ABB Commissions Gearless Mill Drivers, Shares Fall - Analyst Blog

Shares of ABB Ltd. ABB fell 0.13% after the company announced on Jun 12 that it has completed the deployment of three gearless mill drive systems (GMDs) for Chile based Codelco's Mina Ministro Hales (MMH).

The company had received this contract in 2011 to provide GMD for 3 mills - a 36-feet 12 megawatt MW GMD required for the semi-autogenous (SAG) mill and a couple of 22-feet 8.9 MW GMD's for the two ball mills. Apart from these, ABB was required to provide gas insulated switchgear with a capacity of 220 kilovolt (kV), harmonic filters and power factor correction. The company was also required to construct three containerized E-houses to place the cycloconverter equipment, motor control centers as well as control panels.

ABB's advanced GMDs are equipped with variable-speed functions, which enable the mills to start smoothly and ensure optimum control over the grinding process, thereby increasing productivity. Further, this technology significantly improves the performance of the mills by reducing the mechanical components that were the key components of the conventional mill drivers. These simplified drivers significantly cut down on the mechanical stress, rendering increased reliability, flexibility, adjustability and availability of the mills.  

The MMH company is crucial for the socio-economic development of Chile as post completion of this project the production is likely to increase to 190,000 tons of finely grinded copper and 300 tons of silver. MMH is expected to start the commercial production from the first quarter of 2014 itself.

The source of the deposits - Mansa Mina mine in Atacama desert is expected to contain as much as 1.3 billion tons of reserves. Codelco in its efforts to tap this opportunity has been investing extensively in this project. The company has spent in a new open-pit mine and a concentrator to improve production.

ABB currently carries a Zacks Rank #5 (Strong Sell).

Stocks That Warrant a Look

Some better-ranked stocks that can be considered at present include EnerSys ENS which sports a Zacks Rank #1 (Strong Buy), AO Smith Corp. AOS and ESCO Technologies Inc. ESE, both of which carry a Zacks Rank #2 (Buy).