Epiroc: Mining Picks and Shovels with Recurring Revenue from Green Metals

Epiroc doesn't just sell drills and loaders, it earns recurring margin through parts, repairs, rebuilds, and service contracts. Once a mine buys equipment, it enters a long-term ecosystem: replacement parts flow, technicians support operations, and digital monitoring locks in upgrades. This model stabilizes earnings even when equipment orders slow, keeping margins near 20% through cycles.

Epiroc operates 3,450+ automated machines globally, including 500+ autonomous surface drills and growing underground fleets. The platform works across brands, not just Epiroc equipment, so mines can automate mixed fleets, expanding addressable service revenue. Miners using autonomous haulage report 20% productivity gains, driving demand for both new systems and ongoing software contracts. Connected machines rose 29% to 15,000+ units, feeding real-time data that creates upgrade cycles.

Copper demand is surging, EVs need 2.5x more copper than gas cars, and the energy transition requires 54 new major mines by 2050. That means more drilling, more underground loading, and more battery-electric equipment to meet environmental rules. Epiroc holds the widest battery-electric equipment range in mining, with loaders offering 4-hour battery life and lower ventilation costs underground. Equipment orders rose 22% in Q4 2025, driven by electrification and automation upgrades

• Q1 2026 equipment order momentum confirms mining capex cycle acceleration: Epiroc reported 13% organic order growth in Q4 2025, with equipment orders rising 22%. Management expects mining demand to remain high through 2026, driven by copper and lithium project expansions. If Q1 2026 orders sustain double-digit growth, it signals the start of a multi-year capex cycle, supporting equipment revenue (34% of sales) and future service contracts.

• Chile's 13 copper projects worth $14.8 billion hit construction milestones in 2026: Chile plans to start seven copper projects in 2026, adding 500,000 tonnes of annual capacity backed by $7.1 billion in investment. Six more projects representing $7.7 billion begin construction this year, including BHP's Spence and Capstone's Santo Domingo. Equipment procurement typically begins 12–18 months before production, creating near-term demand for Epiroc's drills, loaders, and automation systems.

• Automation fleet targets 5,000+ machines by 2027 as brand-agnostic platform wins mixed-fleet contracts: Epiroc's automation fleet grew 21% to 3,450 machines in 2024, including 500+ autonomous surface drills. The platform integrates non-Epiroc equipment, expanding addressable markets beyond proprietary fleets. Miners report 20% productivity gains from autonomous haulage, accelerating adoption. If the fleet reaches 5,000+ units by 2027, recurring software and service revenue compounds, supporting margin expansion above 20%.

• Battery-electric equipment mandates drive replacement cycles as mines electrify underground fleets: Global mining electrification is accelerating, battery-electric equipment reduces ventilation costs by 30–50% and meets tightening emissions rules. Epiroc holds the widest battery-electric range, with loaders offering 4-hour battery life and fast-charging capability. As mines retrofit underground operations from diesel to electric by 2027–2028, Epiroc captures both equipment sales and higher-value service contracts tied to battery maintenance and charging infrastructure.

• Energy transition requires 54 new major copper mines by 2050; Epiroc earns on every dig: Copper demand is structural, EVs need 2.5x more copper than combustion cars, grid upgrades require massive cable installations, and renewable energy infrastructure depends on copper conductivity. The transition demands opening 54 new major mines by 2050, each requiring drills, loaders, haulers, and decades of aftermarket support. Epiroc doesn't mine copper, it sells infrastructure to those who do, then locks in recurring revenue through parts, service, and automation software.

• Automation becomes mining standard: 70% of new underground fleets autonomous by 2030: Mining automation is expanding at 15.58% CAGR through 2030, driven by labour shortages, safety mandates, and 20% productivity gains. Autonomous systems reduce human exposure to underground hazards while improving ore recovery and operational uptime. If 70% of new underground equipment deploys with automation by 2030, Epiroc's connected fleet (15,000+ machines today) becomes the data backbone for mine optimization, creating a compounding software and service revenue stream that outlasts equipment sales cycles.

Equipment demand follows copper prices and mine profitability. When copper dropped in 2015, mining capex collapsed, dragging equipment orders down. Copper volatility rose, daily moves of 3–5% are now common, driven by supply shocks, China's industrial activity, and energy transition speculation. If copper falls below $4/lb or recession hits, miners delay expansions, and Epiroc's equipment revenue (34% of sales) drops sharply.

The underground mining equipment market is oligopolistic: Caterpillar, Komatsu, and Sandvik control 35%, while Epiroc and Hitachi hold another 30%. Caterpillar's revenue ($59.4B) dwarfs Epiroc's ($4.6B), giving scale advantage in R&D and distribution. Competition drives price pressure, especially when miners negotiate contracts for mixed fleets. If automation becomes commoditized or battery-electric equipment loses differentiation, margins compress and service pricing weakens.

Automated systems require upfront investment, often millions per machine, and mines hesitate if ROI timelines stretch beyond 3–5 years. Job displacement creates workforce resistance, slowing rollout even when productivity gains reach 20%. Regulatory bodies must approve autonomous systems for underground use, and delays in safety certifications can postpone deployment. If adoption stalls, Epiroc's automation fleet growth slows, limiting high-margin software and service contract expansion.