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Construction equipment maker Caterpillar Inc. believes demand for critical minerals as the clean energy transition gathers pace will translate to solid returns for its mining business, chief executive officer Jim Umpleby said in an interview on Tuesday.

The company is aiming at a global market worth about US$5-trillion for energy transition infrastructure between 2021 and 2040, Mr. Umpleby said.

“Mining capital expenditures have been relatively subdued over the last few years and we believe that will increase,” he told Reuters after the company’s investor day meetings.

Executives reaffirmed the heavy machinery giant’s machinery, energy and transportation services annual revenue targets of US$28-billion by 2026.

Increased demand of minerals will expand the total addressable marketing in renewables, Mr. Umpleby said. “That requires more mining equipment, which gives us an opportunity,” he said.

Capital expenditures for mining in 2022 have already surpassed those of the previous eight years and the trend is expected to continue, with companies reinvesting in their fleets to replace aging equipment to step up operations.

Caterpillar’s overall cash flow for capex spending increased to US$346-million in 2022 from US$252-million last year, with the company allocating investments toward scaling tech, artificial intelligence and environment, sustainability and governance services.

On Tuesday the company’s board approved a new stock repurchase of US$15-billion. Shares rose 2.1 per cent on the news.

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