Tentative optimism filled the exhibit halls at this year's MINExpo, where Caterpillar Inc. delivered a softened three-year outlook. Despite cooling commodities demand, the National Mining Association show, held on Sept. 24-26 in Las Vegas, attracted 50,000 attendees and 850,000 sq ft of exhibits, a respective 30% and 42% jump over the last show in 2008.
"The mood of the overall show was cautious, though manufacturers remained optimistic, long term," said Credit Suisse analyst Jamie L. Cook in an investor note. "Despite the softness, the previous growth rates for China were unsustainable."
Caterpillar seemingly agreed. On Sept. 24, the Peoria, Ill.-based equipment manufacturer cut its 2015 earnings estimate to $12 to $18 per share from $15 to $20 per share. The move, which roiled Wall Street trading, reflected a global macroeconomic slowdown.
"We believe Cat is well positioned for an economic recovery, which is long-term positive," said BMO Capital Markets analyst Joel Tiss in an investor note. "However, continued uncertainty, particularly in the U.S. and Europe, as well as slowing growth and inventory reductions that could last into the second quarter of 2013, could hold back shares over the next several quarters."
Even so, Caterpillar, which acquired rival Bucyrus last year for $8.8 billion, showcased supersized yellow iron on the convention floor. The company introduced the 6120BH-FS mining shovel, which is 30% larger than the current 6090 model and said to be among the world's largest hydraulic shovels, with an operating weight of 1,400 tons. The 120-ton capacity bucket—the equivalent of 50 pickup trucks—can load a 360-ton haul truck in three passes instead of four, which is commonplace among today's largest shovels. The 6120 draws the same amount of juice as the 6090—about 4,500 horsepower—but gets an added boost from two ultracapacitors that charge up during shovel operation. The regenerative hybrid-electric power is expected to cut fuel use by 25%. Cat expects to begin commercial deliveries in 2014.
Not to be outdone, Joy Global Inc., Milwaukee, unveiled its 135-ton-capacity shovel. Like the 6120, the new 4800XPC P&H ultra-class shovel can fill a haul truck in three passes instead of four. Yet, it will be only marginally larger than the current P&H 4100XPC shovel, and its ground-bearing pressure will essentially match that of the outgoing model. The price tag is about $40 million.
The economic slowdown in China "is pause rather than a recession," said NMA spokesman Luke Popovich. "We're really pleased about the show turnout. A lot of multi-million dollar deals were done."