OEMs Upshift as Haul Truck Market Picks Up Speed
New rigid-body hauler models provide payload, performance and efficiency improvements
By Russell A. Carter, Managing Editor

Caterpillar’s initial entry into the modern electric-drive haul truck market is its 350-ton-capacity 795F AC
model. Shown here is one of two 795s currently running in a pilot program at Rio Tinto’s Bingham Canyon
copper mine in Utah, USA.
Modern-day haul trucks are the product of what appears to be a paradoxical environment. At the most basic level, their primary job is to carry hundreds of tons of rock or dirt from Point A to Point B—over and over again. This task mostly requires brute power, robust construction and extreme durability. On the other hand, their value— cost of ownership plus the potential worth of the payloads they carry—demands ongoing attention to health, performance and preventive maintenance. The result: an array of machines that may be the most highly engineered, closely monitored offhighway mobile equipment to be found anywhere in the world.

The sheer size of a late-generation, rigidbody mine hauler can overshadow its internal sophistication, and significant changes in design and performance may not be apparent to the untrained eye. Even in a mine environment, they may be viewed quite differently depending on the perspective: by the mine manager as a profit-or-loss machine, able to haul millions of tons of material annually but at a high cost for consumables, service and operator wages; by a mine engineer as a tool for progressing a mine plan; and by a maintenance supervisor as a source of pride, or headaches—or both.

One thing that is quite easy to see, however, is truck/shovel mining will remain a primary mining method until another approach can be made to match its flexibility at an acceptable cost. Another is that haulage fleet customers increasingly regard trucks as just one part of an integrated solution to their mining requirements rather than as individual pieces of a production puzzle—an important concept as both hardware and software suppliers inch their way toward the ultimate goal of autonomous operation.

In this article, E&MJ looks at some recent developments in the rigid-body haul truck sector.

Cat Plugs In, Fills a Gap
Caterpillar introduced the first version of its 797 hauler in the late 1990s, followed by capacity and power upgrades culminating in the 797F model unveiled at MINExpo 2008. With this legitimate competitor to Liebherr’s 400-ton-capacity, ultra-class T 282 B in place, Cat turned its attention to two seemingly unconnected truck initiatives: developing an AC-powered drivetrain to satisfy growing customer interest in an all-Cat, electric-drive haulage solution; and filling a payloadcapacity gap in the company’s product line between the 240-ton-capacity 793 and the 797. These efforts converged in a project, announced in 2006, that actually began a year or two earlier with electricdrivetrain testing on a modified 797 and led to prototype testing in 2008–2009 of a completely new truck—the AC-drive, 350-ton-payload 795. Although full commercial production of the 795F AC is still two years away, production units have been and will continue to filter into the field this year and next.

The first production units of the Cat 795F AC hauler will begin service at mines in Sweden (Boliden) and Chile (Codelco)
Powered by a 3,400-hp, 16-cylinder Cat C175 diesel engine connected to a Caterpillar proprietary AC-drive system, the 795F AC features new technologies throughout, including four-corner blended braking and retarding, using oil-immersed and cooled disc brakes as well as electrical retarding, that significantly improve wetroad handling and thus, operator confidence. A remote-mounted generator allows servicing without removing other major components, while wheel motors mounted inside the axle allow separate servicing of the final drives. The retarding grids are radial, designed to promote more uniform air flow for better reliability.

Over the past year or so, eight pre-production 795F ACs have been running in field-follow programs at four sites in North America involving coal, gold and copper operations. Two of the earliest evaluation units have been operating in a pilot program at Kennecott Utah Copper Corp.’s Bingham Canyon mine near Salt Lake City, Utah, USA—the first starting in late 2009 and the second in the spring of 2010.

During a recent tour of the huge mine— encompassing a pit width of 2.75 miles and depth of more than 0.75 mile, and considered to be the largest man-made excavation on Earth—E&MJ talked with mine managers about the current status and future prospects for the 107-year-old operation, and with Caterpillar support personnel involved in the 795F AC field-follow program in place there.

Tasked with moving enough material to keep the 150,000-t/d concentrator operating around the clock, Bingham Canyon’s haulage efforts are enormous—and are likely to grow even more in volume. Although the current life-of-mine plan to 2019 envisages a final pit depth 800 ft below the current level, if the recently announced Cornerstone project is given the final okay by KUCC’s owner, Rio Tinto, and receives approval of as many as 25 updated environmental permits, this massive pushback program would cut the southeast pit wall back another 1,000 ft and sink the pit by an additional 300 ft to reach 700 million tons of ore and extend mine life to 2028. The company is evaluating other options that could extend the mine’s life another 20 to 30 years beyond that.

The mine’s loading and haulage fleet currently comprises nine P&H 2800 XPB/C electric rope shovels, two hydraulic excavators, and 69 haul trucks including roughly equal numbers of Cat 793D and Komatsu 930E-1 haulers, along with eight Cat 793Cs and a few 785s. The average haul time is 35 minutes and maximum grade is 10%. KUCC uses a fleet of 12 Caterpillar graders to maintain the mine’s 500-plus miles of roads.

At the time of E&MJ’s visit to Bingham Canyon, one of the two Cat 795F AC trucks in service had racked up 5,156 hours between December 5, 2009, and October 4, 2011, hauling a cumulative total of 2,345,305 tons of payload for an average payload figure of 345.4 tons. During that time the truck completed 6,790 cycles at an average rate of 1.3 cycles per hour for a tons-per-hour rating of 455. The second 795F AC, between May 29–October 4, 2010, totaled 2,510 hours, with a cumulative payload total of 1,244,922 tons and average payload of almost exactly 350 tons.

John Bauler, Cat’s Large Mining Truck AC Drive product support supervisor, said the two trucks had become quite popular with Bingham Canyon’s operators, who felt comfortable driving loaded 795s on wet or snow-covered roads because of the truck’s “blended braking” system that integrates conventional electric retarding with the truck’s hydraulic service brakes. All four wheels are incorporated into the blended braking setup, which is selectable by the operator, and the oil-cooled, multi-disc brake system is basically the same as that used on the larger 797F haulers. The 795’s axial grid design also has dramatically reduced the noise level operators have typically been subjected to while in retardation mode, another aspect of the truck drivers appreciate.

Turning to maintenance, Bauler noted one of the most positive results of the 795s’ service experience at Bingham Canyon so far is that no major problems have been encountered with the truck’s proprietary AC drive system—just about all repairs needed have been for run-of-themill mechanical items. One of the mechanics from Wheeler Machinery, the local Caterpillar dealer that maintains the preproduction trucks, said the 795F AC was relatively easy to work on—“we just need larger tools than for the 793s”—and that the interface presented by Cat’s new in-cab Advisor display, which provides real-time machine performance and basic trip, maintenance and diagnostic data along with various machine parameters, makes troubleshooting and diagnostics much quicker and easier than before.

With the prospect of the Cornerstone pit pushback looming, accompanied by the necessity of raising the mine’s permitted annual volume of material moved per year from 197 million tons to 260 million tons, it’s likely KUCC will significantly expand its haulage fleet in the near future. Although mine management was understandably reluctant to comment on future procurement initiatives, Rio Tinto and Caterpillar did recently announce the renewal and expansion of a five-year agreement for supply of mining products and services, with the majority of equipment supplied by Cat expected to be large mining trucks, wheel loaders, bulldozers and road graders. In mid- June, Cat also announced it was planning to increase its 2011 build rate for 795F ACs by 40% to meet strong customer interest.

As 2010 draws to a close, five production- version 795F ACs were scheduled to roll off the assembly line, with two going to Boliden’s Aitik mine in Sweden, two more to Codelco’s Radimiro Tomic mine in Chile, and one as yet unassigned. Cat now expects to produce 15 795F ACs in 2011—with 14 of them currently assigned to specific customers—and plans to ramp up production to 75 units in 2012 and to full production in 2013.

The company also announced plans to produce pilot units of the 793F AC 240- ton-payload truck in early 2012.

Komatsu’s 360-ton-payload 960E-1K, shown here, and the 280-ton-capacity 860E-1K feature the
Komatsu “K Drive,” an AC drive system jointly developed by Komatsu and Siemens
Komatsu’s K-Drive Duo
Komatsu’s flagship electric-drive hauler, the 360-ton-payload 960E, began life as a clean-sheet design centered around a tougher frame and a state-of-the-art diesel engine. Introduced at MINExpo 2008, the 960E-1 was later upgraded to the -1K version with inclusion of Komatsu’s “K Drive” liquid-cooled, IGBT-based AC propulsion system, developed in cooperation with Siemens to provide more control, efficiency and performance flexibility. This system offers improvements in a number of truck performance parameters including torque capacity, top speed and traction control along with lower noise levels.

Prototype and pre-production versions were subjected to extensive field testing in three different types of mining applications before being introduced into the market. The 960E-1K with the highest number of operating hours—a test truck that ran for a total of five years in both coal and copper before being brought back to Komatsu’s testing grounds in Arizona—has more than 25,000 hours on the meter, according to the company. Currently, a fleet of 15 960E-1Ks is hauling overburden at a large coal mine in Wyoming’s Powder River Basin and another fleet of nine—soon to become 11—is at work in an eastern Australian coal mine.

Although the new -1K was officially handed off to Komatsu’s commercial sales organization some time ago, the company manages its new-truck introductions carefully, explained Don Lindell, product manager- mining trucks for Komatsu America. “In the past, it was common for us and our competitors to just open up the gates and begin selling a new product as quickly as possible. But we learned that you can run into big trouble if a new truck model, for example, begins showing a problem after 7,000–8,000 hours or so in a production environment.

“So, we now manage our introductions, pinpointing target markets, working initially with customers that have professional maintenance operations” that can support a new truck model, he noted. This policy is also being applied to sales of the 860E- 1K, the 280-ton-payload, AC-drive model that was developed in roughly the same time frame as its larger sibling.

The Komatsu 860E-1K and the 960E-1K were both designed to be easily compatible with trolley-assist systems.
The 960E-1K’s tougher frame is the latest result of an ongoing design effort within Komatsu to beef up the frames on all of its mining-class trucks, said Lindell, and it’s one facet of the company’s competitive pitch emphasizing truck reliability and fleet availability. He said although Komatsu doesn’t currently offer a 400- ton-payload model, it’s quite comfortable with its current lineup: “Our motto is ‘360 tons on the road beats 400 tons in the shop.’ We’re very confident in our overall truck fleet availability performance—and we have to be, because we don’t provide backup or replacement trucks.”

The 960E-1K is powered by an 18- cylinder SSDA18V170 diesel engine built by the Industrial Power Alliance (IPA) joint venture between Komatsu and Cummins. The Tier 4/EU Stage III-compliant engine, rated at 3,500 gross horsepower (2,610 kW), benefits from two-stage turbocharging and is protected by a standard pre-lube system that minimizes start-up wear and tear. A 6,196-hp (4,620-kW) retarding system allows the driver to operate in “cruise control” mode, keeping truck speed on loaded downhill hauls within desired limits without utilizing the service brake system. A new low-speed, high-volume squirrelcage type grid blower significantly reduces noise during retardation.

Other features include an anti-rollback system that makes stopping and starting on grade much easier on the operator, said Lindell. “The service brake and drive system are integrated into this feature, which engages when the truck reaches zero velocity. The system keeps the truck stationary and only disengages when the driver pushes the accelerator pedal and enough torque is generated to move the truck forward. Drivers like it because there’s no rollback or jerking.”

Both K-Drive trucks were designed from the start to operate with trolley assist. A fleet of 29, 860E-1Ks is currently working in a trolley-assisted haulage setup at Kumba Iron Ore’s Sishen mine in Northern Cape, South Africa, one of the largest open-pit mines in the world.

Lindell predicts a “new renaissance” for trolley assist based on AC drive systems. “If you have even a medium-length haul, you can save 70% on fuel. Engine life goes up, the amount of carbon you put into the air goes down and it appears to be a no-brainer.

“But it’s not enough to build trolley capability into the trucks,” Lindell said. “You have to find a way to get past the mindset of mine engineers that trolley-assist is difficult, expensive and scary. We’ve been working with Siemens to put together a trolley package that incorporates new, simplified transformer designs and other features that allow it to be implemented in stages, for example, and because the components are easily movable, there’s a lot more flexibility without excessive costs.”

Lindell thinks Komatsu is on the right path. “Over the past year or so, we’ve seen a considerable increase in the number of tenders that request at least a trolley-assist overview.”

On a smaller, but no less important, scale, Lindell said Komatsu has been paying close attention to recommendations drawn from its ongoing participation in EMESRT (Earth Moving Equipment Safety Round Table)—an advisory group that brings together representatives from major global mining companies and mobileequipment OEMs—about how to incorporate safety features into a machine’s basic design package. “We’ve done a number of things on the K-Drive trucks based on feedback from EMESRT,” he said. “These range from narrowing the gaps between decks to eliminate tripping hazards, to using standard dimpled metal deck plates instead of covering them with materials that might get knocked off or lifted the first time the truck goes through a power washer. Because access ladders are quite possibly the most dangerous items on a truck from a personal injury standpoint, we’ve changed a number of details there, from ladder tread patterns to stair angles. We’ve even increased the diameter of the handrails.

“This philosophy carries through to changing how the brake and drive system interlock works, and adding the anti-rollback feature. But we can take it much further than that. Because of our close relationship with Modular Mining Systems (a provider of haulage optimization, monitoring and machinehealth system solutions), we’re working on incorporating collision-avoidance into the fleet itself. What each truck sees around it is important, but when you can expand this capability mine-wide, it takes the concept to a whole different level of safety.”

The 100-ton-capacity, mechanical-drive Komatsu HD785-7 features a variable horsepower control system that
automatically tailors engine output to current conditions, along with a skip-shift transmission function that allows
direct shifting to the appropriate gear for the grade, eliminating multiple shifts and the accompanying jolting that
can fatigue operators and increase load spillage.
Not all of Komatsu’s truck technology has been concentrated in the high-payload end of its mining truck line; the company’s HD785-7, introduced several years ago as an upgrade to the HD785-5 which entered the market in 1997, was designed with versatility in mind, explained Rich Smith, product manager-mechanical drive mining equipment, for Komatsu America. The 100-ton-payload HD785-7 has been used in a number of coal and iron ore operations as well as in quarry applications.

The mechanical-drive -7 offers 10% more horsepower than its predecessor and also features Variable Horsepower Control (VHPC). With VHPC, two operating modes are available to the operator: Power and Economy, either one selectable according to current working conditions. In either mode, the system detects whether the truck is loaded or empty and selects an optimum horsepower setting that can vary by as much as 19% from the engine’s maximum 1,200- hp (895-kW) output. The truck’s seven-forward- speed transmission also provides two reverse speeds, with the higher speed reverse gear useful in some mining applications that involve extended backup distances.

Additional horsepower-saving capabilities have been incorporated into the design through changes to the hydraulic system configuration, with a variable relief-pressure feature optimizing transmission oil pressure and flow depending on torque requirements. Combined, the hydraulic upgrades can cut fuel consumption by up to a gallon and a half per hour, according to Smith.

In the same design vein, a skip-shift function uses built-in inclinometers to sense the grade angle on which the truck is traveling and shifts to the appropriate gear directly, without “hunting” or going through a series of gear changes that jar the operator and payload. On loaded downhill hauls, the truck’s pushbuttonoperated, oil-cooled retarder system applies braking to all four wheels, not just the rear two, which prevents rear-wheel locking and the forward-pitching motion that can be encountered with rear-wheelonly retarder systems. The service brakes are oil-cooled wet units, operating by a fully hydraulic brake control system.

The most recent features to be added to the HD785-7 include a front-mounted, diagonal access ladder and a cameraassisted rearview monitor system.

Liebherr’s Mission: Cut Weight, Increase Payload
At the bauma 2010 trade show held earlier this year in Munich, Germany, Liebherr introduced its T 282 C ultra-class hauler. Major upgrades to the C series include an improved frame design and integration of the Litronic Plus drive system, designed and built by Liebherr. According to the company, the new T 282 C’s frame is unique, employing strategically located castings in high stress areas to minimize the empty vehicle weight of the truck and maximize its payload and production potential.

Liebherr’s flagship hauler is the 400-ton-payload T 282 C, introduced at the bauma 2010 trade show.
This design follows Liebherr’s load management design philosophy of maintaining lowest possible empty vehicle weight to optimize payload and minimize cost per ton. “With an optimized distribution of stress load, a reduced chassis weight from the previous generation frame and no compromise in durability, the T 282 C frame is designed for reliability,” said Bernd Vorhoelter, executive vice president of truck manufacturing.

A redesigned axle box is also new on the T 282 C, featuring two service doors, improved cable routing, vertical linkage to the frame rails and greater air flow across the electric drive motors and service brakes.

According to Vorhoelter, Liebherr has made a decision to vertically integrate its truck systems, a policy it refers to as Liebherr Vertical Integration (LVI). “With LVI, Liebherr now enjoys the capability to deploy drive systems on our mining trucks that are specifically designed for the mining truck application,” said Vorhoelter. “In the past, truck drive systems have typically been taken from other industries and applied to the mining truck application. This limits flexibility in design when trying to adapt to the mining environment, as well as to deploy changes to meet specific application requirements.”

He explained the LVI philosophy incorporates proprietary truck components, specifically developed to serve the needs of the mining industry. By retaining control of all drive system components, innovative design solutions can be developed within the Liebherr group to accommodate operations at high altitudes, as well as in high ambient temperatures or other challenging conditions. Specific areas in which Liebherr- designed-and-built components will be used include the front wheels, front and rear suspensions, and steering cylinders. “It is our intention to continue down the path of LVI, and expand this list to include more components in the future. Long term product development targets are currently being formulated for both smaller and larger trucks as well as for advanced technology mining solutions,” said Vorhoelter.

The T 282 C’s new axle box provides two service doors, improved cable routing and better airflow.
He also noted the development of even larger haul trucks than current ultra-class models will require new classes of tires and engines to achieve the desired performance, but Liebherr’s TI design concept shows great promise for a higher rated payload truck due to its load management design and reduced empty vehicle weight. “There is potential that this truck design concept could hold the key toward the 500 ton truck, yet only time and extensive field testing will tell,” Vorhoelter said.

According to Liebherr, the TI design allows its TI 274 to weigh 10 tons more, yet haul 60 tons more payload, than its chief competitor in the 240-short-ton payload class. The TI concept uses the dump body as a structural member to significantly reduce frame weight. The dump body does not rest on the frame, just on the hoist cylinders and rear suspension. “By resting on only four points the frame does not have to carry the dump body and payload directly, and can be much lighter,” Vorhoelter said. “This achieves a payload to empty vehicle weight ratio greater than any other truck.”

The rear suspensions are directly above two split axles, another significant difference in the TI concept vs. conventional mining truck design. With this approach there is no axle box and the wheels have wider spacing which allows them to oscillate as the truck traverses uneven ground without one set impacting the other set. Each rear wheel is controlled by an independent AC wheel motor. By allowing each wheel to rotate at different speeds, depending on traction requirements, truck performance and safety is significantly improved in wet conditions.

In North America, Liebherr’s customers are primarily associated with oil sands, copper, coal and gold. “We recently received a large order from Peabody Energy, mining coal in Gillette, Wyoming, involving the delivery of 32 units through December 2011 with potential for many more in the following years,” said Bernd Hasse, executive vice president of marketing, Liebher Mining Equipment Co.

The Peabody operation is the initial site from which Liebherr will launch the first fleet of T 282 C production units. These units will be evaluated by Peabody for availability performance, which could determine future orders for its operations in Australia.

Liebherr’s Nevada branch, located in Elko, supports a fleet of 24, T 282 B trucks at Barrick’s Cortez Hills mine site. “Barrick is an important customer and we often use the Cortez Hills installed base to evaluate our performance as it could relate to other future projects planned by Barrick,” Janka said. “One project in particular is the Cerro Casale project in Chile.”

Hitachi’s newest hauler, the 240-ton-capacity EH4000ACII, joins the 185-ton EH3500ACII and 320-ton
EH5000ACII in the company's AC-drive truck lineup.
In the southwestern U.S., Liebherr will be supporting a fleet of 17, T 282 B mining trucks by year end 2010. The undisclosed customer, according to Liebherr, has identified cost benefits of operating ultra-class trucks and is in the process of replacing its fleet of smaller haulers. This application is a deep pit with high ambient temperatures and required special features to meet the required performance. Liebherr plans to deliver four more units in 2011 to keep pace with the mine’s production schedule.

“In South America, we have deployed equipment primarily in copper and iron ore mines,” said Hasse. “We are established in Chile, and are expanding in Brazil with hopes to expand further in Peru targeting copper mines at high altitude.” He said Liebherr is also giving serious thought to eventually manufacturing trucks at a facility in Guaratinguetá, Brazil, due to growing demand for equipment in iron ore.

Over the next five years, Liebherr plans to invest more than $20 million at its facility in Newport News, Virginia, USA. “Our target goal is to double our manufacturing capacity by 2012,” said Joachim Janka, president, Liebherr Mining Equipment. The plant currently averages one haul truck per week.

Janka said Liebherr has updated certain plant processes for greater efficiency. For example, in the past it would completely assemble and test each truck before disassembling it for transport. “We have now incorporated a process we refer to as “semiknockdown” or SKD, which reduces the time we spend on final assembly and test,” Janka said. “We no longer fully assemble the truck but capitalize on testing individual modules, and eliminate redundant testing which in the end provided little valueadded to our customers.”

Hitachi Unveils its 240-ton AC Hauler
The newest mining-class hauler to enter the market is Hitachi Construction Machinery’s EH4000ACII, a 240-ton-payload class, AC-powered unit that replaces the company’s EH4000 DC-drive version. Both the new 240-ton model and Hitachi’s 200-toncapacity EH3500ACII are built in Japan at the same factory in which the company’s larger hydraulic excavators are fabricated. Brian Mace, manager of mining products and applications for Hitachi North America, sees opportunities for systems and design synergies in this arrangement, which also provides quicker access to port and shipping facilities than the former EH4000 assembly plant in Guelph, Ontario, Canada.

Establishing a market share in a payload class as tough and competitive as the 240-ton range is no small task, but Hitachi believes the EH4000ACII offers features and performance that will make it attractive to buyers, and early attention to the new truck from at least one undisclosed potential customer interested in obtaining a large haulage fleet seems to bear this out, according to Mace. Its November introduction to the commercial market follows testing over a three-year period at Hitachi’s proving grounds in Japan and roughly a year of field-test service involving several pre-production units at a mining contractor in eastern Australia.

Hitachi claims a wealth of expertise in electric-drive systems, drawing upon many years of experience in designing and building AC-drive, diesel-electric locomotives— and also claims to be the only OEM that supplies every component of the AC system itself, ranging from alternator and wheel motors to IGBT inverters. Features on the EH4000ACII that are now considered must-haves in this truck class include one-pedal braking—with the AC system’s retarder capabilities controlling truck speed automatically, down to zero velocity at which time the retarder is blended with the service brakes to bring the truck to a smooth stop; cruise-control-type speed selection; and an anti-rollback system to enable smooth starts on grade. The electric- drive system is coupled with a 2,500- hp (1,864-kW) Cummins QSKTA60-CE Tier 2-compliant diesel engine, and can be equipped with trolley-assist components if desired, according to Hitachi. The Cummins engine is basically the same as that used in Hitachi’s EX3600-6 and EX8000-6 hydraulic excavators.

Inside the cab, the truck’s new Hitachidesigned electronic systems controller enables machine information to be displayed on a single LCD monitor that replaces conventional gauges and indicator lights. This display—officially named the Machine Information Center and similar in function to that currently used on Hitachi’s EX-6 Series mining excavators—allows quick troubleshooting and diagnosis of problems, including the truck’s AC-drive system. It is also available on the EH3500ACII and will become a standard feature on all Hitachi mining truck models in the near future. Also new is a load-monitoring system with optional external display board.

A centralized service center provides access for topping off coolant, grease, hydraulic oil and engine oil via optional fast-fill couplers. One of the major maintenance features of the new truck, and a totally new approach for Hitachi, said Mace, is inclusion of a bolted high-arch member which enables this assembly to be removed and replaced without disturbing the truck’s front suspension, allowing much quicker assembly and repair times than required with a conventionally welded component.

Mace noted studies of both this model and EH3500ACII indicate noticeably higher speeds, allowing for quicker cycle times. Hitachi also believes the EH4000ACII will be a strong competitor against mechanicaldrive trucks in this weight class, particularly in applications requiring long downhill hauls where the truck’s auto retarding capability could provide a performance and safety edge. As would be expected, it passmatches well with several of the company’s hydraulic shovels, requiring six passes from an EX3600-6, four to five passes from an EX5500-6 and three passes from an EX8000-6.

A 205-ton-capacity body is lowered into position during assembly of a Bucyrus MT3700AC haul truck recently
delivered to a gold mine in southern California, USA. This and a second truck ordered by the mine were the
first to carry the Bucyrus logo and paint scheme following its acquisition of the Terex product line.
Bucyrus Gears up for Market Share Growth
Bucyrus International announced in late December 2009 it had signed a definitive agreement to acquire the mining equipment business of Terex Corp. for $1.3 billion. Included in the deal was the Unit Rig haul truck line manufactured in Acuna, Mexico, which represented about 20% of Terex Mining’s revenue in 2009. During the announcement of the acquisition, Bucyrus CEO Tim Sullivan said, “Terex Mining has invested a significant amount of money upgrading the haul truck line. Prototypes are now running in the oil sands and showing good results. The Terex haul truck in general is well-built and very well-positioned.

“Where they have had issues is having the infrastructure to support the trucks in the marketplace and that is something that Bucyrus will bring to the table. We also have alliance agreements with multinational mining companies and that should improve market share,” he said.

In the months following the acquisition, Bucyrus has been mostly quiet about its plans for its new truck line. It did announce in late summer it had commissioned the first of two new MT3700AC haulers at New Gold’s Mesquite gold mine in Imperial Country, California. According to Bucyrus, these 205-ton-payload haulers were the first to be delivered in the United States following the Terex acquisition and were also the first to display the Bucyrus logo and paint scheme. The MT3700ACs are powered by an MTU 16V4000 diesel rated at 2,500 hp (1,864-kW), combined with General Electric AC drive components.

In addition to the MT3700AC model, the Bucyrus truck line includes the 150- ton-capacity, 1,875-hp (1,193-kW) MT3300AC; the 240-ton, 2,700-hp (2,014-kW) MT4400AC; the 360-ton, 2,700-hp MT5500AC; and the 400-ton, 3,750-hp (2,796-kW) MT6300AC.

During a conference call with investment analysts October 22, 2010, Sullivan provided some additional information on customer interest in the overall Terex line and also on Bucyrus’ near-term plans for the truck line. Noting that recent quoterequest activity has picked up considerably— and that a large portion of this activity was for the type of products included in the Terex acquisition; i.e., hydraulic excavators, surface drills and trucks—Sullivan attributed customer interest in this type of equipment to the fact that the major mining companies continue to depend heavily on contractors for both overburden and ore removal at a number of operations, thus shifting focus to buying new or replacing existing smaller shovels, drills and trucks rather than Bucyrus’ legacy rope-shovels and draglines. This trend is particularly evident in Australia, said Sullivan, where contractors traditionally fill important roles at many large operations.

However, Sullivan added, Bucyrus expects increases in 2011 capex spending from the “Big Five” global mining companies will eventually result in new equipment orders, and intends to ramp up its own capex funding in 2011 to support, in particular, its plans for strengthening the Terex lines. “Obviously, we’re new to the truck business and have several strong competitors, but we believe we can establish a meaningful market share,” Sullivan said. “Once we reach the maximum number of units we can build per year at the Acuna plant, we’re prepared to spend money on capacity expansion—and the way things are going, that could happen next year.

“We basically started from zero at that plant when we acquired it in February,” he said. “The previous owners were building trucks to-order only, and you really can’t succeed that way—you have to anticipate the market. We have a lot of people on the ground and we plan to apply our market intelligence to the truck business in the same manner as we do to our legacy products.

“Our people have been able to ramp up production significantly in the second half of 2010,” he said, and Bucyrus anticipates reaching the plant’s current production capacity—roughly 150 to 175 trucks per year—in 2011. “That’s inadequate for what we think we can do as far as order placement. The good news is that we have plenty of land around the plant, and we won’t have to spend a huge amount of capital to increase capacity.”

As featured in Womp 2010 Vol 09 - www.womp-int.com