Quarry appeal to investors

Quarrying is very much a specialist industry and this is often a fact that is overlooked by investors and industry outsiders. In recent months, the need for specialist focus has been highlighted by a number of changes in the sector.

One of the biggest was the news that 868 Tarmac has sold off 100 of its European quarries to 4616 Eurovia, marking the start of 722 Anglo American's piecemeal disposal of the company it had high hopes for a decade ago. But even back in 2000, the quarrying industry and market analysts questioned a mining company moving into the aggregates market. While both mining and quarrying are extractive industries, the difference in price per tonne and area of influence are very different - Anglo was used to dealing with materials that fetched hundreds or thousands of Euros per tonne and which were global commodities. Whereas aggregates, which are much more abundant and more widely spread, are much lower value items that are rarely transported more than 80km from the quarry.

Anglo recognised the specialist nature of the quarry sector when it declared that it was not a core market for the mining giant in summer 2008 and Tarmac was up for sale. While the quarries in continental Europe have now been hived off, the UK arm of the business is still held by Anglo, however the 'for sale' board has not yet been taken down.

The financial crisis means that Anglo is not alone in focusing on its core business and there have been a number of speculatively bought aggregates operations moving back to more established names in the business.

Nonetheless. the recognition of quarrying as a specialism extends beyond business transactions and is highlighted by two features in this issue.

In this issue's lead interview I met with Colin Mew who heads up the new National Quarries Inspection Team for the UK's Health & Safety Executive. Under the new organisation, the HSE has created a national structure for working with quarries with dedicated inspectors for the sector. This replaces the previous regional structure where inspectors were responsible for a number of other industries as well as quarry work.

Mew hopes that this new approach will allow the regulator to work more closely with the large quarry operators that dominate the UK industry and ultimately lead to more of a partner-focused initiative.

Another company underlining its understanding of the quarry sector's specialist needs is 395 Caterpillar. In the equipment update, we have two exclusives from Cat - one one the upgrade of the 988H wheeled loader and the other on the launch of their new quarry truck bodies. While the quarry truck body is not a completely new concept - although iti is an all-new design - it is a return to a previous strategy in a bid to deliver specialist products to meet the needs of quarry customers.

The key message from these stories appears to be, that quarrying has become a complex and technologically advanced sector that needs to be respected for its capabilities and competencies.