TAKRAF

By: Matt Edgar Issue: Rebuilding Our Infrastructure Section: Business

Heavy Equipment for Extreme Infrastructure

In the earliest part of the Iron Age in Europe, iron was smelted from ore found in bogs and swamps in Germany, Scandanavia, and the Netherlands. Bog iron is somewhat resistant to rusting due to residual silicates, and has been used in art, architecture, tools, and weapons for over two millennia. In 1725, the Baroness of Löwendahl and Augustus II the Strong started a foundry, which smelted bog ore to be used in the production of iron art castings in Lauchhammer, Germany. The foundry eventually transformed into a construction factory, and TAKRAF, one of the world's leading manufacturers of heavy surface mining and transportation equipment, was born.

Eighty years after its founding, the company was commissioned to work on the first steam engine in Cure-Saxony, and from there, became focused on mechanical engineering and production, building water wheels and machines. As the end of the 19th century neared, TAKRAF moved to Leipzig, one of Germany’s larger industrial cities at the time. During this period, the company became more invested in mining, bulk material handling, crushing and conveying. Within 50 years, the TAKRAF name was officially established and became the leading manufacturer of mining systems and equipment.

Prior to the end of the cold war, the firm was one of East Germany’s largest industrial companies. The company specialized in open pit mining infrastructure, cranes, and bulk material handling. After the re-unification of Germany, the MAN Group, a $20 billion leading European industrial player in transport-related engineering, bought TAKRAF and helped give the company a worldwide platform. TAKRAF USA was founded in 1994 in the Denver Tech Center and was TAKRAF’s first international subsidiary. The company went through another change when the Techint Group, another massive $28 billion worldwide group based in Milan and Buenos Aires, purchased the firm in 2007 and merged them with Techint’s material handling division Italimpianti, forming Tenova TAKRAF.

TAKRAF USA services open pit mining infrastructure in both North and South America. Its equipment is used in some of the most extreme climates of the world, servicing the northern tundra of Canada, the high mountains of Chile and Peru, and the deserts of Mexico. The equipment itself is some of the biggest pieces of machinery in the world. For example, the F60 conveyer bridge is 502 meters long and holds the Guinness World Record as the largest moveable object in the world. The equipment is commensurate with the large volume and needs of the mines that they service. TAKRAF crushing and conveying systems are currently being used in Chile’s Escondida Mine, which is the largest mine in the world.

Because TAKRAF’s equipment provides vital infrastructure for mega mines, there are big dollars at stake. Thomas Gramling, executive vice president and director of TAKRAF USA, explains, “In our business, we deal with base metals such as lead, iron ore, molybdenum, copper and precious metals like gold. All of our equipment is used on critical paths of production, from crushing the source ore to conveying the materials. It must be durable to operate in extreme locations, but also efficient and easy to maintain because it operates at the top of the industry in terms of tonnage. Gramling explains, “The temperature in Canada can get down to -40 degrees Fahrenheit, so ease of maintenance is important.” He goes on to underscore the importance of TAKRAF’s equipment running smoothly by pointing out that every hour that a world-class mine is shut down they can “lose millions of dollars in gross margins.”

TAKRAF views its client relationships as long-term partnerships built to service a premier customer base. A mine can last 20-40 years depending on the ore body, so the company will be involved in the mine in some capacity whether it’s equipment, engineering, retrofitting and more for decades. Clients served out of the Tech Center office include BHP Billiton, Rio Tinto, FreePort McMoRan, Groupo Mexico, and Goldcorp. These are, “leading edge clients with high standards, and they have great expectations for their partners,” according to Gramling.

Over the next few years, TAKRAF plans to capitalize on the booming mining market as rates of precious metals continue to climb to record-setting numbers. In an effort to increase mine supply and efficiencies to meet the increased demand, TAKRAF clients are interested in increasing capital expenditures on capital projects, boding well for TAKRAF, which will be involved in many of these capital projects.

TAKRAF USA is on track to have a record revenue year in 2011 and doesn’t foresee growth slowing in the immediate future. Gramling sees big potential in the U.S. coal market, especially in coal exports, and expects to see an increased need to export coal to the BRIC countries like India, China, Russia, and Brazil as they stoke their economies. Since some of these U.S. coal facilities are at maximum capacity, outdated, or both, TAKRAF can assist in the capital projects required to increase capacity, retro-fit or build new coal terminals, loadout and port facilities, so U.S. coal mines can meet the projected demand for exports.

Matt Edgar is a contributing writer for ICOSA. He is the owner of Community First Commercial Real Estate, a Denver-based Tenant Representation firm. Matt can be reached at 720.435.2191 or [email protected].