Wheels of Gold

By Jeremy Caplan

The average driver may not think much about the tires on his car until one goes flat. But those who operate the mining industry's monster trucks, whose wheels are 12 ft. in diameter and weigh 7,500 lbs., know that the rubber on the rims is worth its weight in gold. Giant tires are in increasingly short supply as the extraction industry hits overdrive to chase rising commodities prices. As demand for raw materials grows in the booming economies of India and China, mining companies are scurrying to dig deeper, faster and more efficiently for coal, copper and other materials. In doing so, they're loading up on the world's biggest trucks (40-plus-ft. tall) and coaxing mileage from their old vehicles--all of which require new $20,000 tires as often as once a year. Unlike tires for automobiles, which can be cranked out by the millions, those for large mining trucks are labor intensive. Tires for your Chevy can be cured in as little as 15 min., for instance; that process takes as much as 12 hr. for an earthmoving truck's tires. The big manufacturers--Goodyear, Michelin and Bridgestone--don't have the production capacity to meet the rising demand.

Prashant Prabhu, worldwide president of Michelin's Earthmover Tires division, says the company is boosting capacity at its plant in Lexington, S.C., from about 11,000 giant tires annually to 16,000. Bridgestone is investing $155 million to expand production 20% at three Japanese plants over the next two years, although the company anticipates that manufacturers won't be able to meet demand until at least 2011.

The major manufacturers have long-term contracts with their biggest customers, so those orders will be met first, which means there isn't enough capacity left over to supply smaller or newer mining operations. That has become an opportunity for a growing group of big-wheel brokers. The rubber is meeting the road at up to $60,000 apiece. "The shortage is enabling anyone with something black and round with a hole in the middle to supply it at an exorbitant price," says Prabhu. "People have even told us to put our tires on eBay." Prabhu won't sacrifice the company's relationship with longtime customers for short-term gain.

But mine operators without such relationships are scouring the Internet to find tires overseas, in some cases buying second-rate alternatives from Belarus, Ukraine or China. Most of those are bias-ply tires rather than radials. The difference? Radials generally last 5,000 to 7,000 hr., depending on conditions; bias tires may last just a third as long and are more likely to blow under stress.

For mining companies desperate to keep million-dollar machines in use, though, a second-rate tire is better than none. Shawn Rasey, executive director of North American sales for Bridgestone, says he recently saw a fleet of five large oil trucks sit idle for five months because they lacked tires, causing the forfeiture of millions of dollars in profits.

Increasingly, mine operators are trying to extend tire life by smoothing mine roads, reducing payloads and lowering speeds. If the shortage has had a positive effect, it's the reduction in tire-related accidents, says Chris Curfman, vice president of Caterpillar Global Mining, which ships just 5% of its trucks with tires. The rest are "naked," requiring customers to acquire tires from distributors.

When tires do get damaged, they're repaired more often than they used to be. Mark Lyens, equipment manager for the Walsh Group, a national construction company with about 2,000 trucks, says this year he has overseen the repair of 50 tires--to save rather than shred them. Growing demand for such fixes has benefited tire-repair outfits like the Big Horn Tire Shop of Gillette, Wyo., which has more than 30 workers fixing about 70 tires at a time. Repair jobs there can take two days and cost from $800 to $2,000.

Al Chicago, president of the Western states division of the Purcell Tire & Rubber Co., says the shortage is the worst he has seen in his 44 years in the industry. Its scale hit home, Chicago says, when he saw a tire he had donated to a school--where it had been painted for use on the playground--arrive at his shop for repairs, having been harvested by a mining company.

Given the tires' value, one feature that operators like about them is their heft. "At least they're rarely stolen," says Gregg Hoss, CEO of Hoss Equipment, a national mining-equipment company. "It'd be pretty tough to throw 7,500 lbs. of rubber into the back of a pickup." Just you wait.