METSO
METSO
Investing and
Crushing It PRODUCTION: Colin Chinery
Major new investment in a foundry and a strategy that includes expansion into three African states, mark an eventful year for the South African arm of global manufacturer and supplier Metso. “We are a critical cog in the mining industry, and in terms of innovation and quality I would say we are number one in everything we do,� says Managing Director Julian Pallium.
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INDUSTRY FOCUS: HEAVY INDUSTRY
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With policy uncertainty and dwindling foreign capital investment in lockstep, a €3.5m (R58m) investment in KwaZuluNatal has given a welcome upbeat to South Africa’s troubled mining industry. Here at its Isithebe foundry, as part of its expansion plans, Boksburg-
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based Metso South Africa is building a second melting furnace to increase manufacturing capacity for large crusher wear parts castings and ensure global availability. “The demand for large crusher wear parts is growing in the mining industry,” said Joni Meronen, director
of Mining Crusher Wears “With this investment we ensure we can meet our customers’ needs, and through the renewal of the foundry improve our capabilities to deliver high quality heavy wear parts.” A world leading industrial company covering six continents,
METSO
Finish-owned Metso serves the mining, aggregates, recycling, oil, gas, and pulp, paper and process industries, with the Isithebe plant part of a global foundry network that includes foundries in India, the Czech Republic, China and Brazil. LATEST TECHNOLOGIES Using the latest manufacturing technologies, and in line with Metso’s strict sustainability and quality principles as well as international standards, the renewed foundry will manufacture wear parts for the Nordberg MP2500 cone crusher – Metso’s biggest world-wide - as well as for Metso and third-party primary gyratory. The first product deliveries from the new furnace are scheduled for May 2019. “The expansion is really a strategic one, with the Isithebe foundry having a good reach into the rest of Africa and also Chile and Panama where we believe that every MP2500 will be more frequently sold into copper mines,” says Managing Director Julian Pallium. “It’s an engineering masterpiece.” The Metso African footprint is well established – this year marks the 60th anniversary of its Vereeniging machining, fabrication and assembly plant – and the Isithebe factory, which became part of the Metso Group in 1970, has played a crucial role in South African and African mining. Against a backdrop of acquisitions, mergers and reorganisations, 2013 saw a special turning point in Metso’s history, following the decision to split the company into two listed, independent entities - Metso Corporation and Valmet Corporation. With Valmet serving industries using bio-based raw materials, Metso focuses on leading-edge solutions and services for the mining, construction, and oil and gas industries.
WORLD BEST “What is really key at Metso is that every project we go into is very critical for us, and the equipment we supply truly stands the test of time. This will be confirmed by anyone. For example I recently spoke with a guy from New Caledonia who said, ‘you people produce the best crushers in the world.’ “We are producing quality brand equipment for the majority of mines where we are heavily involved. We are a critical cog in the mining industry, and in terms of innovation and quality I would say we are number one in everything we do.” Among recent high profile sales is the Metso C200 jaw crusher, delivered to South Africa’s biggest current mining venture, the $400-million Gamsberg zinc and lead project in the Northern Cape,
with approximately 160 million tons of defined ore resources, one of the world’s largest undeveloped zinc sulphide deposits, But with a Gamsberg spectacular an exception in today’s landscape, successful suppliers are addressing what has become a critical if routine sectoral preoccupation. With mining companies faced with declining ore grades and more complex ore bodies, as well as increasing environmental and safety requirements, the search for capital efficiency and continuous performance improvement has become the biggest challenge in the industry Here Metso helps its customers achieve maximum performance with a full-scope offering of processing solutions and services that increase
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INDUSTRY FOCUS: HEAVY INDUSTRY
operating performance and bring sustainable profit improvements. “Customers behaviour has changed,” says Pallium. “The buying pattern has shifted significantly to product optimisation and a more service-orientated life cycle type of business.” MARKET DIFFERENTIATOR “What differentiates Metso from the competition,” says Country Manager & Vice President Sales and Service Southern Africa, Qasim Abrahams, “is that we offer an end to end process solution. We do not position ourselves as a product supplier into the mining sector; we position ourselves as a partner and solutions provider.” “With capex expenditure quite limited, today’s mining market dynamics are heavily focused on opex optimisation. We have to look at efficiency in output, and this is
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really where Metso adds value to the end user, partnering with mines in their operations and assisting them in achieving their goals. “What we find benefits all stakeholders is the great increase in dialogue and communication. We are far more closely aligned in terms of strategic objectives, which means we can assist them in getting to where they need to be. When you look at Metso as a value-added partner, this is where you see how we differentiate ourselves from the competition.” Looking beyond South Africa, Abrahams identifies some key markets where Metso is poised to increase its visibility and activity. “One would be the DRC where we are active but not sufficiently so, and the same goes with Zambia and Botswana. We will be strongly focused on increasing our activities for 2018. “Over the last few years there
has been a lot of focus on the South African Market, and while we see a continually increasing need here, it makes sense for us now to start investment and activity further out in the bordering countries, making sure we see the returns of market share and bookings. “It is really country and geopolitical and macro environment dependent, and something we will implement depending on these variables.” CHARTER FEARS Another variable, more volatile and close to home, surrounds the new Mining Charter. Published in June and strongly opposed by the industry, it puts extra levies on companies and increases blackempowerment requirements. Ratings agency Moody’s characterised the Charter as “credit
METSO
negative,” while the Chamber of Mines has slammed it as “an unmitigated disaster, both for the mining industry as a whole and South Africa.” Department of Mineral Resources Minister Mosebenzi Zwane has agreed not to implement the charter until there’s a judgment in the judicial review sought by Chamber. The review is scheduled to begin in December. “When the triple BE was first launched in South Africa, there was a huge uncertainty about how it would impact on industry,” recalls Abrahams. “There was quite a slow down in foreign direct investment and business activity, and with the potential new mining charter coming out, you can expect the same type of market reaction. “Corporations have to see how it is going to pan out, and when the dust settles you hope things will have normalised sooner rather than later.” Julian Pallium and Qasim Abrahams joined Metso at the
beginning of this year with a brief to make changes. “For us, it’s really about coming in and showing maybe a different way of working and thinking,” says Pallium. “It’s not often you get the opportunity to work with a company where the average years of service is in excess of 15. And this is because the people just love the company, the brand, and the products. NEW ROAD MAP “I think it has been a successful year because we have managed to shift the burden from what was probably not a very healthy state into a much healthier one.” Abrahams concurs. “Julian and I and the rest of senior leadership team have been focused on stabilising the ship and getting direction in terms of where we need to go. And by the end of this year we should be in a position where we have basically ticked all the boxes. “The one thing that stood out for me - and it is very seldom you can
find this in any organisation – was that the people in Metso, specifically in South Africa, want change and were looking for it; looking for solid leadership, which they seem to feel they have, and have embraced with open arms the new road map. “It is one of the hardest challenges to get an organisation to jump on board a dramatic shift such as the one we are putting it through. And in this case they are saying, ‘Thank you for doing this.’
METSO +27 11 961 4000 metso.ir@metso.com www.metso.com
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AFRICA
THE BUSINESS MAGAZINE FOR AFRICA’S INDUSTRY LEADERS
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Issue No.64
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NECSA:
Environmental Approval Confirms Nuclear Progress
ALSO IN THIS ISSUE:
SKA / Transnet / Metso / AVBOB
A S F E AT U R E D I N
ENTERPRISE AFRICA
OCTOBER 2017