China’s mining equipment OEMs prepare to fulfil the hopes of global Tier 1 miners
IM Editorial Director Paul Moore is in China at the beginning of a country-wide tour covering three leading equipment OEMs, one major OEM-agnostic AHS technology player and three mining operations. The visit kicked off with a day in Xuzhou with XCMG, just a few days after a BHP delegation departed after signing a new global framework agreement with the company.
This is IM’s first China tour since 2019, when we visited SANY in Shenyang, CITIC HIC in Luoyang, Liugong in Liuzhou, TYHI in Taiyuan and NHL in Baotou. And the attitude towards Chinese OEMs from major mining houses has most definitely shifted since then. Whereas in the past, with a few exceptions, the Tier 1 players might have had no Chinese equipment at all, or just a few ancillary machines for maintenance or infrastructure work, this is already changing. Yes there’s a good number of Chinese mining equipment units out there outside of China but it tends to have been operated at sites owned by Chinese mining groups or financed by Chinese investment.
Taking XCMG, developments such as its landmark recent agreement with BHP, its in progress delivery of a fleet of large mining trucks to Rio Tinto’s Simandou iron ore project in Guinea, as well as its US$400 million contract with Fortescue for a range of battery electric machines show a real change in the depth of engagement and cooperation with the top miners. And XCMG is not alone – Tonly for example is working with Rio Tinto on a trial project at Oyu Tolgoi in a trial with wide body battery trucks using battery swapping.
Visits by mining group engineering and procurement teams to China are also now much more commonplace – both to the OEM factories themselves and to shows like bauma China. This reflects a clear will to get to know the Chinese OEMs better and to understand them better.
From an IM point of view on the ground in China, there are a number of factors in why the atmosphere has changed. By far the most important one is that today, China is leading the innovation, not trying to replicate what the Western players like Caterpillar and Komatsu are doing which may have been true in the past. Wide body trucks are a good example – proven at scale they can carry a higher payload in relation to their size which means increased productivity. Then compared to the traditional two axle rigid mining truck, they are much more economical to run, with a very competitive initial cost as well as low ongoing maintenance costs.
But this innovation applies particularly in green energy solutions for mining equipment. Battery and hybrid wide body mining trucks are running today in China in their thousands, with the battery trucks recharged both by plug in charging and battery swapping. They have been proven in challenging climates and conditions like Inner Mongolia. Chinese OEMs have also developed mining trucks to operate on other fuels like methanol, ethanol and LNG.
The Chinese battery cell suppliers like BYD and CATL are far ahead in terms of energy density and industrial scale-up – and are working closely with the Chinese equipment companies. Today, IM toured the XCMG Power battery pack production line, with lithium iron phosphate cells supplied by BYD’s factory, also in Xuzhou. Going forward, different BYD battery packs will enable different drive configurations – such as hybrid drives or short charging times.
After green energy, the next point is OEM-agnostic and AI-enabled autonomy. While that is a fast developing market outside of China as well, within China, it is much more mature – EACON Mining, who IM is visiting with next week, is the best example – last year it passed the milestone of over 800 autonomous mining trucks running with its ORCASTRA system, and this includes all the major Chinese mining truck OEMs with which it is working closely. ORCASTRA has shown its ability to navigate complex intersections, traffic flow, and navigation rules in mining at a large scale. In Australia, EACON is already working together with Thiess, the world’s largest mining contractor. And many of EACON’s autonomous trucks are also battery or hybrid models.
A good example of innovation spanning autonomy and green energy is the entry into production of a fleet of 100 battery electric, cabless unmanned mining trucks at the Yimin coal mine in Inner Mongolia – the result of a partnership including the customer China Huaneng, Huawei supplying a 5G-A network and autonomous driving technology, plus XCMG delivering the cabless battery truck.
Another factor is capability and flexibility from a scale and engineering point of view. Companies like XCMG have vast engineering teams and R&D departments staffed by doctorate level professionals that are working with the mining majors to tailor solutions to their needs in core areas like hydraulics, brakes, frame, suspension etc. Rio Tinto and XCMG have already worked together closely on development of large mining graders for years, culminating in the GR5505 model. Plus the major Chinese factories are equipped with the latest technology – for example all robotic welding. And the quality of available speciality and high strength steels in China is very high. Not just that, the factories are huge in scale without facing the challenges of long lead times, with multiple shipping options from some of the world’s largest ports like Tianjin and Shanghai.
The attraction of China as a manufacturing hub has already been recognised for years by the Western OEMs – most of them have had a major presence in the country themselves for years through joint ventures, dealerships or fully owned companies, though the reality is that these have primarily been focused on meeting internal Chinese demand and on the whole they have been construction equipment led.
So, we are definitely entering a new era of Chinese OEM involvement at the top end of the mining market. But of course it isn’t that simple. There is no doubt that the equipment from Caterpillar, Komatsu, Hitachi, Liebherr and others has been proven over decades to very high levels of performance and availability in state of the art mines using very refined planning and scheduling strategies. Especially for the big rigid mining trucks, Caterpillar Command for hauling and Komatsu Frontrunner are yet to be challenged from an autonomy point of view. In larger class mining truck and excavator fleets, Chinese OEMs have yet to prove their performance capabilities at any scale at Tier 1 mines outside of China – and even then to also achieve parity in critical areas like service and maintenance support. But the door is now wide open, and progress is likely to be rapid.
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