Mining Systems is a separate product area within Sandvik Mining that supplies design and engineering of material handling systems. In 2016 the operations had annual sales of 2.9 billion SEK (US$344 million).
The project part of the business related to mining industry is being divested to FLSmidth. This includes all products for continuous surface mining and minerals handling technologies and related intellectual property, including drawings and reference lists. FLSmidth stated that the technologies and competences that will strengthen its core minerals business. The agreement will also include the transfer of employees with strong experience, competences and customer insights.
Ongoing orders and deliveries related to the non-mining material handling project business (mainly harbour projects) and some mining projects will be delivered by Sandvik through an operational agreement with FLSmidth. The projects are expected to be finalised during 2017–2019. FLSmidth is to provide project management and aftermarket services to Sandvik on the majority of ongoing projects to be delivered during 2017-2019.
FLSmidth stated that the pending acquisition will enable it to improve productivity for its customers by closing a gap and cover a wider range of the full mining value chain - from the primary crushing point in the mining pit and the transport from mine to plant all the way through the minerals processing plant to the tailings handling – ‘Pit to Plant’. By obtaining direct access to all key processes and equipment, the acquisition will allow FLSmidth to digitalise the full value chain and enables a better utilisation of existing leading technologies.
The agreement is subject to certain conditions, including regulatory authority clearance, and closing is expected by the end of 2017.
The divestment process of the conveyor components part of Mining Systems is ongoing and is proceeding according to plan, according to Sandvik.
Sandvik’s intention to divest Mining Systems was first communicated in October 2015. The company signed an agreement last July to divest its Mining Systems operations to the private equity company CoBe Capital, but the deal fell through in January this year.