THE evolution of the mining technology sector is continuing despite tough market conditions and a limited number of mines, with Australian companies diversifying to maintain market share and their position as leaders in the industry.
The mining sector’s upturn of the past few years has been matched by some industry consolidation in the mining technology sector.
Late last year Perth-based Surpac Software International merged with ECS International to form Surpac Minex Group, while the proposed merger of Datamine and Comlabs Systems and Designs fell through after 18 months of negotiation.
However, the main players consider their positions in the industry to be strong. Most say they have experienced growth in the past year and expect that trend to continue into the current financial year.
Some companies are branching out into new product development and diversification to generate their point of difference, while others are focusing on core competencies.
Australian software products dominate the industry in many parts of the globe, in no small part because of the domestic needs of the country’s strong mining sector.
Despite having its head office in Adelaide, Maptek’s development division, its largest, is based in Perth.
Maptek managing director Phil Edmiston said Maptek was retaining its position by broadening its product offering – including IT services.
“The market has become a bit saturated and there is a limited number of mines in the world. It is a vertical market and there is a lot of competition,” he said.
“It is getting more competitive, tougher. In Australia there have been more spending cuts in mining but more mergers and acquisitions in mining software.”
However, Mr Edmiston said the difficulty some smaller players faced in the mining technology industry was their ability to provide services to some of their international clients.
“The other business piece of the puzzle is support networks. What a mining company is looking at is for the longevity of a company and how they will provide support around the world,” he said.
“There has been a real impetus on support. This has been a real problem for WA companies because they haven’t been able to set up offices world wide.”
Surpac Mining Minex Software sales manager Rebecca Kellam said that while the industry continued to be very competitive, Surpac had continued to grow by focusing on its core competencies after a successful merger with a complimentary competitor.
“The merging of the two companies is still happening in that we are still in the process of integrating the two businesses,” Ms Kellam said.
“The research and development divisions have already merged and we are already seeing the benefits of that.
“We haven’t had our final audited figures yet, but would estimate between $800,000 and $900,000 profit on $10 million of turnaround.
Those figures were up from $600,000-$700,000 profit on $6 million for the previous year, she said.
Datamine general manager Don Vreugdenburg said Datamine, in addition to building on its core competencies, was looking at diversification in other areas.
He said the company had experienced 20 per cent growth in the past year, was hiring new staff and was looking at opening offices on the east cost.
Mr Vreugdenburg said growth for Datamine this year was expected to be 30 per cent.
Despite a mutual decision by the directors of Datamine and Comlabs Systems and Designs not to go ahead with a planned merger, Datamine may look at another merger in the next couple of years, he said.
Metech managing director Bill Withers said Metech was expanding its product offering, with the company planning on taking its product set to other commodities, adding to existing clients in the base metals, gold, diamonds and iron ore industries.
“Our technology is well designed to go into other markets,” he said.
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