Construction equipment maker Caterpillar Inc believes demand for critical minerals as the transition to clean energy accelerates will result in solid returns for its mining business, chief executive Jim Umpleby said in an interview.
The company is aiming for a global energy transition infrastructure market of around $5 trillion between 2021 and 2040, Umpleby said.
“Investment in the mining sector has been relatively weak in recent years and we think it will increase,” he told Reuters after a day of meeting with investors at the company.
Executives have confirmed that the heavy machinery, engineering, energy and transportation services giant aims to generate $28 billion in annual revenue by 2026.
Growing demand for minerals will expand targeted global marketing of renewable energy, Umpleby said. This requires more mining hardware, which gives us the opportunity,” he said.
Mining capital spending in 2022 has already surpassed the previous seven years, and this trend is expected to continue as companies reinvest in their fleet to replace aging equipment to improve operations.
Caterpillar’s total cash flow from capital expenditures rose to $346 million in the first quarter of 2022 from $252 million in the same quarter last year, and the company has invested in technologies for scalability, artificial intelligence and environmental, sustainability and management services.
On Tuesday, the company’s board of directors approved a new $15 billion share buyback. The share of news increased by 2.1%.