Another mining services company has been placed in administration as the resources industry continues to taper off from its heights.
Mining equipment services company Minecorp was placed in administration last week, after months of downsizing and a failed recapitalisation bid. The company’s assets, including the name and brand, have been sold to international entity RMA Group – the company will continue to trade under the Minecorp name, and will retain all current employees.
The collapse follows several others in the mining and resources industries. Smaller businesses focused on exploration and equipment have suffered.
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Minecorp, which focused on mine vehicle safety products and “fleet safety solutions”, was even featured in the Telstra Business Awards and the BRW Fast 100. However, general manager Keith Bailey told SmartCompany this morning the business was struck by the sector’s ongoing weakness.
“The mining services sector has seen revenue decline aggressively from late last year,” Bailey says. “Minecorp had done various things to resize and realign, but that weakness continued.”
The business currently has 70 employees, but that figure is down significantly from the company’s peak. Bailey says the business even attempted a recapitalisation effort, but was ultimately unsuccessful.
“The best commercial decision available was being able to sell the assets of the business to RMA.”
RMA provides products and services to “economies in transition”, with clients often including government agencies, aid and relief groups.
The company also claims to be a “specialist provider of infrastructure solutions”, which Bailey says provides a good fit with Minecorp.
The development comes after several other collapses in the mining industry. Last week, Mining Equipment Maintenance – which turned over more than $26 million a year – was also placed in administration.
Analysts expect more pain in the mining services industry. Recently the Productivity Commission released a report stating there had been a drop in the number of micro businesses starting in the mining industry.