With the role of coal diminishing in the world’s energy future, why would Komatsu Mining Corp. — which is historically known for manufacturing coal-mining equipment — invest $285 million in a new plant and offices in Milwaukee?
The answer is that the company that makes legacy P&H surface-mining equipment today sells less products for coal mines and more for mining minerals, executives said Monday during a ceremony celebrating the opening of the facility in Milwaukee’s Lake Michigan harbor district. Those very minerals are used for fast-growing product categories in renewable energy and electric vehicles, executives said.
“Our business is being driven by renewables,” John Koetz, president of surface mining at Komatsu, said during a Q&A session with reporters. “Renewable energy is intensive both in batteries as well as wind power and solar — the need for all of those metals. That is what’s really driving growth.”
Copper mines, in fact, represent the largest part of Komatsu’s mining customer base with iron ore also ranking high, Koetz said. Other metals are growing in their importance as customers as well, he said.
Several dozen people attended the ceremony outside Komatsu Mining’s new campus including top Komatsu executives from Japan and the United States, Wisconsin Gov. Tony Evers and Milwaukee Mayor Cavalier Johnson. Parent company Komatsu Ltd. is based in Tokyo and CEO Hiroyuki Ogawa participated in the event saying the investment in the Milwaukee campus fits the company's growth strategy.
Also there were representatives of Milwaukee firms that worked on the project: Hunzinger Construction, EUA and GRAEF, as well as state and local economic development leaders and University of Wisconsin-Milwaukee chancellor Mark Mone.
Another question facing the mining industry and the world economy is an impending recession.
When asked about that, Rod Schrader, CEO of Komatsu America Corp., said demand for the company’s products remains strong in North America.
“But there are significant headwinds of inflation and labor,” Schrader said. “So we’re watching very carefully the marketplace, talking to our customers — and our customers' customers — to understand what’s ahead of us. We do have some concern, but I would say right now demand is quite strong.”
Komatsu has started manufacturing mining shovels and mining equipment in its new 430,000-square-foot plant. The company continues transferring manufacturing from its old plant in West Milwaukee.
The new 180,000-square-foot office and lab facility opened in fall 2021, replacing space the company leased in the Honey Creek Corporate Center in Milwaukee’s far west side.
The company has a goal of ultimately employing 1,000 people at the new complex. If Komatsu reaches that number, it will be eligible for up to $59.5 million in state tax credits.
Komatsu also has been awarded $1.7 million from the state for railroad and road improvements serving the new plant.
The city of Milwaukee created a tax incremental financing district for the project that will provide up to $25 million in funds to Komatsu if the company achieves its employment projections.