The objective of the project is to determine the value created for Sandvik by investing in the development of a new loader for narrow vein mining applications. The new loader is targeted to fill a gap in the product portfolio between the 1 t and 4 t loaders. The gap in the Sandvik narrow vein loader offering was created through the termination of previous product models, LH202 and LH202E. In terms of mining applications, this gap corresponds to veins extracted using mining widths in the range of 2.0 to 2.5 m. The new loader model under investigation is identified as LH20x in this project. Due to a high degree in variability of orebodies, narrow vein mining requires highly selective mining methods in order to minimize dilution and thereby reduce additional costs associated with mining and processing. Narrow vein mining has a high cost per tonne and productivity is low and therefore, for economically viability, it is mostly applied to orebodies containing the precious metals of gold and silver. The positive price outlook for silver and gold is good news for narrow vein mining as these prices are what sustain narrow vein mining. There are three categories of mining applied in narrow vein mines: conventional, semi- mechanised and mechanised. In the conventional category tunnel sections are too narrow for drill rigs and hence hand-held drilling is done with jack legs and cleaning is done with scrapers. In the semi-mechanised category, drilling is also done with jack legs however now the tunnel sections become large enough to accommodate a small loader. In the mechanised category, tunnel sections are sufficient to accommodate a drill rig and loader. The Sandvik narrow vein drill offering does not have rigs down to the same size class as the LH20x and as such the loader will continue to be primarily used in semi-mechanised operations. The potential impact on customers created by the gap in the Sandvik loader offering is quite significant and customers are left with two alternatives from Sandvik: use LH201 instead of LH20x or use Cindy instead of LH20x. Cindy is a new loader that will be launched in 2013 for application in mining widths above 2.5 m. If customers were to use the smaller LH201 loader, typically used in mining widths up to 2 m, the efficiency of loading in the production cycle is substantially reduced. As a result, mining costs would be increased as more stopes in simultaneous production would be required and more equipment and personnel would be needed. The other alternative would be to increase the mining width to at least 2.5 m and use Cindy. Depending on the how the cut-and-fill mining method is applied, dilution is increased and more tonnes need to be mined, transported and processed. Sales Areas estimate annual sales of up to 82 LH20x loaders with a major portion of this demand coming from China on the condition that Sandvik is able to produce a loader with a sales price in the range of €110k to €120k. The remaining demand comes from LH202 and LH202E fleet replacements, inherited sales from LH203 and LH203E, and new mines or mine expansions. The demand for an electric model of the LH20x will be approximately 35% of the total volume and this is expected to grow due to the higher focus on health issues and as an avenue for cost reduction in ventilation.