Reliable Energy Solutions Secure Mine OperationsThu, 10/17/2019 - 13:18
Q: What is your assessment of Mexican mining industry over the last three years and how has it impacted your business?
A: Mexico is one of the main mining players in the world, regardless of who is in office at any moment. Mines remain but prices set the tone for when it is profitable to operate and exploit them. We perceive that there is great uncertainty in the sector, which comes from a couple of years of negative growth, with a contraction of 9.8 percent in 2017 and 6 percent in 2018. While the Ministry of Economy’s forecast for 2019 is 4.1 percent growth, uncertainty during ramp-ups can mitigate growth.
Our role in this scenario is to be at the forefront of innovation by developing new products to match all the industries in which we participate. In mining, we have a solutions portfolio from exploration to operation, including pumps, lighting towers and electric generators. We keep innovating because we understand that this world never stops, not even during downcycles. That is why we make a significant investment in R&D globally each year and we constantly monitor worldwide energy consumption to be ahead of the demand needs. In Mexico, we offer a premium product to the mining industry but we foresee the need for a more affordable line to diversify our market segments.
Q: Why should the mining industry choose Generac’s generators over other options in the market?
A: Our most demanded solution at the moment is our generator but the dust fighter is also popular. We do not care about only selling products, but providing solutions. Our generators vary from 15kW to 3,250kW, so they can adapt to every mining need. As for how to choose which is more appropriate for each type of operation, it is important to first guarantee the gas supply. Gas is the cheapest option for big equipment operating above 60 percent of capacity. But if a good gas supply is unavailable, diesel is the best bet, with the advantage that the engine’s cylinders can work given the demand. For biofuel equipment, as I mentioned, gas should be used after running at 60 percent of capacity and diesel below that.
Q: What is the greatest challenge for mine operations and how can Generac add value and contribute to tackling it?
A: I think the greatest challenge in Mexican mine operations is security. Generac offers highly reliable equipment to guarantee electricity supply, which in turn is key to guaranteeing the security of the operation. Our solutions work with diesel, gas or biofuel. Also, we offer lighting towers that can operate with an independent generator. As mines are often located in remote areas and far from urban centers, proper lighting becomes crucial to ensuring safety.
Our main added value is to secure the continuity of an operation, we understand that any electricity interruption implies a high risk. We are the biggest manufacturer of specialized reliable energy solutions in Latin America and we have around 300 engineers working worldwide on innovations, which are our main differentiators. We are not the cheapest option, but the most dependable. Our clients pay for the quality they receive. Generac also offers health solutions that can be applied to mining, such as our Dust Fighter, which mists water in the mine area to remove dust and create safer operations for workers.
Q: What role will mining play in the company’s future and how is the acquisition of Selmec expected to impact your participation?
A: Mining represents about 5 percent of our Mexican portfolio given the slow growth of the sector but we do have a higher participation with the players involved in the mining value chain. For example, we work with some of the main players by selling them generators and our goal is to become their electric solutions partner. As for the future, we expect to at least double our mining business in Mexico over the next five years to 10 percent of our portfolio. Our strategy, starting in 2019, is to have a team of around five people specialized in mining solutions and exclusively overseeing this sector.