The mining industry moved too far too fast on elevated
Chinese demand. Now, miners are pulling back—that's left equipment makers like
Caterpillar (NYSE: CAT ) with little
choice but to follow suit. However, as the excesses are cleaned up, the
foundation of a rebound is being built.
Coal miner Cloud Peak Energy (NYSE: CLD ) has managed to remain profitable while most
of its competitors have been bleeding red ink. The company's well situated
mines in the ultra-cheap Powder River Basin are one big help. But so are the
company's cost control efforts.
For example, the miner reduced its capital expenditure
budget by over 35% this year. Cloud Peak managed this by doing some of the
obvious things, like delaying projects. But it has also been extending the life
of its equipment and buying used instead of new. Caterpillar noted this
industrywide trend. Read more
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