Mining equipment leaders Joy Global and Bucyrus International headquarter in Milwaukee area

Both have international reach, both are local, both compete in a market that shows potential for incredible global growth, and together, according to Reuters, they control approximately 80 percent of the of the mining equipment industry. Yes, they both can also trace their early roots to the Milwaukee area.

Mining Leaders in Milwaukee, Part One of Two: Joy Global

Joy Global (Nasdaq: JOYG) began in Milwaukee well over a century ago. By 1884, the city was being transformed from a key trading area into a manufacturing leader to complement its Great Lakes location. Meanwhile, Alonzo Pawlig and Henry Harnischfeger founded a machine shop to supply larger manufacturing forces in the Midwest, and by 1890, they were also focused on heavy machinery, primarily cranes. Soon, the organization became known as P&H. Today, P&H Mining is a major division of Joy Global.

A Fortune 1000 company, Joy Global also has major operations in Australia, South Africa, the United Kingdom and China. In addition, the company also has smaller facilities in Russia, Poland and India. However, in the 3rd quarter of 2009, domestic sales topped international sales, 53.5 percent to 46.5 percent, as extrapolated from RTTNews. Although domestic sales are very important to the company, recent trends tip the scales slightly in the favor of international sales as momentum in this direction shifts for the company.

Still, there is a large focus on doing business in the U.S., or with Western Nations, so much emphasis is placed on being environmentally responsible and in following the varied and dynamic regulations that come with the process. In fact, a large portion of joyglobal.com focuses on social responsibility, on compliance in reporting the “carbon footprint” its products help create, and on developing technology such as cleaner coal processes that require heavy investment. Still, these investments could help to create as many as 1.4 million jobs per year by as early as 2025, according to the website.

Recently, demand for mining equipment had slowed slightly, mainly due to concerns about the sluggish American economic growth, as well as Chinese factors, and also the looming potential for higher taxes in some commodity-rich nations, according to a summarized statement by Joy Global, as referenced by Bob Tita of the Wall Street Journal. However, with international inroads, Joy Global has raised its profit outlook for next year, convinced of a continuous expansion in the mining sector world-wide. The expansion is now in its infancy, but is expected to last a number of years, also according to the article.

This is good news for those with mining interests in China and India, two nations given developing nation exemptions from the Kyoto Protocol (negotiated in part by Al Gore, and famously not signed by George W. Bush). Both nations have shown large economic gains from year to year over the long term, and their wealth is causing great demand for energy. While both giants, whose people together account for one-third of the world's population, do import some coal, they strive to take care of their energy needs on their own. Demand for coal is already high and now seems to be mushrooming.

In exploring both markets, Joy Global appears to see much potential in China. Despite a requirement that its coal mines use domestically built machinery, Mike Sutherlin, Chief Executive and President of Joy Global, states, “We continue to believe we can grow that market,” according to Tita. Joy Global has a manufacturing presence within the country, according to Joyglobal.com. A “big push to sell” in China is evident, according to Tita.

Because of the growing need for coal, websites like chemicallygreen.com are chock-full of complaints that pollution from China is so bad that particles travel to the mainland United States, while others give justifications like the argument that China can't slow pollution without slowing their growing economy and potentially destabilizing their government. Despite lax oversight in some developing nations, even ones that are jumping to superpower status, Joy Global may eventually be a world leader in bringing cleaner coal to the world. Hopefully, this could even be true in the huge potential markets of the Far East.

After comparison, it will be apparent that many similarities exist between Joy Global and Bucyrus International, who will be the focus of Part II. Still, many plans for both organizations are just now coming to fruition. In a year when both companies are expected to make similar profits for the first time, it will be interesting to see how these cross-town rivals, who dominate their market, implement their long term strategies, and how those strategies will play out in the years to come.