North American mining market expected to stabilize

The North American mining market in 2019 operated on par with the previous year, and the steady trend is expected to continue this year.

There was some weakness at year-end, in coal mining, according to Bruce Besancon, vice president of OTR tires for Yokohama Tire Corp., but he noted that coal will be in demand for the near future as there still are coal-fired electricity plants and export potential.

"The companies that have been in mining historically are, for lack of better words, the winners of mining," he said.

He predicted that top-tier mining companies have survived the consolidation of a few years ago, but smaller players, perhaps in the coal industry, might continue to experience consolidation or mergers.

The U.S. Energy Information Administration estimated that U.S. coal production declined 9 percent in 2019 and expects U.S. coal production will drop by a further 14 percent this year because of anticipated declines in both exports and domestic consumption in the electric power sector.

The EIA expects the largest declines in coal production in 2020 will occur in the Western production region. The coal market has undergone significant restructuring in the past year.

"Overall, 2019 was a positive year for the mining industry. We saw tire consumption growth and tire supply improvement," Jake Thompson, B2B mining business segment marketing manager, Michelin North America, said.

And, while 2020 is a presidential election year—which can present obstacles in the market, he still expects to see growth this time around.

Besancon expects the mining industry in 2020 to be fairly stable, but he does see potential for a slight downturn in the coal market.

He said there always are concerns during a presidential election about what the next administration will bring. The Trump administration has been a bit more friendly to coal and there have been fewer concerns about coal mines getting shut down, he said, and fewer concerns about environmental regulations, available lands, permitting, etc.

"In the mining industry, we, overall, expect the market to remain flat in 2020," said Tim Netzel, marketing director, off-the-road, U.S. and Canada, at Bridgestone Americas Tire Operations.

"According to the U.S. Bureau of Labor Statistics, the mining industry has seen a slight uptick in employment, with the addition of approximately 200 jobs, since 2018. This, coupled with a stable commodities market in 2019, suggests the mining industry will hold steady through 2020."

Trends in mining

"In the past, we have seen the overproduction of OTR tires in the mining industry," Michelin's Thompson said. "As we enter 2020, we do not see overproduction. Certain customers could have a little more inventory or less, but the market seems to be aligned between tire consumption and production."

In the North American market there is no shortage of tire dealers catering to the mining industry, and the mature tire dealers who have been in the mining tire business for a long time are growing their businesses, according to Besancon.

"I think there has been a refining of the dealerships who specialize in that. ... (Mining companies) are expecting their vendors, including the tire dealers, to make sure they have safe, trained workers, efficient workers who are productive and know exactly what they are doing.

"In the mining world that is a specialized task, and I think that the dealers that are in this are investing in making sure that they've got good workers, they've got productive workers and knowledgeable workers who have been trained to know how to work in that environment through all the protective gear, through all the regulations that they have. And I believe that's a core concentration that these dealers have specialized in.

"It also makes it a barrier for entry for new players. I don't see a lot of people transforming their organizations to go after mining," Besancon said.

"Downtime continues to be the biggest issue for mining operators today," Bridgestone's Netzel said. "Today's mining customers recognize that tires are one of a mine site's most valuable assets and they must be properly managed to help avoid costly downtime.

"Also, mining producers are becoming more sophisticated—they demand integrated technologies to help them manage their assets. For tires, this means gathering data and leveraging it to create predictive insights, all designed to help producers move more, every day," he added.

"Generally, we see alignment between the overall health of the mining industry and the mining tire market. We see some pressure on thermal coal and growth in other commodities. Additionally, miners are needing to go faster and carry more load," Thompson said.

Besancon sees mining companies increasing their use of technology and boosting productivity from faster, bigger machines.

"The goal is to have any equipment that you have running as much as you can get it running, and be as productive as possible. Many mines, particularly in North America, like bigger machines. That was a trend that started back around the 1980s, so to speak, to now," he said.

"So you've seen a lot of mines go to the ultra class, the 400-ton haul trucks. However, you see also a tremendous increase in the productivity, the speed, the maintenance capabilities of the machines, meaning a little bit longer between maintenance.

"Everything is looking at how you refurb the machines. I think we're in a mindset right now—I think it's a good one—you buy an asset and then you take as much out of it as you can. ... Keep everything you have running as much of the time as you can with the most productive and most efficient products that are out there."

"Dealers looking to grow their business must focus on more than product," Netzel, said.

"Today's mining customers are looking for product, technology and service, creating an integrated solutions offering to help them operate more efficiently. Dealers have a unique opportunity to earn the business of the evolving mining customer by ensuring they have access to a full suite of solutions that decrease downtime and help them move more."

Tire evolution

"The tire is a substantial portion of the operating costs of the machine when you get into the higher tonnage haul class," Besancon said. "So there is a tremendous effort to always lower the cost-per-hour or the cost-per-ton moved with the tire.

"That's what we as a manufacturer is always striving to do. The tires that are in the market today are not the same tires that were there in 1990 or even 2000. And I daresay the tires we have today will not be the same tire—it might have the same name, it might have the same tread pattern, so to speak, but it will be different—in 2030 because we're always in a constant evolution."

Besancon noted that with more emphasis on productivity, there is more emphasis on technology that goes into producing a mining tire.

"Mining companies want to have predictive maintenance, therefore we've seen a lot more 'technology' in the tire, electronic sensors, things of that nature that interact both with the truck itself and the driver.

"We went through this in the passenger vehicle with TPMS (tire pressure monitoring systems). That's a big factor in mining—you see more and more of that."

Such technology will be able to predict tire life, alert the company when a tire needs maintenance or inflation, indicate how much stress is induced on the tire and the machine, and reduce vibration for driver comfort, he said.