Mining boom: how manufacturers can take advantage

WHILE major resources projects provide significant opportunities for Australian manufacturers, many companies are still missing out because of established global vendor lists, the trend towards pre-assembled modules, and not being proactive enough. 

Getting a bigger piece of the action can be a challenging process, but there are a number of state and federal organisations available to help.

For example, hidden away in this year’s federal budget was a $34.4 million ‘Buy Australian at Home and Abroad’ initiative designed to give Australian manufacturers a better chance of benefiting from the nation’s major resources projects. 

Industry minister, Senator Kim Carr, said this new initiative will ensure Australian manufacturers and service providers know where the opportunities are.

“New Enterprise Connect Business Advisers will work directly with small companies to help them grow as suppliers to the resources sector. They will partner with new industry Supplier Advocates to embed Australian business in the resources sector supply chains,” he said. 

“The Government will also ensure that buyers understand the strength of the local manufacturing and service sectors. Through the Industry Capability Network (ICN), specialist advisers will work with the procurement teams of major projects like the Woodside Browse LNG development in Western Australia, the INPEX Ichthys project in Northern Territory, and LNG projects in Queensland. 

“Increased funding of $1 million per annum will expand the reach of the ICN’s vital work, making it easier and cheaper for buyers and suppliers to do business.” 


Think global

Ian Cairns from the Australian Steel Institute (ASI) told Manufacturers’ Monthly that its members are often frustrated with the mining giants, saying the increase in imported fabricated steel, for example, is a major issue for the association’s members, especially in Western Australia and Queensland.

“The steel fabrication and heavy engineering sectors are struggling and in danger of disappearing. Their share of the steel industry and heavy engineering local content in major projects in Australia has reduced significantly over the past two years, now less than 10%, with much of the work being imported from China and other parts of Asia,” Cairns said.

But, as Linus O’Brien, ICN’s WA Manager explains, the days of exclusive tendering in the domestic market are well gone.

“Quite often we are now seeing packages that are being tendered globally and while it is disappointing, local manufacturers are certainly getting more exposure to global supply chains,” O’Brien told Manufacturers’ Monthly.

“With BHP Billiton and Rio Tinto getting back online with their projects, suppliers should endeavour to get in contact with the major engineering groups that are working on their projects.”

However, O’Brien warns, manufacturers must be aware that the level of quality and certification required in certain areas is much higher. 

“The oil and gas sector, like the mining sector, has high demands of safety,” he said.

O’Brien advises manufacturers to register with ICN’s Gateway as a first step. Being proactive also doesn’t hurt.

“As part of our vendor ID service, we research the Australian market. If an Australian supplier has the capability for a package, and they know all the constraints, we will try to get them to the starting line. By that I mean expression of interest, pre-qual leading to tender, and then it’s over to the company.

“Putting up an expression of interest is fine, but they should also invite them to their factory to show what they can do. Its pretty basic business development stuff really. 


Getting past the bouncers

John Coyle from NSW’s HunterNet says the mining sector is not a closed shop, but admits it does run in its own particular way. 

“You need to be in the tent, if you are going to do any good,” Coyle told Manufacturers’ Monthly;

HunterNet works as a collective body, identifying opportunities for its 180 members.

“We can get into a mining company’s supply chain, have a look and feed that information back to our members. That’s our approach, with the assistance of Enterprise Connect,” he said.

Coyle admits local manufacturers are challenged by the high Australian dollar, but says there are opportunities out there.

“One of our key advantages is speed to market, plus we have to be innovative and identify niche opportunities, and give top service,” he said.

“Quality assurance is an important area for mining companies; people should get back into that game a bit more, if they are really serious about it.”

Coyle says the biggest opportunity for Australian manufacturers is in the technology and carbon reduction area. 

“This is real issue for us in the Hunter, we have a very carbon-dependent manufacturing/engineering base here with electricity generation, smelting and mining so we see opportunities in OH&S, environmental and carbon management and in green energy. Those are areas where we can shine,” he said.

“True life support is another opportunity, and companies often get a better return in this area than when they are actually making the product”.


Success story

One manufacturer who recognised an opportunity in the mining industry a decade ago was J. Smith & Sons, a family-owned, Australian business operating in Gympie, Queensland. Joel McEnery, the company’s technical documentation officer, said the firm’s Hydrapede project was inspired by a noticeable gap in the mine haulage equipment market in 2000. 

“The increasing incidence of satellite mines across Australia increases the necessity for vehicles that are capable of hauling large amounts of resource over long distances,” he said. 

“It was noted that few alternatives to standard rear dump mining trucks existed. Resultantly, the mining industry was limited to using vehicles with wide bodies which demand larger, more expensive road infrastructure and maintenance regimes; and short distance haulage capabilities due to large tyres. 

“The Smith Hydrapede has been designed to provide a solution to these limitations and additionally, to provide increased payload and faster average haulage speeds,” McEnery said. 

The latest Mk4 Hydrapede Dolly units have been successfully commissioned at the West Turner Syncline Mine in Western Australia and took out the Australian Steel Innovation category in this magazine’s 2011 Endeavour Awards. 


AIMEX 2011

AIMEX (Asia-Pacific’s International Mining Exhibition) 2011 will provide a major opportunity for Australia’s manufacturers, fabricators and machine shops to get involved with the mining industry.

To be held at Sydney’s Olympic Park, Homebush on 6–9 September, AIMEX 2011 will be the largest mining exhibition ever held in Australia, with more than 550 exhibiting companies, covering more than 45,0002m.

“It will be unique gathering in a single location of mining products and services from around Australia and throughout the world – and will offer manufacturers, machine shops, fabricators and other local service providers some unique insights into mining industry opportunities,” said Reed Exhibitions AIMEX exhibition director, Paul Baker.

“We are strongly encouraging manufacturing sector companies looking to take advantage of this once-in-a-generation mining boom to come along to AIMEX in September, meet with mining industry end-users and take advantage of the many networking opportunities that an event like this offers.” 

One manufacturer taking advantage of the mining boom is gear units specialist, SEW-Eurodrive, which will be exhibiting at AIMEX with a range of helical, bevel helical, planetary and extended bearing distance configurations, with torque ranges up to 475kNm, destined for conveying applications for the mining industry.


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