Weir exits oil, bolsters mining division
Sees mining as key to a sustainable earth, company's future Metal Tech News – October 7, 2020
Last updated 10/20/2020 at 5:07pm
Towards its strategic transformation into a premium mining technology products and services company, Weir Group PLC Oct. 5 announced it is selling its entire oil and gas division to Caterpillar Inc. for US$405 million in cash. Combined with its sale of its downstream oil and gas division in 2019, the Caterpillar transaction will complete Weir's strategic exit from the petroleum sector.
"We are pleased to have reached this agreement that delivers a great home for the oil & gas division and maximizes value for our stakeholders," said Weir Group CEO Jon Stanton. "Alongside the previous sale of the flow control division and the acquisition of ESCO, it is a major milestone in transforming the group into a focused, premium mining technology business."
Founded in 1871, Weir is a Scotland-based engineering firm focused on providing its clients solutions to improve safety, efficiency, and sustainability.
Traditionally, the global engineering firm with roughly 15,000 employees in more than 50 countries has primarily worked in three large economic sectors – oil and gas, infrastructure, and mining.
Weir now is adapting its business strategy to a world demanding more minerals and metals for its transition to low-carbon energy and transportation, along with the mining sector's increasing uptake of new technologies.
The 149-year-old firm already provides a wide range of products and services to the global mining sector. Automation, pilot processing plants, site-specific mine dewatering systems, products for crushing and classifying ore, and tailings management solutions are on a long list of services and products offered by Weir's minerals team.
"Weir is ideally positioned to benefit from long-term structural demographic trends and climate change actions which will increase demand for essential metals that must also be produced more sustainably and efficiently," said Stanton. "This will require the innovative engineering and close customer partnerships that define Weir, and it is why we are so excited about the future."
Weir's strategic transition to this mining focused future began in 2017, when the company announced that it would be allocating the bulk of its capital spending toward its mineral division.
This decision to invest heavily into mining was part of a strategy to keep Weir aligned with the structural trends that will shape the world in the decades ahead.
Stanton says these trends begin with the increasing natural resources essential to the growth and urbanization of the global populace, especially in developing countries, alongside the growing minerals demand being driven by renewable energy and electric vehicles.
"So, the metals we help produce, including copper, our largest exposure, are absolutely critical to that transition," he said.
With these metals harder to come by due to a number of factors, including lower ore grades, coupled with a world that demands they be produced more sustainably, Weir says the mining sector will increasingly need the engineering solutions and products it has to offer.
"From extraction through tailings management, we have a range of solutions that will make mining operations smarter, more efficient, and sustainable," said Stanton.
The sale of Weir's oil and gas assets to Caterpillar will provide the cash and ability to focus on the firm's "strategic transformation into a premium mining technology pure play."
Weir expects the sale of its oil and gas assets to Caterpillar to close by the end of the year.