OTR tire shortage could hinder mining boom

Jan. 4, 2006

"We may be looking at 10 years of growth" in the mining industry, according to Michelin officials. But a lot of that will depend on the availability of large OTR tires.

"We think we're looking at a mega-cycle (in mining activity)," says John Funke, director of sales, mining, for Michelin North America Inc.

"In the past, the cycle was six years of growth and four years of drop-off."

Soaring commodity prices are driving increased mining activity throughout the world, according to Funke.

However, current demand for large OTR tires by mines, construction companies and other end users "is 25% to 30% greater than the industry can deliver."

Last month, Michelin announced that it will invest $85 million into its OTR tire plant in Lexington, S.C., over the next five years.

"There's been reactivation of some closed mines in the U.S. and Canada, but they can't flip the switch overnight. Growth is limited by available resources, one of them being tires."