How Komatsu is preparing for a possible Brazilian mining boom

Japanese heavy machinery manufacturer Komatsu is investing 175mn reais (US$35.7mn) in Brazil in expansions and facility upgrades to serve customers that are planning to increase production. 

The investments are going to major mining states Minas Gerais and Pará, the former seeing 120mn reais spent on a new facility in the city of Contagem and the latter 55mn reais for a unit in Parauapebas.

Several of the company's manufacturing lines are expected to see higher sales due to the growth in the Brazilian mining industry, including its autonomous mining trucks, some of which are already operating in the country.

Ricardo Alexandre Vieira dos Santos, vice president of the company’s mining division, tells BNamericas about the expansion plans and general business prospects.

BNamericas: Why did Komatsu see the need to step up investments in expansion and modernization?

Dos Santos: We noted that mining companies operating in Brazil, mainly in the areas of iron ore and copper, are implementing expansion plans.

Iron ore production alone is projected to grow 16% by 2026, so we want to be partners with mining companies in this expansion.

Of course, like all expansion projections, there are risks. In the case of mining, the risks are always associated with social conflicts and global political issues, but we're optimistic about the scenario.

BNamericas: Could you provide some details about the unit Komatsu is building in Contagem in Minas Gerais?

Dos Santos: Just for this unit, we're projecting an investment of at least 120mn reais and it will unify the operations of two of our units in Minas Gerais state.

This unit will house Komatsu's new headquarters in Brazil and will be ready at the end of 2025. The building will allow our facilities to double in size if necessary.

It will also host a distribution and repair center for our equipment, both electric and technological, which will increase our operating capacity by up to 40% to serve our customers.

BNamericas: Is the investment also related to mining companies’ concerns regarding the supply chain, lack of equipment or delays in deliveries, which became acute during the pandemic?

Dos Santos: Without a doubt. In fact, our products and the solutions available from this unit will serve to help our customers be even more competitive and perform better, having a cost per ton appropriate to their projects, as well as faster delivery and completion of projects.

We will continue to serve more customers from the north to the south of the country.

BNamericas: Is Komatsu eyeing business beyond the iron ore and copper segments?

Dos Santos: In addition to surface equipment, we also have underground equipment, so we have the prospect of serving gold and fertilizer projects.

Furthermore, I see potential in the nickel area, where we're in talks with Vale to offer our solutions for their Onça-Puma project in Pará state.

BNamericas: How big is the mining machinery and equipment market in Brazil?

Dos Santos: I don't have an exact figure, but the potential for fleets and autonomous operations alone is enormous.

Of course, specific planning is necessary to transform a traditional mine operation into an autonomous operation, but we've carried out tests, for example, at Carajás in Pará state, which showed an increase in production and a reduction in costs with autonomous operations.

But it should be noted that autonomous mine operations are limited to mines that are older and have small fleets.

BNamericas: Can the unit in Brazil become a platform for Komatsu to export other Latin American countries?

Dos Santos: We're an export platform for products such as hydraulic hoses and some other equipment, which we export to Peru, Chile and Mexico. Our unit in Pará will produce buckets and we're already discussing exporting them.

BNamericas: What else do you consider important?

Dos Santos: I would like to highlight one point about how we develop people at Komatsu. We want to transform people's reality, provide opportunities and that's why we offer technical, mechanical and training courses to make more women, who previously didn't have adequate training, part of our staff.