MacKellar Mining excavator entrance with Liebherr pays off

MacKellar Mining took a punt when the mining industry was waiting for the start of a recovery in 2016.

Australian mining may still have its challenges today, but market conditions have improved considerably from where they were two years ago.

In early 2016, commodity prices were yet to bounce back after an extended period in the doldrums and investment was at its lowest level in years.

This challenging environment didn’t, however, stop MacKellar Mining from entering the large excavator marketplace for the first time in the company’s 40-plus-year history as a provider of earthmoving equipment.

The company demonstrated that investment, even during mining’s down cycles, could prove beneficial and pave the way for growth opportunities when the market did turn.

Historically, Maroochydore-based MacKellar Mining had focused on dump trucks, loaders and smaller diggers instead of large excavators.

This emphasis shifted in April 2016 when Mackellar Mining took control of a Liebherr R 996B, the second largest machine in the German manufacturer’s excavator range.

By adding the R 996B, a 672t machine with a 36m3 backhoe bucket, MacKellar Mining diversified into a new equipment class that complemented its range of dump trucks, including the Cat 789C.

The acquisition has been rewarding, particularly as commodity prices started their well-publicised rise just a few months later; meaning demand for machinery has increased.

MacKellar Mining’s purchase of the Liebherr excavator two years ago has become the first of many, with the company placing an order for a fifth machine in May.

Duncan MacKellar, managing director of MacKellar Mining, says the addition of the R 996B excavators has proven to be a complementary move for the company’s fleet. However, he admits it was a risky decision back in 2016.

“Historically, the business, which was started by my father (Alastair MacKellar), has steered clear of large excavators because they are high in maintenance and costly to move. So there was a bit of risk involved around taking the excavator as a contractor,” Duncan MacKellar tells Australian Mining.

MacKellar Mining’s four R 996Bs are all operating in well-known mines in Queensland’s Bowen Basin coal sector, including the first machine at Sojitz’s Minerva operation.

Yancoal, a long-term client of MacKellar Mining, has two of the machines; one at the Yarrabee mine, and the other at the Middlemount joint venture with Peabody Energy. Junior miner Batchfire Resources is using the fourth R 996B at the Callide operation.

“The feedback (on the excavators) has been very consistent,” Duncan MacKellar continues.

“Liebherr has provided a very high quality of fitter and support staff that are available to service the machines.

“Their field service is exceptional, the availability of their people has been great, their parts solid and the quality of the local management in Mackay has been strong.”

As MacKellar Mining has grown its fleet of Liebherr excavators, the company’s partnership with the manufacturer has also developed.

MacKellar Mining and Liebherr, while being companies of contrasting scale and originating from different continents, have found they share similar organisational values, particular as family-run and grown companies.

Liebherr Australia general manager – sales and marketing Tom Juric says the relationship between the two companies has “gone from strength to strength” since 2016.

“At the beginning you are always a bit unsure about new people you have never done business with, but I would have to say from the get-go we have viewed MacKellar as a long-term strategic partner,” Juric tells Australian Mining.

Juric believes MacKellar Mining’s entry into the large excavator sector may have surprised some, but it has turned out to be a smart move.

“Back then the market was pretty down, it wasn’t a good time in mining, so it was really surprising to see these guys take that sort of a punt in 2016,” Juric recalls.

“It was during 2016 that the machine went to work and then the market started to turnaround – MacKellar must have known something that the rest of us didn’t.

“We are absolutely rapt with the timing of the deal and that MacKellar has expanded with additional excavators since then.”

The partnership has also extended beyond the excavators, with MacKellar Mining adding the recently released Liebherr PR 776 dozer to its fleet.

Duncan MacKellar is full of praise for how Liebherr responds from an after-market service perspective to satisfy the mine operators using the excavators or dozer.

“For a contractor that is critical when choosing a piece of equipment as It opens up a lot more options if you have to place a machine elsewhere,” Duncan MacKellar says.

MacKellar Mining’s move into the large excavator equipment class followed another significant expansion four years earlier.

The company partnered with Spanish contractor EPSA Group in 2012 to form MacKellar EPSA, a new services company that broadened its offering as a contractor on a global scale.

The partnership allowed MacKellar Mining to combine its local knowledge with EPSA’s international strengths, diversifying it further into the mining services and civil and infrastructure earthmoving markets.

MacKellar EPSA has delivered a variety of projects, including dozer push operations, coal mining services, mineral sands mining services and large volume bulk earthworks for highway upgrades.

As a mining contractor, MacKellar is providing services for Batchfire at the Callide operation. The company has also started to build a presence in the civil sector on major projects in Queensland.

Juric believes development like the EPSA partnership, as well as the expansion into larger excavators, has strengthened MacKellar Mining’s reputation.

“It has established Mackellar’s credentials as all-round mining contractors … not just a company that dabbles in a certain size of contract,” Juric says.

“These guys can perform at the small end of the scale right up into bulk work, which has traditionally been dominated by fairly large, listed contract miners.”

With a fleet now featuring around 280 pieces of equipment, Duncan MacKellar is hopeful the uptick in the mining market over the past 18 months continues.

He says recent signs suggest the buoyancy of the mine owners will flow over to equipment and services companies like MacKellar Mining.

“My view is that commodity prices and the industry have been on the up for 18 months, but there was a good six months of cautious optimism, even six to 12 months. It is really now that those prices have stabilised but it has been that way for up to 18 months,” Duncan MacKellar says.

“As a contractor there has definitely been a significant lag in that upturn to correlate to equipment rates.

“Now everyone is going ‘okay, this looks like it has settled down and we should be in a reasonable position for another cycle’, however long that may be.”

If the growth in MacKellar Mining’s fleet of Liebherr excavators is any guide, however, then the cautious optimism has also become genuine for this industry partnership.

This article also appears in the August edition of Australian Mining.