Supplying the sustainable mine of the future

Sandvik has opened a new production unit in Malaysia to increase its ability to manufacture underground loaders and trucks. While diesel equipment will also be produced at the new facility, it is primarily focused on meeting the growing demand from mining customers for battery-electric vehicles (BEVs).

Boosting BEV production capacity

Located in Seremban, the capital city of Negeri Sembilan state, around 70 km south of Kuala Lumpur, Sandvik is investing SEK 350 million into this project. Marking the importance of this investment for the region, the inauguration, on May 14, 2024, was attended by several senior local government officials, including the Negeri Sembilan First Minister Aminuddin Harun who officially opened the site.

“Malaysia is among the most technologically developed countries in Southeast Asia and has abundant skilled labor, strong local industrial suppliers and reliable infrastructure,” says Mats Eriksson, President of Sandvik Mining and Rock Solutions.

Our mining customers in Asia Pacific will enjoy shorter lead times for equipment manufactured to the same Sandvik standards for quality and safety.

A growing shift towards battery electric vehicles

The main Sandvik production site for underground loaders and trucks is in Turku, Finland. But with steady demand for traditional diesel operated units and a growing demand from customers for BEVs, a new production facility to complement the Turku site was necessary.

“The BEV market demand and interest has really been growing,” says Veli Olavi Kataja, the managing director at the Seremban factory. “So we needed more space to build the units and the battery cages. This is part of the global trend, with electric cars also taking off. Where new mines are being built, customers are clearly moving towards electric-operated equipment. It is a shift, and the shift is growing.”

Production has already begun at Seremban and it is due to ramp up over the coming year. “Our plan is to build 300 units yearly,” says Kataja.

I expect around 50 percent of these to be BEVs. If customers want more BEVs, then we will build more BEVs. This is absolutely enabling us to help customers move towards the sustainable mine of the future.

Advancements in battery technology

Sandvik has invested a lot of resources into its battery technology and has patented its own battery modules that will also be assembled at the Malaysian factory. “BEVs are way more effective than diesel units in terms of tons per load,” says Kataja. “And from a CO2 emission perspective, they are on a totally different scale. BEVs generally emit zero emissions. And you do not need to build the huge ventilation infrastructure that you do for diesel operated equipment. This reduces operational costs as well as CO2 emissions.”

Strategic location and flexibility

Spanning over 8,000 square meters, the factory comprises 15 assembly bays and a test track. But with the whole site comprising 60,000 square meters, there is room for considerable expansion, should the demand increase beyond current expectations.

“We have flexibility here,” says Kataja. “We began conducting studies two years ago on where to locate the new factory. Malaysia proved to be the best choice because of its low geopolitical risks, costs and its location close to some of the world’s major mining countries, such as Indonesia and Australia.”

Another factor in Malaysia’s favor is its high educational level. “We need to produce units with the exact same high-quality standards as in other Sandvik sites,” says Kataja. “So knowledge transfer and training is vital. This is the main reason why we are taking three to four years to ramp up production. We currently have 50 people at the factory and our total number of staff is going to be somewhere between 400 and 500. But we need to train them first, so training is a vital part of our investment for the future.”

The first vehicle being assembled at the new Malaysian factory is the Sandvik Toro™ LH517i loader. Production of Toro™ LH518iB, an automation-ready battery-electric loader, is due to begin by Q3 2025.

A milestone in sustainable mining solutions

“This expansion marks a significant milestone for Sandvik,” says Patricio Apablaza, President of the Load and Haul division at Sandvik. “This production unit enables flexible manufacturing of both conventional diesel and battery-electric loaders and trucks while adhering to our stringent global standards for sustainability, quality and safety.”