When miners look for ways to control costs, improving efficiency is a typical first step. And one of the primary places they seek these efficiency gains is through the performance of their equipment. How can they better train operators to ensure they are working as productively as possible? How can they improve site conditions that may be impacting cycle times? Should they consider newer machines that have the latest efficiency updates?
One thing they may not consider is how financial solutions play a role in making these cost-control and efficiency improvements a reality. The experts at Cat Financial, a captive lender of mining equipment manufacturer Caterpillar, offer four things to consider:
- Consider machine replacement options. Acquiring new equipment does not always fit every budget. Rebuilding equipment can help you maximize the value of your investment, incorporate efficiency improvements and improve availability — at a lower cost. And financing or deferring payments for rebuilds can make it even more cost-effective. Another option is to purchase used equipment or lease newer machines — both options that can improve efficiency without the capital investment for a new piece of equipment.
- Invest in technology. While spending money to acquire technology may seem counter-intuitive, it can pay for itself very quickly. In fact, Caterpillar reports that most of its technologies for mining can deliver a return on investment in less than a year. Technologies make it possible for miners to optimize every aspect of their operations. For customers seeking to take advantage of the efficiency gains technology can deliver, Cat Financial can help. Customers can bundle financing for equipment and technology purchased together, or may be eligible to finance technology components purchased separately.
- Consider credit. For mining companies looking to improve cash flow, Cat Financial suggests setting up a revolving line of credit to cover expenses like parts, service, attachments, rentals and even technology.
- Work with your lender. If mining companies need additional help to improve cash flow Cat Financial, for example, will work to modify existing contracts to align debt service with an operation’s cash flow. That flexibility extends to new machines as well. Sometimes it may take several months before new equipment is up and running on site and deferring payments during that time might be the right solution. Working capital loans are also an option for mines looking to inject cash into their operations. Subject to approval.