Sandvik initiates divestment of mining systems unit

1 October 2015 (Last Updated October 1st, 2015 18:30)

Sweden’s engineering group Sandvik has announced its decision to initiate divestment of the mining systems unit.

Sweden's engineering group Sandvik has announced its decision to initiate divestment of the mining systems operations.

A separate product area within Sandvik Mining, the mining systems business supplies design and engineering of material-handling systems for the mining industry.

The business reported annual sales of Skr6.3bn ($750m) last year, representing 7% of Sandvik Group invoicing.

"Divestment of mining systems will make Sandvik Mining more focused on its core operations, mining equipment and aftermarket offerings for both underground and surface mines."

Sandvik CFO and acting president and CEO Mats Backman said: "Divestment of mining systems will make Sandvik Mining more focused on its core operations, mining equipment and aftermarket offerings for both underground and surface mines, which Sandvik will continue to develop to ensure long-term value creation."

The operations will be reported as discontinued in the Sandvik Group financial statements from the third quarter and until the divestment process has concluded.

According to the company, a Skr1bn ($119m) nonrecurring charge related to mining systems will impact the result for the third quarter this year.

The company recently announced its decision to maintain its operations in Turku, Finland, following further investigation of the competitive landscape and the market situation.

In June, Sandvik said it will close the Turku site, which was part of the company's previously communicated supply chain optimisation programme.

As of last year, global company Sandvik reported annual sales of approximately Skr89bn ($10.5bn).