At the cutting edge
Nic Dinham
Open day: MDI hosted an open day in September 2024 to allow stakeholders and investors the opportunity to examine and better understand the new technologies it is developing, both directly or through the A&R Group.
Where from: Over 15 years ago, MDI was a contractor that bought Raise Bore (RB) machinery from OEMs. Over time, it has expanded its skills to be able to design and continuously improve its machines at a fraction of OEM prices.
RB dominance: As a result of its technical innovations and its ongoing operating experience, MDI now has the largest RB fleet in the world and can offer Tier 1 clients the best-in-class RB performance and safety metrics.
MTB Gen1: The MTB is an example of engineering technology that MDI has supported over the past five years. To date, the MTB is still an unproven technology in the mining industry and its application is not universal.
MTB Gen1 upgrades: MDI has made significant changes to the support and hardware of the latest version and expects the upgraded version to advance at 120m/mth-150m/mth, an up to 50% improvement on the previous version.
SBS: Although the MTB may be fading as a pivot for MDI, the SBS technology could be a potential game changer for both the global mining industry and MDI. The potential ability to dramatically improve shaft sinking rates into virgin ground promises exceptional contractual rewards.
SBS Prototype: Five years after testing its initial cutter design, MDI started trials with a narrow diameter (4.3m) SBS prototype near Fochville in August 2024. Progress has been slow and the project has experienced teething issues.
SBS and MTB evolution: Neither the MTB nor the SBS are proven technologies. The MTB will have to build kilometres of tunnels and the SBS at least one deep, narrow diameter shaft at their promised advance rates. Only then can a large diameter SBS be trialled for applications which will likely have strong demand.
Technology funding: Since the MTB and SBS may need further development before they mature, they will probably require clients/partners to share the funding and performance risks, ideally through contracts or SPVs.
A&R Group: The group builds proximity detectors (PDs) as well as RF networks for underground mines that allow faster discovery of missing workers Improvements in the data carrying capacity and robustness of its transmitters may, in time, allow for remote operations of all machinery in the mine. Demand for the PDs has been supported by SA legislation.
Valuation: Our MDI valuation remains unchanged. Our DCF-based valuation has a base case of R12.58/s and our speculative case, which includes the possibility of the MTB returning to production in the next 12 months, is R14.14/s.
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