Emeco invests A$165 million in mining fleet

Australian heavy mining equipment renter Emeco is to invest A$165 million (€122 million) in the current year on new and used equipment as part of its organic growth strategy.

The investment - comprising A$85 million in new equipment and A$80 million in used machines sourced from Europe and South Africa - will be split between its Australian and Canadian operations, with Australia taking 56% of the funds.

Emeco's chief executive officer, Keith Gordon, said "We continue to observe high levels of mining activity in Australia, Canada and Indonesia which is translating into demand for Emeco's rental offering...

"Given the healthy outlook for mining volumes, we are investing in large mining equipment to meet growing demand from our customers. This equipment, which comprises new and used machines, has been secured through our global procurement capability and will be put to work over the course of financial year 2012."

The equipment comprises large mining truck and excavator fleets suitable for coal, iron ore, gold and oil sands production.

The company is seeing good demand for its equipment, with group utilisation expected to average approximately 83% in the second half of 2011 compared to 88% in the first half. Emeco said the lower utilisation in the second half is expected because of the seasonal thaw in Canada and an extended wet season in Queensland, Australia.

Mr Gordon said; "enquiry levels for our fleet remain high which reflects the strong activity levels we are currently observing and underlines the strong outlook for all three of our markets."

The announcement of the new investment in fleet follows a period of restructuring at the company during which it exited the European and US markets and retreated from renting equipment to the civil construction sector. It is now focused on the mining and quarrying sector in Australia, Indonesia and Canada.