Global mining equipment and services provider Industrea Limited (ASX:IDL) has added the Zhengzhou Coal Group to its growing list of international clients, after winning a $5.72 million contract to provide directional drilling equipment and coal degasification systems to the Chinese company.
It is the latest in a series of major Chinese contracts secured by Industrea, including a $10 million contract with the Longmei Mining Group announced in May.
Industrea managing director Rob Levison said the company’s expansion into China had always been a major growth strategy driver and it was pleasing to see it coming to fruition with the addition of new clients such as Zhengzhou.
“Our success in this area can be attributed to our sales and distribution being co-ordinated on the ground by our Beijing-based subsidiary Wadam Industries.
“It has proven advantageous for marketing our products, networking with potential clients and delivering a quality service for our existing clients.
“We look forward to further opportunities to grow our business in China, increase profitability and increase shareholder value.”
Mr Levison said the modernisation of China’s mines – with the expectation of greater safety and productivity - continues to fuel demand for Industrea’s products such as directional drilling and coal degasification systems.
“With coal demand and prices continuing to rise, new capital projects that were high on the cost curve are being brought forward. This is resulting in Industrea experiencing increased levels of inquiries that will impact positively on both the 2009 and 2010 financial years,” he said.
“Also, as the population of Wadam-supplied equipment continues to grow in the Chinese market, Industrea has an expectation that revenues associated with the sales of spare parts and servicing will increase in line with total cumulative sales.”
Industrea’s directional drilling equipment assists in the accurate placement of in-seam horizontal bore holes. The technology aids in the degasification of mines and is suitable for both underground and surface drilling.