11 minute read
The Big Picture: insights, explainers and discussions
from BBMC Yearbook 2021
by bbminingclub
Photo: Whitehaven
2021 BBMC LUNCHEONS The Big Picture: insights, explainers and discussions
Exciting future ahead for Winchester South project Todd Harrington, Project Director, Whitehaven Coal 11 February 2021
The BBMC 2021 Luncheon Speaker Series kicked off the year in style, hosting Todd Harrington, Winchester South Project Director at Whitehaven Coal. Mr Harrington presented an extensive introduction to Whitehaven Coal, as a new player in the Bowen Basin but an established force in the New South Wales coal industry. As Australia’s leading premium-quality coal producer, Whitehaven Coal has three existing open-cut mines, as well as one underground longwall operation in the Gunnedah Basin. The company has experienced significant growth over the last decade, with another decade of organic growth ahead. Whitehaven Coal has a strong project pipeline including Winchester South which was purchased from Rio Tinto in 2018. Mr Harrington told the crowd that Whitehaven was excited by the opportunity that Winchester South brings, as the Bowen Basin provides access to quality metallurgical coal together with an opportunity to work with new stakeholders, supplies and a large regional skilled workforce. Winchester South is anything but a small project. With 1.1 billion tonnes of coal resources and 350Mt of coal reserves, the 15 Mtpa operation has a 30-year life, targeting predominantly metallurgical coal. The project has a strong business case, with existing rail infrastructure and utilities located close to the mining lease. Mr Harrington detailed the company’s strategy for engaging with local communities, saying, “Whitehaven Coal seeks to create value for our shareholders and also importantly the communities in the regions where we operate. We do this through long-term career opportunities, as well as supporting regional business with initiatives like 21-day payment terms for small and medium sized local suppliers.” In parallel with major approvals, the feasibility study and procurement elements such as supplier portals for the project will also be progressed followed by construction, with a timeline target around 24 months. “We’re excited to be at this point as Winchester South represents a large growth project for the Bowen Basin. Over the next decade, there are some existing Bowen Basin assets that will reach their end of life, and we’re hoping to step in and fill the gap.
Transformation and technology driving Anglo American’s metallurgical coal future Dan Reynolds, Head of Transformation, Anglo American 25 March 2021
Dan Reynolds, Head of Transformation for Anglo American’s Metallurgical Coal business gave March’s sold-out crowd a detailed look into the key strategic initiatives driving change in Anglo American’s operations, as the largest underground metallurgical coal player in Australia. His overriding message was, “We have to transform in the decades ahead, and we’re starting that journey now.” The three key strategic initiatives driving Transformation are the Anglo American Operating Model, FutureSmart Mining and the Sustainable Mine Plan. “One of the things our new Operating Model does is give real clarity about what’s important in our business, clarifying priorities of what we should be working on and planning for,” commented Mr Reynolds. The challenge and the opportunity for Anglo American’s suppliers lies in FutureSmart Mining, namely in working with specialist suppliers to solve problems that can be industry-wide, site-specific or even seam-specific. He showcased the new Met Coal Analytics Centre, or MAC, which will become the heartbeat of Anglo American’s data analytics capabilities in Australia. Driven by streams of data gathered from operations, the MAC generates operational insights, predicting and flagging possible issues before they even occur. “Inputs to the MAC are vendor agnostic – we’re gathering data wherever we can, with the goal of transformational operations capability.” Across all transformation initiatives, Mr Reynolds had a clear message for suppliers: communicate your capability, and demonstrate how you can align with Anglo American’s priorities to streamline operations.
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Photo: Clinton Bartley From challenging pandemic response to supplier challenges: BHP’s approach to METS development and future procurement Jessica Simpson, Head of Business Partnerships BMA 27 May 2021
At our May event in Mackay, Ms Simpson gave attendees an inside look into BHP’s strategies to ride out the global coal market variations and economic challenges, including their COVID-19 response. “Fortune favours the brave, they say – and the outlook for our collective futures is one in which effort, enterprise and innovation will be demanded of us all. Fortunately, these skills are well developed in our industry – and we can and will hit the ground running, positioning ourselves globally as a true innovative, collaborative hub.” BHP sees their future role in the development of the domestic METS sector as reducing hurdles to access and providing a ‘sandpit environment’ for testing, trialling and scaling potential innovations. BHP’s METS growth support initiatives underway since June 2020 included: • $250 million in procurement carve-outs for direct spend with
Australian METS companies • $150 million in procurement carveouts through Tier 1 contractors for indirect spend with Australian
METS companies • $20 million through BHP Ventures • $20 million through the Supplier
Innovation Program In partnership with Austmine, the Supplier Innovation Program gives BHP an “avenue to seek solutions to issues or challenges identified at our operations that don’t necessarily have an immediate off-the-shelf solution”, explained Ms Simpson. Unlike traditional procurement processes, the Supplier Innovation Program is designed to move quickly through the EOI, pitch and proposal stages to a paid pilot for on-site trials. Successful projects gain the opportunity to permanently implement the solution under a contract. And most importantly, the vendor retains the intellectual property for further market engagement. BHP is also crowd-sourcing emissions reduction from their diesel-powered haul truck fleets. In support of the global zero emissions material movement initiative, BHP, with Rio Tinto and Vale, are searching for technology to both electrify and maintain charge on the fleet which runs 24/7. Ms Simpson also provided an insight into the success of the BHP and C-Res partnership over the last nine years, which started in the Bowen Basin and is now implemented across Australia. Since 2012, BHP has spent more than $600 million with over 1,450 local and Indigenous small businesses, with a percentage of this channelled through the Local Buying Foundation. Funds are used to open up local business development and build sustainable business communities.
Photo: AMMA
The rise of the juniors and the future of Australian seaborne coal Mark Gresswell, Director, Commodity Insights Nick Jorss, Executive Chairman, Bowen Coking Coal
29 July 2021
July’s luncheon audience were treated to two exceptional speakers, in a change of format for the event. Both speakers strongly affirmed the buoyant future of coking and thermal coal, backing up their assertions with economic data from around the globe. Mark Gresswell pointed out that global perceptions of coal are largely framed by the North Atlantic players – USA and Europe. Both those continents have access to relatively cheap gas for electricity, which has displaced some coal-fired generation. According to Commodity Insights’ research, “Asia will account for over twothirds of global electricity demand growth by 2040. Asian electricity generation growth will be equivalent to the current generation of North America plus Europe. This will be supported by over 150,000MW of new coal-fired capacity being built across Asia. And regarding steel, the potential for growth in consumption from the current low per capita level is massive.” The reality is that forecast growth by every metric for ‘the Asian juggernaut’ will continue to create a sustained and growing demand for both coking and thermal coal. According to the OECD, in 2019 Asia accounted for 42% of global GDP. This will rise to 54% by 2050, and Asia will include four of the world’s five largest economies (China, India, Indonesia and Japan). While the outlook is decidedly bullish on coal exports from Australia, supplyside challenges threaten to hamper the country’s ability to meet forecast demand. The regulatory approval process is sluggish to respond to calls for rationalisation, and sourcing capital is becoming an issue as banks and financial suppliers bow to negative social pressures. Overall, Mark forecasts that “slowing of supply and ongoing demand growth will result in a period of high prices and ‘super-normal profits’ for coal producers globally.”
Bowen Coking Coal gathers steam
Nick Jorss, Executive Chairman, Bowen Coking Coal (BCB) reiterated Mark’s overall optimism for the future of the Queensland coal industry. Bowen Coking Coal are poised to emerge as the Basin’s next significant coking coal producer. With four sites currently under development, they plan to export coking coal by mid2022. All projects are located near infrastructure and operating mines to maximise synergies. The two projects anticipating to gain 2021 approvals, Broadmeadow East and Isaac River, are expected to create 270 jobs from 2022. Scaling and upgrading of these, plus continuing development of the Hillalong and Cooroorah projects will bring corresponding boosts to local contractors and suppliers. Between them, the Board and management have opened 11 and operated 25 mines, and are actively pursuing complementary project opportunities focused on the development of high-quality coking coal projects in the Bowen Basin.
Panel tackles the tough questions facing the resources sector Ian Macfarlane, CEO, Queensland Resources Council Mark Scott, CEO, Hastings Deering Jason McCallum, GM Queensland and WA, Yancoal Vikesh Magan, GM Mining, Thiess 23 September 2021
ESG advances, the next wave of technology and meeting the skills shortage were all hot topics at BBMC’s first panel discussion, presented at the annual Rockhampton luncheon event. The four panellists, all distinguished contributors to the industry, shared openly about the latest industry issues from a policy, producer, operator and supplier perspective. The conversation crossed issues of productivity, as well as looking to the future. Queensland Resources Council Chief Executive Ian Macfarlane said attracting the right people to industry is absolutely critical for that future. “The mining industry is dominated by engineers who are logical people, and they all think it’s a marvellous industry. However, young people are hearing exactly the opposite message in the media,” said Mr Macfarlane. “It’s up to us to constantly promote the opportunities in this industry, from the backyard BBQ to the boardroom.” Hastings Deering Chief Executive Officer Mark Scott agreed, saying that industry opportunities weren’t just limited to a regional or metropolitan area, or even just to trade or engineering backgrounds. “We employ people in diesel fitting, electrics, and commerce, as well as engineers and scientists. There’s over 2,700 applicants for our apprenticeship program each year. A career in the resources industry really can look like anything you want it to – you absolutely can be regionally based and have a long, well-paid career,” said Mr Scott. But it wasn’t just people and skills reported to be in short supply – with the metallurgical coal price hitting record highs, the panel discussed current issues in acquiring everything from laptops to light vehicles. Yancoal’s Jason McCallum, said that while the coal price hasn’t changed existing contracts to produce and ship coal, it has shifted the focus onto productivity. “The only way for us to take advantage of the current market is to be busy making our sites more robust to deliver on time and at the right price, well into the future,” said Mr McCallum. Thiess General Manager Mining Queensland Vikesh Magan agreed that this productivity focus was a key opportunity for suppliers, encouraging them to work collaboratively and share solutions.
Digital transformation: driven by curiosity Andrew Wilson, Head of Digital Teams, BHP 18 November
The BBMC wrapped up 2021’s luncheon series with guest speaker Andrew Wilson, giving valuable insight into the rationale behind BHP’s Digital Teams, and the outcomes BHP is seeking in their drive for leadership in digital transformation.
The digital transformation phenomenon
While ‘digital transformation’ seems to be the buzzword of the 2020 decade, Andrew goes further to describe the motivation that leads to transformation. “At the heart of it is a level of individual curiosity that ask the questions and galvanises companies to think differently about what they’re doing. Our extraction and mining industries are among the most curious. Who else walks over a piece of dirt and is curious enough to invest significantly to find out what’s down there?” He commented that the mining industry must recognise the accelerated pace of digitisation, or risk being quickly overtaken and end up wondering what hit them.
BHP’s rationale for Digital Teams
The Digital Teams mandate is to empower the people who know how to do the work on the ground and have the attitude to get the answers no matter what it takes. BHP recognise that partnerships and working with different models of collaboration is where they’re headed in digital transformation. He says, “working together as one team will see us move the needle in Queensland and remain resilient as we go forward.”
Digital Teams and the Supplier Innovation Program
They’re sourcing data internally from BHP and external vendors in partnership and collaborative models. The Digital Teams work on internal software development, fed through BHP’s Supplier Innovation Program run by Austmine. The Supplier Innovation Program encourages entrepreneurial thinking, fosters originality and builds capability in the local community. By reimagining business models with the METS sector, the program enables innovative solutions to be designed, tested and implemented, fast-tracking the adoption of new technology. Andrew emphasised that it’s a particularly exciting time to be in the industry, and if suppliers have a digital product or service that answers safety and productivity challenges for BHP, the team wants to hear from you.
Photo: Peter Turnbull
