On the face of it General Electric’s takeover of Industrea is a good one for both parties.

GE gets some pretty handy mining technologies and another avenue into China.

For its part Industrea gets some serious financial backing thrown at developing its technologies. Its staff would get the benefit of working within what would have to be one of the premier commercial technology development environments.

As a quick recap, GE is offering $1.27 cash a share for Industrea, which values the company at about $470 million.

Industrea will be selling its Industrea Mining Services division – which was the old Huddys earthmoving business – separately.

When Industrea bought Huddys it seemed an odd addition to what was essentially a cutting edge technology development business. However, it did make sense. It brought in handy cash flow to fund Industrea’s research and development.

That R&D led to products, mostly aimed at the underground coal sector, such as longwall chock carriers, longwall shearer carriers, a mine personnel carrier and its DZR Mine Dozer.

The company also was on the verge of releasing a 10 tonne load haul dump vehicle for the coal industry.

The 10T LHD is set to complement Industrea’s fleet by adding a multipurpose vehicle.

“With the addition of our unique LHD we will be able to provide a complete transportation system for all longwall equipment and materials used in underground coal mines,” Industrea chief executive officer Robin Levison said at the time.

On the technology front its offerings included a collision avoidance system, a drill guidance system, remote asset monitoring and an in vehicle monitoring system.

Should the takeover go ahead, they will become offerings of GE, which, while it has an impressive suite of offerings, does not have that coal face access that Industrea offers.

So the call went out.

It seems Levison did not waste no time at all. He heard the bell and he answered the call. Some would say it came to him as to us all. Sadly, though, for yet another Australian mining technology business it was time for the hammer to fall.

What saddens those who follow the mine supply sector – yes there are sad lonely little anoraks who do – is that Australia cannot seem to manage to do this itself.

Here we have a country that has a host of competitive advantages in this sector. It has all the challenging ore types and rock formations needed to test those technologies and, theoretically enough of a critical mass in terms of a mining industry to develop them.

Yet time and again these businesses fall into foreign hands and the fruits of local smarts go elsewhere.

Here is where Supply Side reckons Julia Gillard and her Canberra cronies have got it all wrong. Instead of trying to siphon revenue from the mining sector to prop up ailing eastern states economies and bleed GST revenue from the west for the same reason why not try this?

Address the problems that face the mining supply sector and perhaps put a few carrots in place to encourage some of those businesses to set up in the struggling states.

After all, one of the greatest mining technology developments in Australia came out of Tasmania. Dale Elphinstone rummaged around the parts shed of his Caterpillar dealership and turned out a range of underground mining equipment that was world class.

Again, that development ended up in foreign hands – in this case Caterpillar bought it.

Elphinstone is these days working on an alternative haulage system called Haulmax – a truck that can carry dump truck sized loads over distances a conventional mining truck could not manage. That also has a strong Caterpillar connection, being built out of the Caterpillar parts bin and if it proves itself it could well go the way of Elph Underground.

Below that and there are a lot of promising technologies emerging.

These producers, though, have the problem of not being able to access finance to get their projects off the ground.

The government is well aware of these issues but as yet does not seem to have come up with any sort of fix.

So here is a suggestion. Instead of trying to prop up votes in marginal eastern states seats with the proceeds of the Minerals Resource Rent Tax, why not do something useful with the money? How about some sort of venture scheme to fund developments in an industry that has proved extremely successful?

This article first appeared in ILN's sister publication MiningNews.net.