Emeco moves into Chilean mining market
12 March 2012
Australian mining equipment rental company Emeco is to move into Chile this summer, its first involvement in the Latin American mining market.
The company has committed A$50 million in investment for the new venture, comprising 10 new 240 t trucks plus ancillary equipment, and said the first five machines will be working soon after June with the balance towards the end of this year.
Ameco's managing director and CEO, Keith Gordon, said the copper-gold market in Chile was very attractive to Emeco; "The region is experiencing significant mining volumes today and the forecast growth in volumes over the next five years represents a great opportunity for the business.
"We believe we can build a sustainable business in Chile given that the majority of mines in the region operate towards the lower end of the global cost curve."
Emeco's revenues are generated in Australia, Indonesia and Canada. Mr Gordon said the move into Chile "provides commodity and market diversification benefits. Chile is a logical extension of our business which sits comfortably within our strategy."
He added in a briefing that Emeco was "confident" that it would secure contracts for the fleet based on discussions it had held with a broad section of the market.
The Chilean business will be managed by Ian Testrow, current president of Emeco's North American operations, whose role has been expanded to include South America.
Meanwhile, the company reported a 7.7% increase in revenues to A$273.0 million for the six months to 31 December - the first half of its financial year. Operating profits were flat at A$29.2 million.
Emeco said demand for large mining equipment remained strong during the half year, particularly in Australia, and said it expected a good performance in all three regions in the second half of its fiscal year.