Sandvik and Glencore Queensland Metals sign £136m deal

Sandvik, the Swedish multinational engineering company, has signed an agreement worth £136.1 million with Glencore Queensland Metals to supply underground and mobile mining equipment at Glencore’s Queensland and New South Wales metalliferous mines.

According to a report by Australian Mining, the deal will see Sandvik provide drills, loaders and trucks to Glencore over a six-year period. After inking the deal in June this year, Glencore placed an initial equipment order totalling £25.7 million, with Sandvik supplying the first piece of equipment under the deal.

Tim Redmond, Sandvik Mining and Rock Technology global account manager for Glencore, says that this deal was inked after more than a year of negotiations with the mining company.

“We spent nearly a year working closely with the Glencore team to identify exactly what was needed for the long-term success of their assets,” Redmond says, adding that Glencore issued a heavy mining equipment tender in 2018, before it requested an additional response to its tender in early 2019, asking Sandvik to provide a more 'innovative and collaborative solution'.

“Our solutions enabled us to optimise the upfront capital costs and provide a competitive supply of aftermarket services moving forward.”

A key advantage of the partnership is that Glencore’s fleet will now be based on one technology platform, ensuring that the company will be able to promote additional automation, mine intelligence and vehicle interaction controls in the future.

Simon Pope, Glencore Queensland Metals general manager – mining, points out that the agreement was significant for the company as it would see all heavy mobile mining equipment at the company’s Queensland sites supplied by one original equipment manufacturer (OEM).

“This partnership with Sandvik will help us improve the way we operate and maintain mobile equipment in our underground mines by providing us with a real reduction in the total cost to operate our primary fleet,” Pope said.

“We look forward to working with Sandvik to share operational and maintenance insights through new and emerging technologies and unlocking further improvements in safety for our people and the productivity of our mines.

“Sandvik machines have played a role in our operations for a number of years and have a proven track record for productivity and reliability,” he explains.

Redmond highlights that a key factor of the Glencore deal is that it creates a model that can now potentially be replicated in other markets and with other commodities.

“Rather than each party simply trying to get the best price, this agreement adds new value to the relationship and creates benefits for everyone,” he concludes.

Sandvik recently signed an agreement to acquire US based CGTech, a leader in software for numerical control (NC/CNC) simulation, verification and optimisation. 

The product offering includes VERICUT, a machining simulation and optimization software which is CAM, machine tool manufacturer and cutting tool neutral and works stand alone or in conjunction with all major CAM suppliers. The company will be reported in Sandvik Coromant, a division within Sandvik Machining Solutions.