Deep in Brazil's Amazon rain forest a Caterpillar truck the size of a two-story house rumbles along a dirt track, carrying its load of rust-colored ore from the Sossego copper mine to a processing plant five kilometers away.

　　The truck is one of six that have been working 24 hours a day since the mine, 2,000 kilometers north of Rio de Janeiro, opened in July. The price of copper has risen 61 percent in the past year, prompting an increase in demand for dump trucks, excavators and other giant-sized mining machinery made by Caterpillar Inc, Terex Corp and Komatsu Ltd.

　　Sossego's owner, Cia Vale do Rio Doce, and BHP Billiton Ltd are opening new mines and reviving old ones to meet increased consumption of metals by China, and they need vehicles to do it. With orders up 30 percent in the first four months, equipment makers are struggling to meet deadlines.

　　"The magnitude and speed of this surge has been unprecedented," says Lynn McPheeters, chief financial officer of Caterpillar, the world's largest maker of earth-moving equipment.

　　Peoria, Illinois-based Caterpillar's second-quarter profit increased 38 percent to US$552 million. Revenue rose 28 percent to US$7.6 billion, and 14 percent of the total was sales of mining machinery. The company expects revenue to climb 25 percent over the whole of this year, boosting profit by 80 percent to 85 percent from 2003, McPheeters says.

　　To meet orders, Caterpillar and Tokyo-based Komatsu have had to subcontract for such components as steel-frame parts, lengthening their delivery times and raising costs. In the second quarter, Caterpillar paid US$60 million in steel surcharges, extra shipping expenses and premiums to suppliers, McPheeters says.

　　"We manage our capacity to have it somewhere between peak and trough demand," McPheeters says. "We've had to have some work done outside to take care of the peak."

　　Komatsu's revenue in the quarter ended June 30 rose 20 percent to 318 billion yen (US$2.89 billion) while net income more than doubled to 10 billion yen.

　　Sales of mining equipment currently account for 25 percent of the company's revenue, says Rod Schrader, 42, vice president and general manager for mining at Komatsu America in Vernon Hills, Illinois.

　　In may, Komatsu predicted revenue would increase 8.7 percent and net income 37 percent in the year ending March 31. Rising orders, which have allowed Komatsu to increase prices of its mining equipment by 2.5 percent to 5 percent, mean those revenue and earnings targets are now probably low, according to Schrader.

　　Orders to US companies for mining machinery rose 30 percent to US$3.5 billion in the first third of the year from the same 2003 period, says Ken Kremar, the capital goods specialist and a principal in New York for Global Insight Inc, a Lexington, Massachusetts-based economic forecasting firm.

　　Purchases from China, where the economy grew 9.7 percent in the first half, has prompted companies such as BHP and Vale do Rio Doce to draw up plans to boost output.

　　"There is huge demand for resources in China, and that story is far from over, which is very good," says Michael Rachor at Activest Investment in Munich.

　　(Bloomberg News)