Middle East is once again showing signs of unrest, which could have an effect on the supply and prices of crude oil. With supply under pressure, prices are bound to rise: Once again, bringing into focus the challenges that continue to emerge, adding further pressure on total cost of ownership (TCO). Fuel and other consumables make up a large chunk of TCO. What makes it even more important is the expectation that the worldwide mining equipment market is expected to expand 8.6 per cent annually in the next three years to $135 billion, spurred by avid demand for mined materials in China, India and several other developing nations. As resource companies look towards capitalising on new sales opportunities in industrialising and developing countries such as Brazil, China and India, demand for machinery such as drilling and earthmoving is expected to boost the need for shredders, loaders and crushers in nations with large deposits of industrial materials.
Diesel prices in India have been rising, albeit slowly, for the last year-and-a-half. They are linked to global crude oil prices, but they are also linked to the government's effort to reduce fuel subsidy. In a situation where the economic environment is starting to take a positive turn, the rise in fuel prices could act as a dampener. And at a time when the largest sales growth in the next few years is estimated to come out of the Asia-Pacific market, fuelled by substantial investments in new mine production capacity in several nations. Apart from reliable equipment, the need is clearly for equipment, which is less harmful to the environment and more energy efficient. Electric power is the future. Many advanced markets are already embracing electric and hybrid equipment. In India, the use of electric and hybrid technology is limited to forklifts and few other equipment. The need is to expand it to the mainstream equipment, starting with backhoe loaders, wheel loaders, etc.
In what looks like an interesting development, Oerlikon Drive Systems, which also has a presence in India, is showcasing its hybrid electric drivetrain technology at Moscow, Russia. The technology includes a complete series of driveline systems ranging from engines to wheels, with an innovative energy recovery system linked in. It is first-of-its-kind and designed by a company specialising in drive systems. The hybrid electric drivetrain holds the key to the future, where India could play a critical role. As the use of hybrid and electric drivetrains rise (it will), the nature of the components sector is certain to transform itself; from low value mechanical components to high value mechatronic components. Indian components industry is good at mechanical components forgings, castings, precision machined, etc. There is a need to add a touch of electrical and electronics know-how to it to move up the value chain in order to support machines that are less harmful to the environment and more energy efficient. Especially, when the definition of energy efficiency is coming to include technologies like LEDs and lasers!