Heavy equipment firms get into gear

Chinese producers of vehicles, rail cars expand abroad via global mining giants, reports in Perth, Australia.

Hu Weiying, a 30- something engineer from Hunan- based Xiangtan Electric Manufacturing Group Co Ltd, works in Western Australia’s Pilbara region, where many mining giants have iron ore projects.

Hu and two colleagues have been working at the Tom Price mine, owned by Rio Tinto Plc, the BritishAustralian multinational mining giant, for several months as the Chinese manufacturer expands into overseas markets to serve its mining clients.

“I am responsible for collecting data on four XEMC trucks” used by Rio Tinto at the project, Hu said. “The data will be used to improve our trucks.”

The four trucks, each of which can haul 230 metric tons, were shipped to Tom Price in June 2012, the first time that Chinese-produced mining vehicles were sold to a foreign customer.

It was

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As mining titans such as Rio Tinto, BHP Billiton Ltd and Fortescue Metals Group Ltd sell vast volumes of iron ore to a resource-hungry China, Chinese manufactures are expanding their Australian business by delivering ore cars, trucks and modular accommodation at the project.

On Nov 20, Rio Tinto signed a long-term agreement with XEMC to supply and service heavy mobile equipment for its global operations.

According to the miner, it was the first global agreement Rio Tinto has signed with a Chinese supplier, which demonstrated that Chinese manufacturers are capable of making worldclass products.

Under this agreement, XEMC’s mining trucks and other equipment will be used not only at the Tom Price mine but at other mines owned by Rio Tinto.

Since trucks and mining equipment are mostly customfor use in extreme conditions, such as extremely hot locations or on rocky

roads, the cooperation with Rio Tinto will help the Chinese side gain experience for future overseas orders.

XEMC Chairman Zhou Jianxiong said that besides producing highquality equipment, the company is working to improve its after-sale services.

Another company, Qiqihar Railway Rolling Stock Co Ltd, a subsidiary of China CNR Corp Ltd, is supplying ore cars for Rio Tinto.

As of September, there were 6,500 ore cars from QRRS being used by Rio Tinto to move iron ore out of the Pilbara region, according to Heath Harnden, general manager of railways maintenance at Rio Tinto’s iron ore division.

Just back from a 10-day business visit to China, Harnden said that the company plans to increase the number of ore cars from 6,500 to 11,500 by 2015, and all the new ones will be from China.

“We are very proud QRRS,” he said.

“They have increased the ore car’s load capacity from 50 cubic meters to 55 cu m based on Rio Tinto’s request, which helped us to do our job more efficiently.”

The company even won Rio Tinto’s award as best supplier in emerging markets in 2013.

“The cooperation with Rio Tinto since 2004 has provided great opportunities for Chinese heavy duty equipment manufacturing companies like us to expand business overseas,” said a statement on QRRS’ official website.

QRRS is also a supplier for BHP, to which it sold 2,500 custom-built ore cars. Each car can carry 40 tons .

Besides mining equipment makers, Jiangsu-based Yangzhou Tonglee Reefer Container Co Ltd, a subsidiary of China International Marine Containers Group, is providing modular accommodation in many Pilbara mining camps.

Australian miners live in facilities built by Chinese companies, drive mining trucks made in China and deliver iron ore in rail cars from Chinese makers.

That iron ore eventually ends up in China’s steel mills.

According to Rio Tinto, the company purchased more than $5 billion worth of goods and services from China for use in its operations worldwide over the past four years.

BHP also has a long-term partnership with Chinese suppliers. It set up a China procurement team based in Shanghai in 2007.

And in the past six years, BHP has purchased products worth $4 billion in China.

BHP’s Chief Executive Andrew Mackenzie said that through China’s strength in steelmaking and manufacturing, part of the iron ore that is exported to China comes back to Australia in the form of high-quality infrastructure and equipment.

“In the past six years, we spent around $4 billion buying capital goods and consumables from China to run our business in Australia,” he said.

BHP works with more than 50 suppliers and service providers. In addition to ore cars and modular accommodation, BHP purchases steel fabrication from Tianjin-based Bohai Oil Marine Engineering and Supply Co Ltd for use at its Jimblebar mine in the Pilbara region.

The Chinese steelmaker won a contract valued at $55 million with BHP in 2011.

Since then, the company has been growing as an international supplier of steel structure modules.

“The project has definitely assisted us in our overseas expansion,” said Peng Wencheng, president of Bohai Oil.

Li Xinchuang, deputy secretarygeneral of the China Iron and Steel Association, said the mining giants’ increasing procurement in China reflects their commitment to the market, which makes them look better than pure sellers.

Wei Zengmin, an analyst at consultancy Mysteel, said that as China’s manufacturing ability improves, mining companies will definitely increase procurement in China.

to work Contact the writer at dujuan@chinadaily.com.cn

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