Mining equipment: deep resources - FT.com The clatter of falling dominoes echoes through the mining sector. Slowing growth rates in China have contributed to weakening commodity prices. This has led big mining companies, such as BHP Billiton, to signal possible delays to capital-intensive projects. And that has prompted fears of a downturn in mining capital expenditure, denting prospects for mining equipment makers. In Europe, shares in Sweden's Atlas Copco have fallen 13 per cent from mid-March highs, while those of Finland's Metso and Outotec are down even more sharply. In the US, Joy Global and Caterpillar have fallen by a quarter and a fifth respectively. In general, Goldman Sachs estimates, mining-exposed stocks "derated" by 15 per cent in the three months to early May. But, paradoxically, this has happened when many equipment companies are continuing to post strong order intakes. At the mining division of Sweden's Sandvik, for instance, orders were up 40 per cent year-on-year in the first quarter. In Atlas" mining business, there was 22 per cent organic growth. And by the end of the earnings season, 2012 consensus estimates for European equipment makers were being revised upwards, not downwards. Investors need to be on their guard. These companies, often treated indiscriminately in market rallies or slumps, have very different characteristics. Metso has more exposure to the iron ore business than Atlas, say. Mining orders account for about a third of total revenues at Atlas and Sandvik, a smaller proportion that at Finland's Outotec, where exposure to after-market sales is also relatively low. Even so, finding bargains may be tough. Historically, the sector trades on an enterprise value/earnings before interest and tax ratio of 9-10. And, post-correction, that is precisely where the more appealing stocks, such as Atlas, have ended up.