Siemens Strengthens Russia Presence, Sets Strategy for New Investment Climate

Siemens recently installed the first Frozen Charge Shaker function on a ball mill at Kinross Gold’s Paracatu gold
mine in Brazil. The shaker feature is one of a series of mining-related systems developed by Siemens as it seeks
to become a supplier of choice for customers seeking integrated solutions. “We combine drive technology and
power supply with automation and mechanical aspects to create new solutions that have fewer interfaces and are
less complex,” said Bernd Zehentbauer, head of business administration for Siemens Mining Technologies.
Siemens AG, the large German equipment and services supplier, has been doing business in Russia for almost 160 years. And, having survived wars, revolutions and other social and economic upheavals, it appears that Siemens’ business presence there is on solid footing to carry on for many more years.

Dr. Dietrich Möller, president of Siemens Russia/Central Asia and vice president of Siemens AG, speaking to a gathering of business journalists in Moscow in mid-May, noted that Siemens established itself in Russia by supplying 75 telegraphs for a Moscow-St. Petersburg communications link in 1851, and opened its first office in St. Petersburg two years later. Over the following century-and-a-half, Siemens established electrical equipment plants, played major roles in construction of numerous large hydropower plants, and more recently, introduced automated systems for some of the country’s largest steel rolling mills. Möller said Siemens’ regional company employs more than 3,000 people scattered throughout 30 cities across Russia’s 11 time zones. “When our colleagues in Vladivostok finish working, our Moscow office is just starting its business day,” he said.

In 2008, Siemens’ Russian operations generated more than €2.2 billion in orders, with a turnover of €1.2 billion. Most of the revenue in that figure, of course, pre-dated the global economic slump, but Möller said Siemens is optimistic about its near-term and future business outlook, having recently signed agreements for conducting energy efficiency studies in the Urals region, building an electronics equipment plant in Novovoronesh, and participating in a joint venture with the Russian state corporation Rosatom to develop and build new nuclear power plants and upgrade existing nuclear plants.

Nevertheless, Siemens is depending heavily on its expertise in electronics and automation to navigate through some immediate rough industry waters: Andreas Lemp, managing director of Siemens VAI Metals Technologies Russia, explained that Russian steel output dropped significantly starting in 2008, when it fell by 5% to 68.7 million tons; and further in early 2009 when it was curtailed by almost 30% more, representing a drop of 4.3 million tons year-over-year. Prices for some steel products fell by 50% to 75% and in October 2008, 29% of the nation’s iron and steel production was temporarily shut down. Steel output in 2009 is expected to be 30% less than 2008’s level.

On a global basis, Siemens considers the Russian steel industry quite competitive: it offers high profitability (24% in 2007), worker salaries more than three times lower than those in developed nations, has access to plentiful domestic raw materials and has very low metal conversion costs. To cope with the economic slump, the Russian government issued a list naming 32 metals companies that would be granted “official support.” In return, the government expects these companies to cut costs and increase profitability by optimizing their raw materials stock, carefully reviewing planned investments, reducing receivables and centralizing procurement. Over the longer term, these companies also will be expected to liquidate excess or outdated facilities, slow foreign expansion plans and review their development strategies for the domestic market.

Siemens announced the pending installation of a second 16-m3 hybrid flotation cell at the Minera Los Pelambres
copper operation in Chile, where an initial cell installation helped the mine increase its molybdenum recovery rate
by about 2%. Siemens’ AC drive system was also integrated into Komatsu’s new 860E-1K haul truck.
Against this backdrop, Siemens VAI Russia’s focus will be on iron and steel plant upgrades and automation solutions, and increased activity in its service businesses. Siemens expects its Russian company to generate and participate in related projects totaling as much as 500 million rubles.

Bernd Zehentbauer, head of administration for Siemens VAI Metals Technologies’ mining technology business, told the assembled journalists the Russian mining industry is showing strong symptoms of the same economic flu that has weakened the global mining sector—lack of access to capital, postponement and cancellation of projects, a heightened awareness of high material and energy costs and closer focus on operating expenses and more attention to environmental sustainability. Zehentbauer said Siemens sees an estimated $200-billion shortfall in mining investment in the coming years.

To cope with this downturn, Siemens’ strategy will be to continue to develop its role as a “process solutions provider” rather than just an electrical systems integrator. This, said Zehentbauer, can be accomplished by implementation of the company’s drive and automation technology and energy-supply know-how with its process technology expertise to offer customers standardized solutions packages designed for cost-effective capital utilization and lower operational costs.

He used an example of Siemens’ role in installing a 13.5-km-long, 6.000-mt/h belt conveyor system for German coal producer Vattenfall Europe Mining AG to illustrate how the company can exploit certain synergies as a general contractor, including the convenience and efficiencies provided by having one major technology partner, a smaller number of project management interfaces, a consistently integrated technological solution, possibly reduced spare parts inventories and more efficient training implementation.

Specific recent examples of Siemens’ technological accomplishments in mining and processing, said Zehentbauer, include the continued development and acceptance of its hybrid flotation cell technology, with the pending installation of a second 16-m3 hybrid cell at the Minera Los Pelambres copper operation in northern Chile, where an initial cell installation helped the mine increase its molybdenum recovery rate by about 2%; and the integration of Siemens’ new AC drive system in Komatsu’s new 860E-1K haul truck.

Exhibition Report: Preparing for Recovery
This year’s Intermat exhibition has gone, having been more successful than some anticipated; meanwhile, the bauma 2010 team is gearing up for another mammoth event.

The organizers of Intermat 2009, held at Paris-Nord Villepinte from April 20–25, 2009, said the event maintained its significance as an international exhibition, despite the obvious impact of the economic climate.

Although there were notable absentees from major Western-based construction, quarry and mining equipment manufacturers, attendees remarked on the counter trend among manufacturers from the People’s Republic of China who were present in considerable force—some 106 companies signed up to exhibit. The PRC was also one of the nations sending an official delegation to the exhibition. It is clear that Chinese firms intend to compete in international construction and mining markets as well as meeting still-growing demand in China itself.

For visitors working with earthmoving, mines and quarries, South Africa’s Bell Equipment had a significant new model on show. Still the only supplier to offer an articulated dump truck with a 50-ton (45- mt) rated payload, Bell unveiled a 45-toncapacity machine to fill the gap between its B50D and B40D models. Bell says the B45D is completely new and unique in its category. It has a 350-kW Mercedes-Benz engine, slightly smaller than the B50’s 390-kW diesel. Its dump body is as wide, but slightly less high, giving it a lower center of gravity. The differential and drop box ratios are the same as for the B50D.

Bell Equipment Product Marketing Manager for ADTs, Stephen Jones, said that the rationale behind the B45D is to fill a gap that exists in the market for an ADT that has a larger payload than a 40-ton unit, thereby providing more option to meet site and customer specific needs.

“Some of our competitors decided to fill this need in the market by marginally increasing the payload of their existing 40- ton truck. However, we opted to introduce a completely new machine because our customer poll showed that they consider our B40D to be an optimized package in terms of efficiency, reliability and a match for production tools. In practice the B45 will take an additional scoop from a loading excavator as opposed to a mere specification upgrade.

“The B45D is based on the B50D and, as such, its shares the same proven components that have been used in the 50-tonner since 2002. It is fitted with the 16-liter Mercedes Benz OM502LA engine but has an output of 350 kW as opposed to the 390-kW rating of our flagship.

“The differential ratio and final drive ratio are the same as the B50D. Likewise, the rod and barrel of the tip cylinders are also the same size as the larger truck, but with a shorter length to aid the tipping geometry. The width and low center of gravity creates exceptional stability and the B45D is able to run on 29.5R25 tires at full speed and with a load.”

Other key features include wet disk braking on all six wheels and standard active front suspension with comfort ride walking beams as an option on the rear.

Bell Equipment’s new B45D articulated haul truck is based on its larger stablemate, the B50D, and shares many
of the same components including the B50D’s Mercedes-Benz engine, derated to 350 kW for use in the B45D.
bauma 2010 event organizer Messe München reports that exhibitor interest has accounted for the entire exhibition space reserved for the show—540,000 m2 of exhibition halls and open-air space at the New Munich Trade Fair Center. In particular, said Exhibition Director Georg Moller: “Inquiries from first-time and regular exhibitors from Asia are more numerous than ever before.” This suggests that the proportion of international exhibitors will be greater than the 54% (1,643 of 3,002) recorded in 2007.

The organizers also expect the normally high level of innovative new products on display to be maintained. The VDMA, as conceptual sponsor of the event, will launch an international innovations prize. Covering five categories, the competition is open to all exhibitors at bauma 2010 and the deadline for entries is September 15, 2009 (

Within the underground mining segment of the exhibition visitors will be given an overview of recently developed continuous mining techniques for ore extraction and haulage. As well as eliminating the need to stop production for blasting this technology will increase face output rates while allowing selective mining without dilution.

As featured in Womp 2009 Vol 06 -