Boart Longyear Ltd., the world’s biggest provider of mineral drilling services, expects demand to remain strong as large mining companies proceed with projects.
“We still see very strong demand, particularly from the majors,” Craig Kipp, chief executive officer of the Salt Lake City, Utah-based company, told reporters today in Sydney. “We haven’t heard from a lot of the majors outside of Australia that there’s a change in their plans or in their budgets.”
Mining companies will probably boost exploration spending as much as 15 percent this year from a record $18.2 billion last year, Halifax, Nova Scotia-based Metals Economics Group said in a March report.
“We haven’t seen any change in market dynamics - we’re operating all over the world,” Kipp said. “We do see that juniors, the second-tiers, have had problems getting financing.”
Kipp’s comments comes after Jac Nasser, chairman of BHP Billiton Ltd., the world’s biggest mining company, said yesterday the company won’t meet its target of spending $80 billion on new mines and asset expansions over the next five years. BHP expects commodity prices to decline, Nasser said. Prices have fallen 12 percent from this year’s high in February, according to the Standard & Poor’s GSCI Spot Index of 24 raw materials.
Boart Longyear forecasts $460 million in earnings before interest, tax, depreciation and amortization this year. The shares rose as much as 4.5 percent to A$3.26 and traded at A$3.19 as of 1 p.m. in Sydney. The benchmark S&P/ASX 200 Index fell 0.6 percent.