“The largest deal the group has ever closed” was how Hexagon CEO Paolo Guglielmini described its new road-train automation agreement with Australian mining and services company, Mineral Resources (MinRes), on Hexagon’s latest financial results call.
The Stockholm-listed, €23 billion company reported June quarter net earnings of €293.4 million on €1366 million sales, down 4% and up 8%, respectively, on the same time last year. Sales for the first half of 2023 were also 8% higher year-on-year at €2652.6m, while net earnings were flat at €575.8m.
Guglielmini said the 8% organic Q2 sales growth was driven by “continued adoption of our innovative solutions in the A&P [autonomy/positioning], ALI [asset lifecycle intelligence] and MI [manufacturing intelligence] portfolios, all growing at double-digit rates”.
“We also signed a transformational and long-term commitment, the largest in Hexagon’s history, to deliver the world’s first and largest autonomous road train for mining applications, powered by Hexagon’s drive-by-wire technology.
“Geosystems saw continued growth in its market leading reality capture, mining and AEC software portfolios, partly offset by a slowdown in residential construction demand in developed markets.”
The mining vertical, which generated about €507 million (US$535m) of sales for Hexagon last year, “continues to have a fantastic growth as a result of increased mine automation and demand for safety solutions”, chief strategy officer Ben Maslen told analysts.
The MinRes contract, focused on the Australian company’s Pilbara iron ore operations in Western Australia, “was won across our mining and autonomy and positioning divisions, and this follows a proof of concept that we did with the customer a couple of years ago”.
“In terms of the size of the contract, it has potential to be high tens of millions [of dollars] overall contract value delivered over five years [and] starting next year,” Maslen said.
The chief executive of MinRes’ mining services division, Mike Grey said in a statement released by the two companies the fleet of 120 autonomous road trains would lower operating costs, fuel use and emissions in the supply chain of the company’s 35 million tonnes a year Onslow iron ore project.
“There’s enormous potential for these vehicles to transform mining across the world,” Grey said.
Maslen told analysts he thought “this case study could prove one that opens up opportunities with other mining customers”.
“Obviously we have to deliver this project and go through a phase of gradual ramp up before the real delivery start over four or five years,” he said.
“All of them [resource/mine owners] have the same problem that the mines are a long way from the ports where they need to ship the ore from to get it from A to B.
“Traditionally they built railways, which is expensive, and if they can use existing infrastructure and automate that it could obviously reduce their cost without compromising on safety.
“So, yes, I think if the project goes well it definitely hopefully could lead to further project wins.”