We’re all well aware that the majority of Australian mineral exports go to China, but Aussie’s aren’t the only ones profiting from the resource boom. The Chinese are well known for cheap manufacturing of all kinds of consumer goods, from cars to electronics, and furniture to tyres; so we shouldn’t be surprised that they’re making a lot of our mining machinery and equipment. Exports for many mining companies are at the highest levels ever, and many savvy Chinese companies are also joining along for the ride. This is especially true when it comes to the equipment that needs constant replacement in the mining industry, especially mining truck tyres and machinery parts.
With low labour and manufacturing costs, the Chinese have perfected mass production on an enormous scale. Their ability to manufacture on such a level and export all across the globe has given them a huge advantage in many markets. This competitive advantage has seen many Australian mining companies contracting with Chinese tyre and machinery companies for regular imports of replacement parts. Because mining trucks and machinery work on such a grand scale they are constantly in need of replacement parts. This can be hugely expensive for such massive machines, so cheap Chinese tyres and equipment that are now being built to the same standard as locally produced items have become popular sellers in our mining towns.
Companies like Triangle Group have been leading the way with their OTR (Off The Road) truck tyres. Triangle were the first company based in China to offer mining truck tires for export. Manufacturing of Chinese OTR tyres was started by Triangle Tires in 2002 and since then the market has increase exponentially. So lucrative has the export mining truck tyre become that several other Chinese tyre manufacturers like Taitong, Copartner, Aufine and Boto tyres have all reported growth every year over the last decade in OTR sales.
The market for mining truck parts is equally as competitive and hundreds of China’s best component and engineering companies battle to take market share in this highly profitable industry. So lucrative has it become that almost all of Australia’s OTR tyres are now sources from overseas countries like China, and distribution companies have been erected just to cash in on the booming China export market. Wholesaling companies the specialise in Chinese Tyres have become a whole industry upon themselves, as everyone involved want to take a piece of the mining revenue pie.
In a globalized world, the profits from our Australian resources really do get shared around. Without the Chinese involvement in maintaining our machinery and trucks, we wouldn’t be able to continue such efficient output from our mines. Essentially, by buying cheaper truck parts and tyres from the Chinese we’re able to keep costs down so we can export at a lower price to the industries in China who have such an insatiable demand for our ores and minerals.
Next time somebody tells you the Chinese are driving the mining boom, you’ll know it’s the god honest truth, in more ways than one.