Mining and Oil & Gas Machinery Manufacturers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 700 mining and oil and gas machinery manufacturers in the US produce machinery used in the exploration and extraction of minerals and petroleum resources. Machinery may be highly specialized to perform a specific task or made more versatile by equipping them with various attachments. Many firms in this industry have an international presence or compete with foreign firms in their domestic market.

Dependence on Oil & Gas Production

The number of new oil and gas wells drilled and their productivity and longevity drive demand for machinery, sales of parts and attachments, and service revenue.

Fewer Coal Mines, Less Output

The number of coal mines in the US has been on a decline, reducing equipment sales opportunities for mining machinery manufacturers.

Industry size & Structure

A typical manufacturer of mining and oil and gas machinery operates out of a single location, employs 75 workers, and generates about $22 million annually.

    • The mining and oil and gas machinery manufacturing industry consists of about 700 companies that employ about 53,300 workers and generate $15.8 billion annually.
    • The heavy machinery segment is dominated by large, technologically-advanced firms with broad market reach. Not only do these large firms produce a wide range of products, but most have international operations and extensive dealer networks.
    • The mining machinery segment of the industry is concentrated with the 20 largest firms representing 75% of its revenue. The oil and gas machinery segment is slightly less concentrated with the 20 largest firms representing 66% of its revenue.
    • The aftermarket segment, which includes replacement parts, attachments, service, and refurbishment, is fragmented with many smaller firms competing based on price, breadth of products, and proximity to customers. Mining and oil and gas machinery manufacturers may partner with aftermarket suppliers to obtain parts and attachments and broaden their equipment options.
    • Large companies with US manufacturing operations include Caterpillar, Komatsu Mining (P&H, Joy, Montabert), Epiroc, Boart Longyear. and TMG Manufacturing.
    • The industry competes domestically and internationally with foreign-based manufacturers including Terex, Sandvik, XCMG, Sany, and Metso Minerals.
                                  Industry Forecast
                                  Mining and Oil & Gas Machinery Manufacturers Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Mar 15, 2023 - Deep-Sea Mining for Battery Minerals
                                  • 2023 is shaping up to be a pivotal year for deep-sea exploration and mining for minerals that can be used in making batteries for electric vehicles, The Wall Street Journal reports. Mining of the sea floor could be licensed worldwide as soon as July, despite concerns about environmental destruction of the seafloor, according to WSJ. The International Seabed Authority (ISA), established under the 1982 UN Convention on the Law of the Sea, is drawing up a regulatory framework for deep-sea mining based on data collected from explorations conducted by Canadian startup the Metals Co. and other ventures to inform its decisions. Despite calls for a moratorium on deep-sea mining from France, New Zealand and other counties, the ISA is expected to meet member nations this month, when deep-sea exploration and its regulations are expected to be discussed.
                                  • Increasing US power generation from new renewables capacity – mostly wind and solar – will reduce generation from both coal-fired and natural gas-fired power plants in 2023 and 2024, the US Energy Information Administration (EIA) reported in January. With new solar and wind projects coming online this year, the EIA forecasts these two energy sources will account for 16% of total generation in 2023, up from 14% last year and 8% in 2018. In contrast, the agency’s forecast share of power generation from coal falls from 20% in 2022 to 18% in this year. The 2% decline in coal generation in 2023 comes as lower natural gas fuel costs make coal a less competitive source for electricity supply. The EIA forecasts coal generation to fall again in 2024 to 17%. The decline in coal-fired power generation and the number of US coal mines has reduced equipment sales opportunities for mining machinery manufacturers.
                                  • Hefty profits fueled by last year’s soaring energy prices are causing global energy companies to dial back their shift to low-carbon energy and increase spending on oil and gas production, The Wall Street Journal reports. BP reported a profit in the fourth quarter of $4.8 billion and $27.7 billion for the year, bringing the combined profits reported so far for 2022 by the biggest Western oil companies – including Exxon Mobil, Chevron and Shell– to more than $159 billion, according to WSJ. BP’s chief executive explained the company’s shift from aggressively moving away from fossil fuels to increasing spending on oil and gas production as “responding to what society wants.” BP now aims to reduce fossil-fuel production by 2030 by around 25% from 2019 levels vs its previous aim to cut that output by 40% during the same period.
                                  • In a deal that will help to accelerate development of its electrified products, US equipment manufacturer Caterpillar has invested in battery technology company Lithos Energy, Mining Magazine reported in January. California-based Lithos produces lithium-ion battery packs for off-road and marine vehicles. “Caterpillar’s collaboration with Lithos supports our commitment to delivering robust electrified products and solutions for our customers,” said Joe Creed, group president of Caterpillar’s Energy & Transportation segment. The investment – of an undisclosed amount – supports the equipment maker’s energy transition with lower-carbon advanced power technologies for its hybrid and full-electric machines and power generation products. The company recently demonstrated its first battery electric 793 large mining truck at its proving ground in Tucson, Arizona.
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