Online Auctions

Continued momentum with listed mines and foreign buyers

Online auctions gain momentum
online auction.jpg

According to the “World Economic Outlook Update” published by the International Monetary Fund in January 2013, the world economy is projected to grow 3.5% this year and 4.1% in 2014. Extracted from a recent United States article by J. Nielsen, demand for equipment is invariably correlated with economic activity.

As the economy moves toward an upswing, so more construction projects receive the go-ahead, meaning contractors need to purchase new equipment. When this happens, old fleet is effectively sold to make way for new stock.

Globally, the used equipment market generally tracks the new equipment market approximately 1:1.

In South Africa, mines continue to evaluate ways to enhance their disposal strategies for greater outreach and asset monetisation. ''They are effectively looking to boost their balance sheets and redress means to clean up redundant assets,'' says Ariella Kuper, managing director of leading online mining auction house, Clear Asset.

Technology has long been seen as an enabler to push frontiers in new business and, with South Africa being by far the largest market for mining equipment in the African/Middle East region, and the seventh largest mining market in the world, substantial opportunity exists for creation of a sustainable marketplace to trade.

''International online sales continue to accelerate rapidly, with traditional physical auction giants such as Ritchie Brothers adopting and utilising the online space more and more. Dedicated online specialists such as Iron Planet (whose investor list includes Accel Partners, Kleiner Perkins Caterpillar, Komatsu and Volvo) continue to gain market share, moving in excess of $600 million online per annum.''

As evident with local online mining auction house, Clear Asset, such utilisation of technology to trade across borders is certainly paying off. Its most recent mining auction on 9 May 2013 for Xstrata Alloys and Diesel Power Open cast mine again secured international sale success, with confirmed sales of R13.4m and 56% foreign buyers.

This follows what appears to be a sustainable trend as Clear Asset's March auction produced sales of R13m with  71% being foreign sales, and the group ended 2012 with R39m in sales with 46% being foreign buyers.

Clear Asset’s next auction, closing on 4 June 2013, will take place on behalf of three Anglo American Platinum mines, namely Mogolakwena, Tumela and Khusuleka mines - offering a wide range of vehicles and yellow metal equipment. Items include several CAT D9Rs, CAT 785B/C bowls, a Liebherr mobile crane LT1120, EJC 145E LHD, Boart Longyear grader, Boart Long Year load haul dumps, numerous Toyota light-duty vehicles and Mercedes-Benz & Iveco buses.

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