-year.
Levison said the Chinese central government was providing 3 billion yuan ($US439.46 million) a year for coal mine safety and noted that coal operators in Shanxi Province were collecting up to 40 yuan per tonne ($5.86/t) in safety fees from the government on a sales before tax basis.
While the safety drive has driven up China’s coal imports to unprecedented levels, saving Australia’s industry from some global financial crisis pain, the new policies have also been a boon for equipment suppliers.
Industrea has chalked up more than $A38 million of sales to the country in the current financial year.
With underground explosions causing most of the deaths, China has ordered nine directional drilling and methane gas drainage systems from Industrea.
Industrea also has major revenue streams from supplying underground roof support carriers, mining services and collision avoidance systems.
Levison expects further sales growth in China, South America, South Africa and India, with the product support centres in China and Chile anticipated to achieve recurring revenue from after-sales service.
He also expects local subsidiary Huddy’s Mining Services to benefit from increased production targets at the Mt Thorley Warkworth and Baralaba mines.
Industrea made it clear it is continuing to pursue more acquisitions, especially in intellectual property-protected technology related to mining services.
Shares in Industrea shed half a cent to 47.5c this morning.
