The rise of the (robot) autonomous fleets has triggered a new wave of rise in financing options by suppliers who are leveraging depth knowledge of the mining and business opportunities, challenges, seasonal and cash-flow constraints many companies face.
Most suppliers are coming up with flexible and tailored finance solutions and repayment structures to meet these requirements. Cat Mining Finance, the financing arm of leading mining OEM Caterpillar, says it sees increasing demand for tailored finance solutions from mining companies, with this flexibility often proving decisive when it comes to winning business.
“It is a great advantage that we offer a total solution to customers. We are able to work seamlessly with Caterpillar and the dealers to get a transaction closed. It demonstrates to our customers that we have risk alongside them in their business in support of Caterpillar equipment over the long term,” Bob Bennes, Vice President with responsibility for Cat Mining Finance, revealed this recently. “However, it goes even further than equipment and financing. Post close, customer support across the Caterpillar enterprise is critical and helps provide varying levels of maintenance and repair support depending on the mine’s requirements. The financing and support after the sale are important to winning business in the mining industry.”
In the last decade or so, there has been a big change in the way mining companies source equipment for new and existing operations, with finance, leasing and rental now major parts of the system. “If you have a look at the growth rate for customer finance, it has grown substantially,” says Björn van den Berg, Director Customer Finance, Sandvik Mining & Rock Technology “There are two underlying trends here. One is we see increased usage of contractors in mining, with contractors having a totally different cash position to producing mines. That’s one of the reasons why we see increased demand for different types of finance options – a trend we have seen occurring over a longer period of time,” he said.
With a lot of small players getting into the mining technology frontier, it remains to be seen how well-established OEM’s will strategically place themselves by forming synergies with these thereby yielding more value in the way digital transformation is taking place.