How online heavy equipment sales benefit mining businesses

While the global mining market is forecast to grow to $2.7 trillion in 2027 at an impressive CAGR of 6.7% according to a recent report, head winds are facing the industry with challenges like many other industries resulting from the lasting economic effects of pandemic lockdowns, a stricter regulatory environment and increasingly volatile market conditions.

Many mining businesses that are replacing older equipment and trucks with newer models face disposition challenges. The selling process can take up more time and effort than desired. Finding good buyers and achieving good returns for their mining assets is not always easy.?

Regional differences in equipment supply and demand

As a globally connected industry, significant regional variations in mining machinery and equipment supply and demand exist, creating price disparity in various local markets. For instance, the closure or decommissioning of a major mine in Australia may mean an oversupply of mining trucks or ADT’s in the Australian market, which can influence demand and price levels. However, at the same time, an increase in mining activity on the other side of the world in South Africa or Peru, may mean a shortage in those markets with mining operators willing to pay a premium for work-ready equipment. With international shipping rates now falling and largely returning to pre-pandemic levels, there are more cases where shipping equipment across the world from buyer to seller is a viable option.

In short, it is important to view the secondary equipment and machinery market in its entirety as one global business, and not focus on any one local market.

The downsides of selling locally?

When selling machines privately in the local market, companies can spend an enormous amount of time and energy on marketing, buyer enquiries, inspections, price negotiations, documentation and more. Placing advertisements or enlisting a local dealer can be time consuming and often limits the exposure to only a local audience of buyers at prevailing domestic market values.?At Ritchie Bros. we ask some of our mining clients:

“why limit yourself to a local market happens to be located, when you can work with a partner that provides direct access a global audience of buyers?”?

This raises the question of which selling methods are being utilised by savvy mining companies to dispose of surplus equipment. More importantly, how to achieve the highest market value possible in the global equipment market to fund the purchase of new equipment or reinvest elsewhere to grow the business.

Making the switch to online

More mining operators and equipment sellers than ever before are turning to online disposition solutions, such as online auctions, marketplaces, and listing websites. Ritchie Bros. offers several of these that help promote assets to a global audience of buyers where equipment can be quicker sold online and shipped to offshore buyers. This kind of international exposure can lead to stronger asset pricing since more buyers viewing your equipment can lead to increased price competition between bidders around the world.

In this piece, I will take a closer look into the range of online asset disposition options open to mining operators when selling surplus equipment:?

Choosing the right selling channel

The key to success is choosing the type of auction service that works best to meet your asset disposition goals:

1. Sell fast and certain at online auctions

If you want to achieve maximum exposure for your equipment and a quick and certain selling process, then probably unreserved online timed auctions are your best option. For example, Ritchie Bros. Online Timed auctions are held regularly on set dates in Dubai, servicing online buyers across the Middle East, Africa, Indian Subcontinent regions and internationally.?

Ritchie Bros.’ most recent December Dubai online auction attracted international buyers from 69 countries including Kuwait, India, USA and more, with 72,744 online page views and over 1000 items sold, further confirming widespread buyer acceptance of online auctions.

2. Sell with assistance and control over price

Marketplace-E, also operated by Ritchie Bros., is an always-on marketplace with selling assistance. You can set a minimum price so you have control over the selling price and process. Marketplace-E is a 24/7 online listing site for both global sellers and buyers. In this online marketplace, items can be listed quickly and promoted to an international audience of online buyers.?

Selling from any location in the world

One of the benefits of the Marketplace-E digital selling solution is that equipment can be sold from the consignor’s location or one of Ritchie Bros.’ local yards. This way, you can save cost on transportation and have the option to sell from anywhere in the world.

How to instill buyer confidence online?

A common question that I receive about online auctions is how online buyers around the world understand and verify the condition of items sold. Detailed inspection reports have been a gamechanger for the online auction business because we all know it’s possible to achieve a higher selling price when buyers understand exactly what they are buying. Ritchie Bros. offers professional inspection services to promote stronger buyer confidence. Online buyers can review extensive photos and guaranteed inspection reports – backed by IronClad Assurance – increasing buyer confidence even when assets are being purchased on a ‘sight unseen’ basis. With our online auctions interested buyers can come and view the items in person to get a close look.

Continuing supply chain issues driving up demand

Good news for businesses looking to decrease their mining equipment fleet, is that buying brand new machinery is expected to remain challenging into 2023 with original equipment manufacturers still struggling to fulfill new equipment orders while demand continues to rise, resulting in delivery delays.?

Overseas equipment buyers are being more creative in how they bridge equipment shortages,?such as buying used machinery from online auctions and other online marketplaces. In short, it could be time to act for mining equipment operators looking to dispose of an ageing fleet as this may result in higher pricing for work-ready equipment.?

Come and see Ritchie Bros. at Mining Indaba 2023?

If you are looking for heavy equipment buying and selling channels, market and equipment insights, inventory management software, or logistics, come to meet our team at the Mining Indaba show in Cape Town, South Africa, 6-9 February at stand L48.?

Already, sellers are consigning machinery and equipment for the next Ritchie Bros. Dubai Online Timed Auction, which will take place in March 2023, with bidding opening on March 14, and ending at staggered times on March 20 and 21.?

For further information on Ritchie Bros. suite of selling solutions and a complete list of equipment available, visit?rbauction.com/dubai.?