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Grey market makes mining gear-makers see red

November 26: The grey market for spare parts is posing serious challenges to the mining equipment manufacturing industry globally, sources have informed ICMW.

Worldwide, 30-35% of the business is in the hands of these spurious manufacturers, industry sources said, adding that in India, this figure will be even higher.

A domestic player said the market for spares in India has increased to $22-23 million from the earlier $15-16 million. And, this figure pertains only to surface mining, adding that most of the spurious components are sourced from China.

While most of the global players focus heavily on the components replacement market, they said there are challenges here too.

“There are spurious manufacturers who have copied our components but offer inferior quality which affects the performance of the machine to a large extent,” informed a mining equipment manufacturer with a global footprint.

Another player said: “We innovate and improve on existing machines. But spurious parts sell in the market because, obviously, they are cheaper.”

It becomes obvious that large players can have a chance to sell spare parts only when spurious players are barred by the buyer from quoting against any requirement.