- Caterpillar (CAT) says the U.S. mining equipment industry faces more than $500M in potential lost sales if U.S. miners succeed in opposing $650M in government-backed financing for the Roy Hill iron ore project in Australia, FT reports.
- Equipment makers, including CAT, support the loan to the $10B mining project in Western Australia, because the resulting orders for trucks and bulldozers would help the struggling industry, but miners, led by Cliffs Natural Resources (CLF), believe the project would hurt U.S. mining interests.
- CAT suffered a 10% Y/Y drop in global sales in the three months ended in August; rival Joy Global (JOY), another likely supplier to the Roy Hill project, saw a 36% drop in Q3 orders and has sharply cut its revenue forecast for the coming year.
- The miners argue that the 55M metric tons of annual production from Roy Hill set to come online in late 2015 would contribute to a global oversupply, putting pressure on iron ore prices.
U.S. mining equipment makers clash with U.S. miners over Australia project
Sep 30 2013, 17:57 ET