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Caterpillar eyeing energy transition for better prospects in mining

Caterpillar eyeing energy transition for better prospects in mining
  • The company aims to capture a majority share in the global energy transition market that is worth USD 5 trillion.
  • The annual revenue budget of Caterpillar’s energy, machinery, and transportation services is likely to increase to USD 28 billion by 2026.
Caterpillar Inc. expects the demand for critical minerals to turn into sound returns for its mining business after its much-awaited clean energy transition picks up pace, according to the company CEO & Chairman Jim Umpleby. Moreover, the heavy machinery giant is reportedly aiming to capture the majority share in the global energy transition industry which is currently worth USD 5 trillion. Umpleby stated that mining capital expenditures have been under restraint over the last few years and will continue to depict similar trends in the subsequent years. However, the annual revenue target of Caterpillar’s energy, machinery, and transportation services is expected to increase to USD 28 billion by 2026. To that effect, Umpleby cited that the rising demand for minerals among consumers is expected to expand the total available market in renewables as well as require more mining equipment to provide for a much-awaited opportunity. It is worth noting that the capital expenditures for mining, this year, have surpassed the record of the last seven years. This trend is anticipated to continue further as companies reinvest their capital amount in replacing the obsolete machinery & equipment to step up the operations of their units. Caterpillar’s overall cash flow for capital expenditures spending increased from USD 252 million in quarter one last year to USD 346 million in the same quarter this year, as the company focused on investing more towards the environment, governance & sustainability services, scaling tech, and artificial intelligence. Meanwhile, the major American construction manufacturer’s board has reportedly approved a new USD 15 billion share repurchase program, with Caterpillar shares surging 2.1% in premarket trading. Source Credit: https://money.usnews.com/investing/news/articles/2022-05-17/caterpillar-eyes-energy-transition-as-growth-driver-for-mining-business  

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Anjali Mishra

Anjali Mishra

A postgraduate in Criminal Law, Anjali Mishra uses her analytical skills to understand and write about all things market. Anjali holds a keen interest in writing insightful articles on healthcare, business, finance, and emerging technologies for AlpenHornNews and numerous other portals. Coming from outside the economical milieu, Anjali aims to write in a way that helps readers with non-technical knowledge understand technical concepts with ease.