Exclusive: FLSmidth takes over thyssenkrupp’s mining business

In a major development, bulk handling company FLSmidth is set to acquire thyssenkrupp’s Mining business. An exclusive interview with FLSmidth reveals the reasons for this acquisition, and explains the ways in which it will enhance FLSmidth’s product offering, and also benefit existing thyssenkrupp customers. The following question-and-answer session explains all.

 

 

A: The acquisition was identified as a good opportunity for FLSmidth, as it allows us to strengthen our position as one of the leading suppliers for our customers in the global mining industry. The combined full-line coverage of FLSmidth and thyssenkrupp’s Mining business includes a strengthening of our pit-to-plant range of technology, equipment and service expertise, as well as best-in-class digital solutions, covering continuous mining, mineral processing, mining systems and material handling.

 

We also see an opportunity in an increased installed base and prospective customer base. This will increase our competencies to serve our customers across multiple technologies. And it will allow a more robust customer approach in service and aftermarket, as well as the creation of stronger strategic opportunities and boosting resource and investment in R&D, digital and innovation. This will result in a shorter time to market for new innovations and technologies.

 

Both parties also share a common belief in bringing technology that supports customers in achieving their sustainability goals.

 

We see the thyssenkrupp Mining offering as an ideal fit with FLSmidth’s MissionZero sustainability ambition and with our digitalization agenda. Overall, we see the mining industry as heading into a growth phase, and this acquisition will place FLSmidth in an even better position to meet customer needs.

 

 

A: In the short term, while regulatory approvals are being sought, customers will experience no changes. It will very much be business as usual. Following the expected regulatory approvals, thyssenkrupp’s Mining equipment, solutions, digital solutions and service business will be integrated into FLSmidth. During this time, there will be as few alterations as possible for customers when it comes to as supply chain reliability, service and maintenance, digital support and other areas. We will remain easy to do business with.

 

If approved, the acquisition will put FLSmidth on a path towards becoming one of the world’s best and most sophisticated suppliers to the mining industry and place FLSmidth as one of the global, leading technology providers. Customers will benefit from a global leading technology provider from pit to plant with a full-line supply of solutions for continuous mining, mineral processing, equipment, and systems.

 

If the acquisition is approved, the full range of FLSmidth and thyssenkrupp Mining equipment and solutions will be fully supported by an even larger team of experts. No one understands equipment across its lifecycle quite like an OEM. We will fully leverage the knowhow of our new thyssenkrupp colleagues and integrate them into our local, 24/7 customer service across all regions.

 

We do not, at this point in time, foresee any significant changes in aftermarket and service. One of the main benefits we see from the acquisition of thyssenkrupp’s Mining business is an improved and more robust customer service and aftermarket offering. The combined FLSmidth and thyssenkrupp installed base will provide a strong growth area for maintenance and optimization, wear and spare parts and integrated digital and automation solutions.

 

The transaction will not affect any warranties, agreements and contracts/ purchase orders currently in place. All warranties and agreements with thyssenkrupp Mining that are valid at closing of the transaction will be fully honoured by FLSmidth.

 

 

A: People are the true value of any company. At FLSmidth, we pursue organic growth built upon our own innovations and solutions. At the same time, we have a long history of acquiring companies that may complement our own offering and welcoming new colleagues from around the world to our family. Should we proceed to closing, employees from both companies will have the opportunity to share what they know, learn from best practices, and serve a wider range of customers — and with more business, comes more pathways to expand our skillset and experience and grow our careers.

 

Individuals joining us from thyssenkrupp’s Mining business will be integrated into our model from day one and will be part of the FLSmidth family. We don’t expect a high number of role duplications, but as is the case when filling any position, an objective assessment process is always conducted.

 

 

A: The deal is currently undergoing regulatory approvals in multiple jurisdictions and FLSmidth is hopeful that the deal will be approved by the second half of 2022. The role of regulatory authorities is to protect customers. They want to ensure that customers have a healthy choice between suppliers and prices remain competitive. It remains our expectation that the acquisition will be fully approved.

 

 

A: Until we receive approval to close the transaction and complete the acquisition, we remain as we are today, operating as two separate and competing entities. Therefore, we will not be able to, for instance, offer potential customers technologies from thyssenkrupp Mining for their projects.

 

Currently, we are in the merger control filing and integration planning stage. The latter is where we will engage in certain limited integration planning efforts that can last up to one year. No actual integration will happen during this period, and FLSmidth and thyssenkrupp Mining will continue to operate as competitors.

 

 

A: FLSmidth’s main issue in the past was that we attempted to apply light-weight port material handling equipment for heavy-duty work in the mines which didn’t turn out successfully (our sold-off Wadgassen business). Thyssenkrupp Mining comes from a different starting point. Its range of material handling equipment is specifically designed for heavy-duty minerals material handling.

 

 

A: The optimization of bulk handling is a big priority and an exciting area for us. We are seeing a lot of interest in our BulkExpert™ digital solution, for instance. BulkExpert is a digital solution that allows for the unmanned, fully automated and optimized movement of both material and material handling equipment in ports and terminals. It does this by using a 3D laser scanning system, RTK-GPS technologies and intelligent control software that enable fully autonomous operation.

 

To run these machines fully unmanned, they need awareness of their environment. FLSmidth’s BulkExpert models the environment from a laser scan and/or a mathematical calculated model. These digital twins of the stockpiles allows better quality management by keeping track of the material in the piles. A sophisticated material blending control keeps track of the correct ratio from the beginning of operations by using multiple source machines — this reduces quality deviations and enables the customer to save valuable natural resources.

 

The solution delivers several clear benefits to bulk customer, including higher throughput, greater efficiency and increased guaranteed performance. Extended machine life and reduced maintenance can also be expected due to lower stress on the machinery.

 

The BulkExpert solution can be fully integrated with the customer’s own systems and provides safer remote operations thanks to technical innovations like an enhanced anti-collision and collision-avoidance system.

 

The solution also advances our MissionZero sustainability ambition: Through digital optimization, BulkExpert significantly increases the equipment efficiency and reduces stockyard energy consumption by augmenting the operation of the stockyard equipment and stockyard infrastructure. Simultaneously, BulkExpert reduces the need for the more polluting manually operated dozers and loaders with a worse CO2 balance.

 

One of the latest developments is a digital twin of the belt conveyor system. This enables the monitoring of the material flow of various source machines in order to optimize their feed rate while avoiding overload. This allows for collaboration between machines, and it plays no role if they are already fully unmanned, semi-auto or manual operated. Such a collaboration can boost production as machines can compensate for each other. By producing as much as possible as long as possible, it tackles the gap between theoretical transport capacity and real material throughput. This results in a significant increase of the overall equipment effectiveness (OEE). These benefits provide good examples of how FLSmidth enables mining customers to move towards zero impact mining.

 

 

A: Customers will quickly begin to notice a stronger combined customer approach and service setup, as well as the benefits of extended mining flowsheet coverage and a more localized approach due to a larger geographical footprint.

 

Thyssenkrupp Mining’s equipment offering consists of open-pit mining equipment and systems, mineral processing solutions and material handling solutions. Thyssenkrupp is primarily involved in crushing, conveying, grinding and processing, which we see as broadly complementary to our offering.

 

We do have some overlap of technologies, but we see a clear complementary offering — especially in the areas of sustainability and digitalization. For example, thyssenkrupp Mining has a strong in-pit crushing set up that is complementary to our existing offering, and in grinding, they have a strong position with HPGRs, whereas we are one of the leading providers in other grinding solutions, such as SAG mills.

 

We have positioned ourselves close to the customer with a focus on strong relationships, from initial equipment purchase through the ultimate decommissioning or replacement. Now, with an expanded service team and larger global footprint, customers can expect even faster and better service.