Advanced Braking Technology Limited (ASX: ABV) has entered into an agreement with Glencore Australia Holdings to develop a heavy vehicle Sealed Integrated Braking System (SIBS) for the Volvo FMX Haul Truck.
The design solution will include Intellectual Property developed by ABT and related to the proven and trusted Failsafe brake for light commercial vehicles, that has been used extensively within both the Australian and international mining sectors over many years.
The parties are proceeding with the expectation that upon successful development, testing and validation of the SIBS, subject to Glencore’s approval, Glencore will consider progressive deployment of the SIBS across its fleet of Volvo FMX Trucks globally.
Further, following successful validation and subsequent period of exclusivity, ABT will offer the product to the global market. The development costs are being shared between both parties recognising a mutual commitment to the success of the solution for the Volvo FMX Haul Truck, and for further market expansion by ABT into the medium term.
Product Development Agreement entered with Glencore ABT agrees to undertake product development works exclusively with Glencore to adapt the SIBS for use on the Volvo FMX mining specification haul truck by developing, manufacturing, producing and installing prototype units for validation and testing in Glencore mining operations.
At the completion of the development, validation, and testing, and subject to mutually agreeable commercial terms, it is intended to progress to low-rate production stage for use in Glencore mining operations. As Glencore is contributing to the development of the product, it is granted an exclusivity period and certain rights to priority of supply, with the intention of progressing to a commercial roll out phase, which in turn has the capacity to generate meaningful revenue for ABT.
Further, ABT may commence negotiations with other customers for supply of the product following the end of the exclusivity period with Glencore.
ABT CEO, Mr Andrew Booth stated: “the signing of this agreement achieves a strategic objective of diversifying our SIBS vehicle type applications in which we provide innovative braking solutions to Glencore and other international heavy vehicle fleet operators”.
The potential value for the development stage of the ABT Glencore joint product development contract is up to $2.8M over a term of 12 months and contingent upon the successful completion by ABT of project and development milestones. The opportunities that it presents to diversify ABT’s vehicle applications will provide further growth opportunity for the company.
“We are very proud at ABT to be working with Glencore to deliver a world class Heavy Vehicle Brake solution designed for heavy ruggedised industrial applications. The signing of this contract marks a key milestone in the Company’s development and future strategy,” Mr Booth added.
