Gold is not on too many national critical mineral lists but it’s high on major equipment manufacturer Sandvik’s register of sales and profit generators. As it is for most of the world’s leading suppliers of mining machinery and technology.
Copper and coal are generally next on the list. Lithium, graphite and rare earths a long way down at this stage.
Gold, copper and coal collectively account for about 60% of the revenues of Sandvik Mining and Rock Solutions (SMR), Sandvik’s biggest business, which topped US$6 billion in 2024.
Despite what is perceived generally as a soft mining equipment market Stockholm-listed Sandvik reported record quarterly revenues for SMR for the final three months of 2024, which helped the group to a flat sales year overall.
Sandvik posted full-year group EBITA of SEK20.49 billion (US$1.94 billion) on SEK122.9 billion revenues ($11.6 billion), with SMR (SEK63.6b) 52% of the revenue total and Sandvik Manufacturing and Machining Solutions contributing SEK48.6b ($4.6b), or about 39.5% of the group number.
SMR’s little sister, Sandvik Rock Processing, added SEK10.7b (8.5%), or about $1.01b of sales.
SMR’s EBITA margin hovered above 20% through 2024, above the group EBITA line at 19.5%.
“Favourable copper and gold price levels drove high mining production throughout 2024 and in the fourth quarter,” the company reported.
“Strong momentum was noted in the aftermarket business, driven by high activity in combination with older machines requiring a higher degree of maintenance.”
Sandvik CEO Stefan Widing told analysts on a quarterly briefing call “we are market leaders in gold and it’s a big part of our exposure and the high gold prices are good for our business, no doubt”.
SMR closed the full-year “with basically double-digit growth”.
As well as a bigger, ageing fleet, another significant factor in mining aftermarket business growth was delivery of “more advanced solutions”.
Sandvik’s Digital Mining Technologies “division” – not reported separately – is leading rapid expansion of the group’s software and digital sales, on the back of a string of acquisitions and organic growth.
Widing said the mining software business grew at double-digit rates in 2024, with “good profitability … even though they have actually gone through a transition from perpetual licence to SaaS, which does tend to give a bit of a trough on the financials”.
“They have executed that really well and now gone to a full SaaS model. And that is something that we will now benefit from going forward.”
By contrast, the manufacturing and machining software business “grew by mid-single digits” in 2024.
“We can see that we have strengthened our resilience with an increased share of recurring revenues and value-based solutions, which is why I think that we can show a much more stable top line in this downturn,” Widing said.
“In 2024 we ended with software and digital revenues above SEK5 billion.
“We are on track to achieve our target for 2025 of around 5% of turnover being software and digital which, of course, is a massive transformation for a company the size of Sandvik.”
The other key transformation underway is the shift from diesel equipment to battery-powered and hybrid machines and on this front 2024 produced mixed fortunes for Sandvik and its mining peers.
“I would say 2024 has been a year of, let’s say, a reflection in terms of electrified mining equipment,” Widing said.
“Interest is still very high – a lot of conversations, smaller repeat orders being placed – but we haven’t seen, as we did in both 2022 and 2023, big fleet orders for BEVs. We had a couple of big fleet orders prior to that. Those orders are now being delivered.
“In Q4 [2024], for example, we had record-high revenues from BEVs. Around 10% of load and haul sales were BEVs. But that’s on the back of strong order intake in prior years.
“Order intake this year has more been in the mid-single digits.
“So it clearly shows a more muted demand this year.
“We feel that industry is a little bit in a wait and see when it comes to placing these bigger orders to see how the big fleets now being deployed are going to perform.
“And when that is proven we think there’s a bigger chance that we’re not only going to see the early adopters going here but also more followers will go into electrification.
“The trend is there, there is still a momentum, but there is a little bit of a pause in terms of the bigger fleet deployments this year.”