Caterpillar to explore options for some mining products, cut jobs
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Mining equipment is displayed at the Caterpillar booth during MINExpo International 2012 trade show at the Las Vegas Convention Center in Las Vegas, Nevada September 24, 2012. REUTERS/Las Vegas Sun/Steve Marcus
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(Reuters) - Caterpillar Inc (NYSE: CAT) said on Thursday it would explore options, including a possible divestiture for some of its mining products, and would stop taking orders for machinery specific to underground soft rock mining.
The decision for Caterpillar to review its options for products in its mining division indicates more of a long-term decline in global mining instead of a cyclical dip.
Chief Executive Office Doug Oberhelman said last month he was not expecting an upturn in mining or oil in 2016.
"There are very few buyers for those assets. Some of the natural fits have also been divesting," Kwame Webb, a Morningstar analyst said.
"I wouldn't be surprised if they just wind the business down. This has been a company that when it gets too tough, they exit the business," Webb said.
Earlier this year, Caterpillar said it would end production of its on-highway vocational trucks.
The company said it expects to cut up to 155 jobs in the room and pillar business, which caters to underground soft rock mining customers.
These cuts are part of an overall restructuring plan.
Caterpillar shares closed down more than 1 percent at $83.38.
(Reporting by Meredith Davis in Chicago; Additional Reporting by Ankit Ajmera in Bengaluru; Editing by Alan Crosby)
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