Joy Global at Morgan Stanley Conference Notes

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Ted Doheny – Executive Vice President, President and Chief Operating Officer

In the next 10-20 years hard rock mines will be going underground

“In the next 10 years to 20 years about 20% of the copper, the hard rock mines will be going underground. The easy stuff has gone and that’s where you’ve seen our acquisitions in the hard rock space as this market is converting from drill and blast operations to mechanized mining. ‘

Commodity prices reflect the supply/demand situation so for prices to stabilize you’re going to have to see something happen to either supply or demand

“The bearish tone was the reality. So, if we look out to the markets that we’re seeing prices are resultant of the supply and demand situation. So, if we have to wait for a pricing to move something has got to happen with the supply or the demand.”

There’s an oversupply of commodities

” looking at our various commodities around the world, there is an oversupply of the commodities through this huge ramp-up in commodities in the previous cycle. That’s got to be worked through.”

There’s been a lot of automation and mechanization in mining in the last 20 years

“part of what we’re doing in mining this same thing that happen in United States. If you went back 20 years in mining in the United States there’s 1,000 of people in mining. So part of what we done is bringing the mechanization and automation to mining which productivity very simply means doing more with less people.”

Stability in China rests on having jobs for people, which is a counterbalance to increased productivity

“So it’s going to be less people doing the work absolutely, which is a real issue in China right now because part of the stability of the China is jobs.”

We’re managing our cash aggressively

“we’re really aggressively managing our cash. We talked openly looking at the dividend going in the next year on the cash as well. That’s important to us when we did the dividend to show that we are a service company but it’s also important and keeping our investment grade rating. So as we’re looking next year with that step down, so we want to make sure we managed that part very carefully.”