What mining slump? At Vegas show, industry's glass is half full

Fri Sep 28, 2012 4:07pm EDT
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By Ernest Scheyder

LAS VEGAS (Reuters) - Caterpillar Inc (CAT.N: Quote), Komatsu Ltd (6301.T: Quote) and other mining industry suppliers put on a brave face at a major industry conference this week, trying to stare down plunging commodity prices and shrinking mining budgets.

Executives chose to look beyond the short-term pain, telling 50,000 attendees at MINExpo, a Las Vegas convention for mining suppliers that takes place every four years, that their industry will survive the rough patch.

"I know there are lots of headlines out there that said mining is dead, not one more ounce of coal will ever be mined, iron ore will never come back, the world is going to stop spinning, it's over," said Doug Oberhelman, Caterpillar's chief executive. "Well, it's not over."

But it was a tough sell.

Caterpillar kicked off the week by slashing its 2015 earnings forecast. Joy Global Inc JOY.N then warned its mining customers will cut spending next year.

With iron ore prices at three-year lows and coal prices down more than 20 percent this year, MINExpo attendees couldn't ignore the storm clouds.

In China, the government's recently announced stimulus is already being criticized as ineffective. And one of the country's largest steelmakers, Baoshan Iron & Steel Co (600019.SS: Quote), suspended production at a key Shanghai plant on Thursday.

Australia's BHP Billiton (BHP.AX: Quote), the world's largest miner, decided last month to scuttle a $20 billion mine expansion in its home country.   Continued...