Atlas Copco, Sandvik Chiefs Signal End to Mining-Equipment Woes – Mining Life

Jul 22, 2014

Upbeat comments from Swedish mining-equipment makers Atlas Copco AB (ATCOA) and Sandvik AB (SAND) may be an early sign of a recovery for a business that’s been in a two-year decline as customers postponed investments amid slumping commodity prices.

“The downward pressure that we have experienced for quite some time is not there in the same way,” Sandvik Chief Executive Officer Olof Faxander said on a conference call with journalists yesterday. “There is stability at the current level, and that is a positive change.”

Faxander’s comments echo those of Ronnie Leten, CEO of Stockholm crosstown rival Atlas Copco, who said on July 16 he’s seen an improvement in demand for mining products late in the second quarter.

After a surge in mining investments, fueled by a decade-long boom in metal prices, BHP Billiton Plc (BLT), Rio Tinto Plc (RIO) and Vale SA (VALE3) are cutting investments, favoring cash handouts to shareholders instead. BHP, the world’s largest mining company, expects spending on new projects and exploration to have been $16.1 billion in fiscal 2014, 25 percent lower than in the previous year, and Rio Tinto last year lowered its capital expenditure by 26 percent to $12.9 billion.