Mining Machinery and Equipment, Except Oil and Gas Field Machinery and Equipment

SIC 3532

Companies in this industry

Industry report:

This category includes establishments primarily engaged in manufacturing heavy machinery and equipment used by the mining industries, such as coal breakers, mine cars, mineral cleaning machinery, concentration machinery, core drills, coal cutters, portable rock drills, and rock crushing machinery. Establishments primarily engaged in manufacturing construction machinery are classified in SIC 3531: Construction Machinery and Equipment; those manufacturing well-drilling machinery are classified in SIC 3533: Oil and Gas Field Machinery and Equipment; and those manufacturing coal and ore conveyors are classified in SIC 3535: Conveyors and Conveying Equipment.

Industry Snapshot

The mining equipment industry is highly dependent on mining activity in the United States and the world. When demand for mined materials is high, mine operators order new machinery; when demand is low, orders fall off. Mining machinery manufacturers are cushioned somewhat from demand cycles because different kinds of mines use similar machinery. Thus, a decline in coal mining, for example, may be offset by a boom in salt mining.

The mining machinery industry draws its supplies from a variety of sources. Mill shapes and forms made from carbon alloy, stainless steel, copper, and aluminum are the most highly consumed materials. Castings from gray and malleable iron, steel, aluminum, and copper, and forgings from iron and steel are also heavily consumed. Fabricated structural metal products, speed changers, gears, industrial high-speed drives, and roller bearings constitute other significant materials consumed by the industry.

The U.S. mining machinery industry generated $4.7 billion sales in 2009. Most establishments in the industry were small, with about 77 percent employing fewer than 25 workers. Pennsylvania had the largest number of employees, followed by Oregon, Texas, Florida, and Virginia. Important segments of the industry included the manufacture of drills and drill bits, auger machines, and crushing, pulverizing, and screening equipment.

Background and Development

Mining came late to the United States, for early surveyors assumed that there were no significant mineral resources to be found in the country. Politicians and statesmen arguing over currency shortly after the Revolutionary War ruled out gold and silver because the United States supposedly did not have the resources to produce this type of exchange. Benjamin Franklin said, "Gold and silver are not the produce of North America, which has no mines." Another eighteenth-century observer, Cornelius de Pauw of the Netherlands, remarked that "In all the extent of America there are found but few mines of iron, and these so inferior in quality to those of the old continent that it cannot even be used for nails." As history has shown, these remarks proved wildly presumptuous. Explorers moving westward across the country in the nineteenth century discovered rich reserves of gold, silver, lead, copper, iron, nickel, coal, and many other ores and minerals. The country proved far richer than any of the original settlers imagined.

The first mechanisms to dig and extract mineral resources from the earth were hammers, chisels, shovels, and buckets. More advanced operations used single cars on railways to convey materials to the surface of underground mines. The hammer and chisel were the first instruments to be replaced by pneumatically powered cutting devices. British inventors were nearly one decade ahead of the Americans in the development of mechanical power to cut into the ground. In 1850, a Glasgow mine owner proved compressed air could be used to power underground machinery. By 1853, a cutting chain machine was developed, which matured into a machine called the Gartsherrie, patented in 1864. The Gartsherrie is considered the precursor of modern coal cutters.

A rock drill was invented and patented by Simon Ingersoll in 1870. After Ingersoll's patent changed hands several times and improvements to his invention had been made, Addison Rand was able to persuade mining companies to use his new technology instead of hammers and chisels. The two inventors came together in 1905 and advertised themselves as "the largest builder of air power machinery in the world." Ingersoll's side of the operation specialized in construction work, while Rand's specialized in underground mining.

Though the industrial revolution was dependent on abundant supplies of coal to generate power, the coal mining industry lagged far behind others in using machinery to ease the work of men. Men manually shoveled coal into coal cars well into the twentieth century. Keith Dix, author of What's a Coal Miner to Do?, wrote: "It is ironic that the advance in technology and management, which gave modern industry its momentum, bypassed the one industry on which most others depended." By 1948, roughly 33 percent of the country's underground coal continued to be loaded by hand.

Joseph Joy, who was responsible for the mechanization of coal loading, is considered the single most significant inventor in this industry; he was awarded 106 patents between 1904 and 1944. Joy developed the Joy Loader in response to two insistent demands: American industry's demand for an increasing supply of coal and newly organized mineworkers' demand for improvements in working conditions that were frequently subhuman. Following the development of the Joy Loader, men would no longer need to shovel coal by hand, though many would lose their jobs as a result. The Joy Manufacturing Company, known in the 2000s as Joy Global, claimed that Joy loaders accounted for 72 percent of all coal loaded mechanically by 1954.

During the 1970s, the U.S. government pushed the development of new mining technologies through legislation on health and safety, air and water pollution, and environmental protection of the land mined. Such efforts changed the face of the mining industry, requiring skilled staff to operate and maintain mechanized production. Productivity in underground coal mines was hampered due to additional resources required to prevent accidents, black lung disease, and acid runoff. In surface mining, additional resources were necessary to meet land restoration standards and to negotiate with those who claimed the land for agricultural purposes. Mining machinery manufacturers sought to capitalize on the changing industry by providing machines to do the required jobs.

The mining equipment industry suffered a substantial drop in shipments during 1982, when shipments were valued at $2.1 billion. By 1983 they had fallen to $1.5 billion and only recovered to $1.6 billion in 1991. The industry continued a slow growth trend with total sales at approximately only $1.7 billion in 1996.

By the 1980s, U.S. government interest in mining was concerned with addressing import-export imbalances. A 1986 report suggested that foreign penetration of the U.S. machinery market was primarily due to the strength of the dollar, high domestic material and capital costs, and generous financing and credit terms offered by some foreign governments to support export sales. The report projected that U.S. mining equipment manufacturers would face a steadily growing export market, shifting to Latin America, Asia, and Africa. World events, such as the North American Free Trade Agreement, the emergence of Korean and Taiwanese manufacturers, and the plea from South Africa, a major mining country, to lift trade sanctions, underscored the significance of these projections and the importance for U.S. manufacturers of developing the export market.

Due to the high price of new mining machinery, the used machinery market was very healthy in the 1980s, especially outside the United States. This demand created an incentive for thieves to steal equipment, which was a relatively easy task. Machinery is usually left in unsecured areas and is easy to start, difficult to trace, and easy to sell. The increase in equipment thefts in the early 1980s spurred Deere & Company to issue a Manufacturer's Certificate of Origin (MCO),which was adopted by the Construction Industry Manufacturers Association in 1983. More manufacturers started to use the MCO, which reduced the thefts of certain machinery. As used equipment buyers become more aware of the frequency of machinery theft, more MCOs were requested upon the purchase of used equipment.

U.S. manufacturers maintained a significant, though not a leading, share of the world mining machinery industry in the early 1990s. The strongest competitors in the world market were Japan, Germany, France, Canada, South Korea, Taiwan, and South Africa. While mining in the United States dropped sharply due to a worldwide surplus of metal and mineral supplies, mining abroad expanded quickly, opening new markets for U.S. manufacturers. The former Soviet Union had vast amounts of natural resources, and some analysts suggested that Russia and the other nations should enter the world marketplace through the sale of these resources. Many of the former Soviet Union's mines were in dire need of modernization and capital investment.

Mining machinery and equipment manufacturers experienced a downturn in the late 1990s. Diminishing demand for domestically produced minerals fueled the initial decline, decreasing mining activity substantially. To combat weakened demand, mining equipment companies relied on the export market for business opportunities, but this market was far from stable. Asia--once a key market for mining equipment--had suffered from a severe economic downturn in 1997. Once-busy mining operations in China and Australia slowed or halted production, thereby limiting the amount of equipment they needed. At the same time, other Asian industries also cut back production in the wake of downturn. As factories limited production, they needed less coal, which adversely impacted the mining equipment industry as well. According to the Wall Street Journal;coal consumption slowed worldwide in the late 1990s. Russia's mining operations encountered hard times as well, and U.S. equipment manufacturers watched as this important market for their goods dried up. The Asian economic crisis of the late 1990s decimated exports of mining equipment, as did the collapse of the Russian economy.

The situation in the United States was not much better. Copper prices were near record lows, which stalled copper mining operations. Nevertheless, in July 1999, P&H MinePro, the above-ground mining business of Harnischfeger Industries, received a substantial order. Southern Peru Copper Corp. purchased over $20 million of equipment for its expanding Cuajone copper mine in southwestern Peru. P&H sold two electric mining shovels, three rotary blasthole drills, and a large wheel loader in this transaction.

Industry shipments fell from $3.0 billion in 1998 to $2.1 billion in 1999 and to $2.0 billion in 2000. The cost of materials declined from $1.5 billion in 1998 to $1.1 billion in 2000. Over the same time, the total number of industry employees dropped from 14,599 to 11,237.

The employment level in this industry dropped sharply throughout the late twentieth and early twenty-first centuries. In 1987, 13,600 people were employed by the industry; in 2000, that figure had fallen to 11,237. By 2007, only 10,820 U.S. workers were employed by the mining machinery industry. Of those, 65 percent were production workers earning an average of $35.63 an hour, much higher than the average wage across all manufacturing industries.

Current Conditions

According to the latest available figures from the National Mining Association, the United States produced $3.8 billion worth of mining machinery and equipment in 2008. About 39 percent of this total consisted of portable drilling rigs and parts; underground mining machinery (not counting parts) accounted for 25 percent of the total; crushing, pulverizing, and screening machinery (except portable) for 19 percent; and other mining equipment for 17 percent. Other figures showed that 52 percent of portable crushing plants, stationary grinding machines, stationary crushing machines, and sorting, screening, separating, and washing machines were exported.

The outlook for the industry was promising as the United States headed into the second decade of the twenty-first century. After dealing with the global economic recession of the late 2000s, manufacturers hoped for a recovery and looked for markets into which they could expand. According to a June 2010 press release from Joy Global, "Demand growth in the rest of the world is now adding to high demand from China and India to keep global commodity demand strong." China was increasing its power production at a rate of about 20 percent a year, so the demand for machinery to mine coal and other minerals was expected to remain strong.

Industry Leaders

Joy Global, based in Milwaukee, Wisconsin, and the company resulting from Joseph Joy's work in the early nineteenth century, was the industry leader in the early 2010s. The company had two subsidiaries: Joy Mining Machinery produced underground mining equipment, and P&H Mining Equipment produced equipment for surface mining. Joy Global had overall annual sales of nearly $3.6 billion in 2009, abut half of which came from outside the United States.

Other key players in the industry included Texas-based LeTourneau Technologies; Bucyrus International Inc. of Milwaukee, Wisconsin; and Metso Mineral Industries (formerly Svedala Industries, Inc.). Bucyrus had 2009 sales of $2.6 billion, 70 percent of which came from outside the United States.

America and the World

The U.S. mining equipment manufacturing industry continued to rely heavily on exports in the late 2000s. According to Supplier Relations US, the United States exported about 80 percent of industry goods worth $2.5 billion to 175 countries in 2009. Imports from 62 countries were worth only about $900 million.

Research and Technology

Mining equipment is considered mature in terms of design and innovation. Therefore, any improvements rely on research and development of new materials and advanced sensing, control, and computer techniques. Innovations in technology have typically sought to achieve gains in productivity or worker safety. The dangers of underground mining prompted underground machinery designers to develop remote controlled and automated mining systems. These systems reduce production costs, increase productivity, and increase worker safety.

Other technological devices were found in surface mining, where sensing and control systems are frequently installed. Blast hole drills employ automated systems that regulate the speed and feet rate of the drill bit. Mining shovels have on-board microprocessors, which relay information and record data. Because they can be added to existing equipment, these technologies have been developed by many manufacturers.

Another new machine was Caterpillar's autonomous truck control system. The benefits of the driverless robot mine truck include lower cost, continuous work, and opertion in remote locations, such as northern Canada, where it is difficult to hire and get truck drivers to the machines at all. The Caterpillar truck was one of several robot mine trucks in general operation worldwide in the 2000s.

Other advances in mining equipment in the late 2000s included wireless transmitters such as the Air-Eagle SR Transmitter made by Pennsylvania-based BWI Eagle Inc. The transmitter, which was approved for use in underground mines in 2008, could receive signals from up to 1,000 feet away and provided applications for the control of underground equipment.

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