www.miningglobal.com
June 2017
BIG HITTERS 10 LARGEST MINING COMPANIES IN THE WORLD
DIGGING THROUGH DATA UNEARTHED SOLUTIONS: HACKING IN A MINING WORLD
TRENDSETTING DELOITTE GLOBAL AND MINING IN 2017
PT MERDEKA COPPER GOLD TBK AND ONE OF INDONESIA’S FINEST MINES
29 – 31 AUGUST 2017
Sydney Showground, Sydney Australia
ASIA-PACIFIC’S INTERNATIONAL MINING EXHIBITION Australia’s most significant showcase of mining technology, equipment and services.
AIMEX WILL FEATURE:
▶ The largest showcase of suppliers both locally and internationally
▶ A free to attend operationally focused conference
▶ A dedicated platform launching new-to-market technology
REGISTER NOW AT aimex.com.au
EDITOR’S COMMENT
WORLD BEATING WELCOME TO THE Welcome to the June issue of Mining Global! Our cover star is PT Merdeka Group, which through the financially and environmentally sound Tujuh Bukit Project, places Indonesian mining on the world stage. Also in this month’s issue, we asked the big questions facing the mining industry in 2017 to Deloitte Global, who dutifully answered in the form of Mining industry leader Phil Hopwood to look at the mining industry of today, and the one of tomorrow. The industry by its very nature digs to unearth solutions to the world, but in some cases, it can unearth problems, challenges that will require the special skills of technology entrepreneurs of the world to answer. This is where Unearthed Solutions comes in. Through unique hackathons, Unearthed Solutions connects entrepreneurs to major mining moguls, in a bid of solving the industry’s problems. Forbes unleashed its 100 largest public companies recently, so Mining Global picked out 10 of the largest mining companies to feature on that list.
Enjoy the issue! Dale Benton Editor dale.benton@bizclikmedia.com
F E AT U R E S
08 PROFILE
A Q&A ON THE MINING INDUSTRY OF TODAY, AND TOMORROW TECHNOLOGY
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DIGGING THROUGH DATA TO UNEARTH SOLUTIONS 4
June 2017
LIST
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10 OF THE WORLD’S BIGGEST MINING COMPANIES
C O M PA N Y P R O F I L ES
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Guinea Ministry of Mines and Geology Africa
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PT Merdeka Copper Gold Tbk Asia
SMB Société Minière de Boké Africa
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Dacian Gold Australia
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MININGINVESTMENT 12 - 14 JUNE 2017
EUROPE
JUMEIRAH FRANKFURT, GERMANY
Where Miners, Investors and Service Providers Converge in Continental Europe Mining Investment Europe is a strategic mining
conference and exhibition for leaders of the mining, quarrying and construction materials industries, bringing together 250 attendees from 20 countries. Ministers, mining companies, investors and service providers travel from all over Europe, Asia, Africa, Americas and Middle East for three days of partnering, networking and business matching in Frankfurt. As one of the world’s leading financial hub, Frankfurt is the ideal location to attract mining companies, investors and their partners from across the entire region. At the conference, various topics such as key issues disrupting & innovating the mining sector, insights on the mining landscape, mining finance and business strategies will be discussed. Mining Investment Europe will bring in top notch business thought leaders to share their insights with the delegates. The conference will also provide plenty of networking opportunities through roundtable discussions and cocktail drinks reception.
Besides the conference, the exhibition also provides a great opportunity for expanding connections, launching new products and forging new business partnerships. With key buyers and industry leaders conveniently located under one roof, it is also an excellent branding platform. This event has already attracted global sponsors, investor and ministerial speakers from Africa, Europe, Americas, Asia and Middle East. Mining Investment Europe is organised by Spire Events (Singapore) and is part of the global Mining Investment Series. The full calendar of the latest global Mining Investment conferences can be found at www.spire-events.com.
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SNAPSHOT OF SPEAKERS
JAVIER CORDOVA Minister Ministry of Mining, Ecuador
Gold sponsor
ROBIN GRIFFITHS HARRY SANDSTROM DR KEITH WEINER Director CEO Chief Technical Mining Finland Monetary Metals, Strategist USA ECU Group, UK
Silver Sponsor
Bronze Sponsors
HE ARCH DARIUS ISHAKU
Executive Governor Taraba State, Nigeria
Spotlight Sponsors
Take Advantage of our Special Offer to Attend and Exhibit Today! Contact Maureen Beatriz at +65 6717 6019 or maureen.beatriz@spire-events.com Follow us on social media @MiningInvmt
Mining Investment Events
www.mininginvestmenteurope.com
Mining Investment
Mining Investment Conferences
Spire Events
A Q&A ON THE MINING INDUSTRY OF TODAY, AND TOMORROW In our previous issue, Deloitte Global revealed the 10 trends facing the mining industry in 2017, so we pinned down the Mining industry leader at Deloitte to look at the current climate of the mining world, and more importantly, where it looks to be heading. Written by: D A L E B E N T O N
PROFILE • WHO ARE YOU AND WHAT DOES YOUR ROLE ENTAIL? My name is Phil Hopwood, I’m Deloitte’s Global Mining industry leader. Our group encompasses practices based in Canada, US, Australia, Middle East, South Africa, Russia, UK, China, South East Asia, Chile, Colombia, Brazil and Peru. I lead a core leadership team of 80+ Mining professionals, growing relationships with key global clients in the Mining sector, developing eminence and thought leadership, and supporting geography-based practices. I’m also a part of Deloitte’s Global Energy & Resources industry group executive team. • HOW DOES DELOITTE ENGAGE WITH THE MINING INDUSTRY? Deloitte’s Mining practitioners talk regularly with our clients to understand the challenges and opportunities the industry is facing. We work hard to keep ahead of the curve and deliver unique and forward-looking insights via our research and thought leadership, drawing on our 10 Mining Centers of Excellence across the globe. • TECHNOLOGY AND INNOVATION IS KEY TO THE FUTURE OF THE MINING INDUSTRY, BUT LOOKING AT THE MINING INDUSTRY OF TODAY AND OVER THE LAST FIVE YEARS, HOW MUCH OF A ROLE HAS IT PLAYED? With the hit the industry took in terms of falling commodity prices, finding ways to cut costs and 9
PROFILE improve efficiencies was paramount. But there’s only so much you can do to drive out costs. The important thing is for companies to keep at it even when commodity prices rise and take innovation beyond isolated technology solutions. • OVER THE LAST FEW YEARS IT CAN BE SAID THAT THE INDUSTRY HAS FACED SIGNIFICANT DOWNTURNS, WITH LARGE FOCUSES ON REDUCING COSTS AND INCREASING PRODUCTIVITY – HOW HAS THIS ATTITUDE BEEN REFLECTED ACROSS THE INDUSTRY? Cost-cutting can only take you so far before you hit diminishing returns. This means the low-hanging fruit is gone and so are the easy wins. Many players in the industry recognized this and sought out new technologies to improve efficiency and boost productivity. But to truly get to the next layer of efficiency gains, miners will have to foster innovation by adopting the right systems, technologies, and culture.
“MINERS NEED TO BE VERY SENSITIVE ABOUT THE DANGEROUS IMPACT OF MINING ON THE COMMUNITIES THAT SURROUND THEM. REHABILITATION AND RELINQUISHMENT OF CLOSED MINES TO COMMUNITIES IS EXTREMELY IMPORTANT AND THIS IS SOMETHING MANY MINERS ARE ALREADY FOCUSING ON” PHIL HOPWOOD
GLOBAL MINING INDUSTRY LEADER AT DELOITTE
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A Q & A O N T H E M I N I N G I N D U S T R Y O F T O D A Y, A N D T O M O R R O W
• WITH TECHNOLOGY & INNOVATION, RISK IS INESCAPABLE, DO YOU FEEL THAT THIS IS EVIDENT IN THE INDUSTRY, AFTER ALL – IN THE BID FOR A SUCCESSFUL AND COST EFFECTIVE FUTURE, BEING THE FIRST ADOPTER COULD VERY WELL END BADLY. As mining companies reinvent themselves through technology— specifically the use of digital, the Internet of Things, and the cloud—the threat of cyber-attack will naturally grow. Increased digital integration between systems, while essential these days to enhance efficiency, open up companies to cyber risk. Many (if not all I would suggest) major mining companies have experienced cyberattacks in the past several years. But that doesn’t mean abandoning advanced technologies—it just means companies need to invest in security at the same pace as they invest in innovative solutions. If you are hacked, you should have processes in place to quickly respond. • WITH THE TRACKING THE TRENDS REPORT RECENTLY RELEASED IS NOW THE
TIME FOR OPTIMISM ACROSS THE INDUSTRY? The demand for commodities is not going away anytime soon. Given the fluctuation of commodity prices, the key to success for mining companies is all about learning to live at low commodity prices and then taking advantage of upticks as a time to invest in exploration and new projects. • ONE PARTICULAR TREND THAT IS EMERGING MORE AND MORE IS JOINT VENTURES AND PARTNERSHIPS, THIS WAS IDENTIFIED AS MUCH IN YOUR REPORT, HOW CAN THIS “ECOSYSTEM” APPROACH BRING FORWARD A POSITIVE AND MORE PROSPEROUS INDUSTRY? Governments and miners have continually struggled to maintain open and cooperative dialogues. Resource-rich countries are now trying to balance their desire to attract mining investment with their need to raise the funds to support local economic and social development. Mining companies need to act on this movement by governments and work to understand their concerns 11
PROFILE and build better relationships. They need to communicate more effectively and foster cooperation among communities, labor unions, businesses, governments, special interest groups, and investors. It won’t be easy: all over the world there continues to be confrontations between governments and miners. But companies that crack this code stand to win in the long run. Beyond de-risking their projects and helping the communities at large, they turn stakeholder management from merely a compliance effort into lasting competitive advantage. • BEING A RESPONSIBLE MINER CAN OFTEN PROVE KEY IN DETERMINING THE SUCCESS OF A MINING COMPANY AND MORE AND MORE MINING COMPANIES ARE STRIVING TO DO MORE ON THIS FRONT, BUT HOW BIG A ROLE DO YOU FEEL IT WILL CONTINUE TO PLAY IN THE FUTURE OF THE MINING INDUSTRY? There is no doubt that concerns about mining have been and continue to be on the rise. From clean water to safety to greenhouse gas (GHG) emissions, the issues communities are raising 12
June 2017
are ongoing and the mining industries’ response will be critical in determining how big a role it will play in their futures. Miners must sharpen their focus on environmental sustainability and energy management. A lower energy footprint represents more than the right economic answer; it’s also the right solution for the communities and environments integral to the mine. Evolving technological innovations can enhance miners’ energy transformation, with advances enabling fuel substitution (i.e., replacing diesel with sustainable energy sources), electrification of equipment, and a growing capacity for energy selfgeneration. Add in analytics that enable optimized energy use, and the potential for greater efficiency is multiplied. New technologies are also allowing for reduced water use, with several companies exploring dry processing mine designs that eliminate the need for water entirely. And sensor-based ore sorting is helping to identify minerals and waste prior to extraction, vastly reducing the amount of water and energy used at the pre-concentration stage.
A Q & A O N T H E M I N I N G I N D U S T R Y O F T O D A Y, A N D T O M O R R O W
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PROFILE • YOU TOUCH UPON THE MENTAL WELLBEING OF MINE WORKERS OFTEN BEING LOST AMONGST THE ISSUES OF COMMODITY PRICES AND STREAMLINING BUSINESS – HOW IMPORTANT IS IT THAT THE VERY PEOPLE WHO HAVE BOOTS ON THE GROUND
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AND CONDUCTING THE WORK OF THE MINE ARE LOOKED AFTER AND CARED FOR? To help ensure sustainable productivity improvements, companies must also foster healthy workforces and inclusive workplaces. Here’s why: companies that struggle with a high incidence of
A Q & A O N T H E M I N I N G I N D U S T R Y O F T O D A Y, A N D T O M O R R O W
mental health disorders and that fail to embrace diversity see productivity falter. Unfortunately, the mining industry does not get high marks in this area. In addition to the stress of the mine site and its impact on workers, the sector’s weak performance and the unrelenting focus on improving productivity are putting many managers under greater pressure than ever before. The industry is seeing a rising tide of depression, along with a growing incidence of suicide and attempted suicide at the leadership levels. The mining industry also lags when it comes to inclusiveness. Recently the mining industry has begun elevating both wellness and diversity on corporate agendas. To address mental health issues, some companies are following the framework set out by the Minerals Council of Australia. Elements include both prevention controls and preparation for recovery—including fostering a culture that supports wellbeing. • WHERE DO YOU SEE THE INDUSTRY HEADING OVER THE NEXT 5-10 YEARS? There is no doubt that desire for commodities in the world is going to continue. Some say we will be in
“THERE IS NO DOUBT THAT DESIRE FOR COMMODITIES IN THE WORLD IS GOING TO CONTINUE” PHIL HOPWOOD a supercycle for the next five to ten years. The response from miners and the resources sector will be interesting to watch. I believe we’ll see miners emerging who have configured their organizations to withstand volatility in the commodity markets. Diversity is another topic that will continue to grow in importance over the next five to ten years. The mining industry has historically been male dominated. But facing a skills shortage and competing with other industries for a workforce with the right sets of skills will necessitate a shift in thinking and a push for greater diversity. The industry will also continue to become more socially and environmentally conscious. And interestingly, I believe social media will play a big role in that process as it will push miners to be more open and transparent about their stories. 15
MININGINVESTMENT 24 - 25 JULY 2017
INDIA
INDIA INTERNATIONAL CENTRE, NEW DELHI, INDIA
Where Miners, Investors and Service Providers Converge in South Asia Mining Investment India is a strategic mining
conference and exhibition for leaders of the mining, quarrying and construction materials industries, bringing together 350 attendees from 35 countries. Ministers, mining companies, investors and service providers travel from all over Asia, Europe, Africa, Americas and Middle East for three days of partnering, networking and business matching in New Delhi. As one of the major South Asian commercial hub, New Delhi is the ideal location to attract mining companies, investors and their partners from across the entire region. At the conference, various topics such as key issues disrupting & innovating the mining sector, insights on the mining landscape, mining finance and business strategies will be discussed. Mining Investment India will bring in top notch business thought leaders to share their insights with the delegates. The conference will also provide plenty of networking opportunities through roundtable discussions and cocktail drinks reception.
Besides the conference, the exhibition also provides a great opportunity for expanding connections, launching new products and forging new business partnerships. With key buyers and industry leaders conveniently located under one roof, it is also an excellent branding platform. This event has already attracted key Ministerial, mining and investor speakers and sponsors from India and beyond. Mining Investment India is organised by Spire Events (Singapore) with local partner Chamber of Commerce and Industry (CCI) of India. It is part of the global Mining Investment Series. Full calendar of the latest conferences can be found at www.spire-events.com.
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SNAPSHOT OF SPEAKERS
PIYUSH GOYAL Minister of State (IC) Power, Coal, New & Renewable Energy and Mines, India
D N PRASAD Advisor (Projects) Ministry of Coal, India
NAVEEN JINDAL
Chairman Jindal Steel Limited
KAMLESH THAKUR
Chairman Prime Investrade Limited
DR SARAT KUMAR ACHARYA
Chairman and Managing Director NLC India Limited
Take Advantage of our Special Offer to Attend and Exhibit Today! Contact Karen Boh at +65 6717 8500 or karen.boh@spire-events.com
Silver Sponsor
Jointly organised by
Spire Events
Chamber of Commerce and Industry of India
Follow us on social media @MiningInvmt
Mining Investment Events
www.mininginvestmentindia.com
Mining Investment
Mining Investment Conferences
DIGGING THROUGH DATA TO UNEARTH SOLUTIONS How Unearthed Solutions plans to solve challenges facing the mining industry by empowering entrepreneurship Wr i t te n by: DA LE B E NTO N
TECHNOLOGY WHEN YOU THINK of a hackathon what springs to mind? The chances of you thinking of the modern mining industry are quite slim, but that’s exactly what Unearthed Solutions is doing, bringing hackathons to the resources industry. But what role do hackathons play in the industry? “Hackathons are a means of quickly prototyping solutions to industry challenges and opening up the realms of possibility. How technology can unlock and solve a problem that a global resources company has,” says Justin Strharsky, Director, Unearthed Solutions. Unearthed Solutions is a company
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that believes the answer to many of the world’s industry problems, including those in mining and resources, lies in the minds of entrepreneurs. Through hackathons, online challenges, and a technology accelerator, Unearthed Solutions provides opportunities for entrepreneurs to address these industry challenges head on and improve the efficiency and competitiveness of the industry as a whole. But while hackathons are a major factor in the way in which Unearthed works, Strharsky is keen to stress that the company certainly didn’t invent them.
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“We didn’t invent them, but what we are doing is applying the methodology of hackathons to opportunities in the resource sector,” he says. “Unearthed is about doing something, rather than just talking about it. We connect entrepreneurs and technologists to specific opportunities in the resource sector through hackathons,” The hackathons, which Unearthed has been running since 2014, are an intense, 54-hour activity designed to connect innovators to challenges and big data from the resources sector. The directors of Unearthed previously conducted hackathons in other industries, but turned their attention to the resources industry because they identified a big opportunity. “There is close to $1 trillion in economic impact coming to the global resources sector from disruptive technologies by 2025. At Unearthed our goal is to empower entrepreneurs to create businesses that can deliver these technologies and help the industry become more efficient and competitive by adopting them,” he says. Unearthed acts as an innovation platform for the entire resources sector.
The company is headed up by three directors, Justin, Zane Prickett and Paul Lucey. Each of these men have years of experience behind them, with Justin being a recognised leader in Perth’s growing tech startup ecosystem. Strharsky often recalls his experience in technology startups as a foundation for the formation of Unearthed, to help companies avoid certain mistakes that he himself has experienced over time. The mining industry is one that has somewhat lagged with regards to innovation and adopting new technologies, especially when compared to other industries. This is a feeling shared by Strharsky, who notes that the mining industry is often referred to as unsophisticated; a reputation built on perception. “Early successes in automation came out of mining. All kinds of scientific and technological advancements have origins in mining also. With technology, it is part of a longer process in the mining industry,” he says. Strharsky believes that the recent technological boom we are witnessing across the world is happening so fast 21
that mining is just unfortunate that it has fallen behind in the adoption curve with certain technologies such as data analytics and Internet of Things (IoT). So, with a hackathon, is the ultimate goal of bringing new technologies into the mining industry effective immediately? Not quite. There are instances where the results of a hackathon have had a substantial, if not immediate impact on the wider industry. Strharsky points 22
June 2017
to a recent example with Newcrest Mining. In March this year, Newcrest once again partnered with Unearthed for a hackathon held in Melbourne. On opening night of the event, Newcrest Chief Financial Officer Gerard Bond explained how last year’s Unearthed Brisbane hackathon led to Newcrest partnering with participant Dr Penny Stewart of PETRA Data Science to deploy SAG mill overload downtime prevention
D I G G I N G T H R O U G H D ATA T O U N E A R T H S O L U T I O N S
algorithms at Lihir mine in January. “Since then we haven’t had any overloads, and typically we have hundreds of overloads per year”, Mr Bond said. Another example of this substantial industry impact is Newton Labs, a mining technology company based in Australia, which was formed off the back of winning an Unearthed hackathon event in 2014. Upon graduating from the pilot of the Unearthed Accelerator program in 2015, the startup won a WA Innovator of the Year award and now deploy their technology for detecting the size of material in haul trucks on the sites of tier-one mining operators. “This specific case took longer to get to proof of concept and finding a working model, but is impacting on a problem that is worth $1billion in Australia alone,” Justin explains. In an industry that is supposedly slow at embracing technology, the response to hackathons has been extremely positive. It seems that the mining industry is well and truly ready to have the conversation regarding technology and the role entrepreneurship will play in enabling the technological future of the industry.
“There is close to $1 trillion in economic impact coming to the global resources sector from disruptive technologies by 2025” - Justin
Strharsky, Director, Unearthed Solutions Major mining companies are welcoming the hackathons that Unearthed are rolling out. Newcrest and Austmine’s involvement with them is a testament to this, but for Strharsky, the industry is truly excited by the potential technology holds in reducing the bottom line. “Mining companies are completely on board and ready to support an international community of innovators, tapping into the digital 23
TECHNOLOGY skills that they need to bring business forward,” he says. Last year, Unearthed rolled out nine hackathons, both locally across Australia and internationally in Cape Town and San Francisco. This year will see a series of hackathons covering Toronto, Melbourne, Buenos Aires, Houston, Brisbane, Perth and a return to Cape Town once more. The choice of location is a deliberate one, as the company responds to the way in which the cost of learning technology skills is significantly reducing in the modern world. “Anyone with an internet connection can open a browser and learn how to be a data scientist these days,” he says. “This means that the best people for solving these problems can be anywhere in the world.” Another means of discovering and tapping into the international pool of talent is through a series of online competitions that run alongside the hackathons. Where the hackathons are about exploring the opportunities and possibilities in the challenge, the online competitions are driven by knowing the company’s desired result. Competitions such as Phase-X, in which Unearthed partnered 24
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with BHP Billiton to find the best teams of university students and research organisations worldwide to create a superior algorithm for optimising open pit mining phases. “The power of that approach is that we can put that distributed talent to work in competitive processes to achieve the best result,” says Strharsky. Through these competitions, companies such as BHP and other major players can connect with people with the necessary skillsets to solve their biggest challenges in what Strharsky calls a
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“crowdsourcing” of the best solutions. In addition to hackathons and online competitions, Unearthed has launched a six-month mentor driven accelerator program to provide support to entrepreneurs to transform their technology prototypes to commercially ready products for global markets. “Why make bets on individual transformative technologies when you can build an engine that sustainably generates hundreds of them? We like to think that Unearthed is that engine”, Justin says. For Strharsky, who has been an
active player in technology startups for the best part of his career, Unearthed revolves entirely around providing opportunities for talented entrepreneurs and innovators. “The tool-set for running a tech startup is empowering for individuals. It’s a way of delivering value to our industry customers and chasing after the challenging questions of our time,” he says. “I’m extremely passionate about the power of entrepreneurship making a difference to the stakeholders we interact with.” 25
TOP 10
10 OF THE WORLD’S BIGGEST MINING COMPANIES The mining industry stretches far and wide across the entire world, a true global industry. Here, in no particular order, Mining Global looks at 10 of the biggest mining companies in the world, taken from Forbes’ list of the world’s biggest public companies Writ ten by: DALE BE NTON
TOP 10
2 Glencore
1 Alcoa Alcoa, founded in 1888, is a global aluminium and metals engineer and manufacturer. Aluminium from the company is utilised in aircraft, automobiles, commercial transportation, packaging, oil and gas, defence and industrial applications all over the world. The company has seven active bauxite mines globally, operating four of them and producing more bauxite than any other company in the world.
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Glencore is a major mining player. As one of the largest global diversified natural resource commodity companies in the world, Glencore produces and trades more than 90 commodities. Glencore has active operations in Africa, South Africa, Asia, Australia, North America, South America as well as throughout Europe. In amongst its operations, which include Energy and Agriculture, Glencore’s major operation is in Metals and Minerals. Copper, Zinc & Lead, Nickel, Ferroalloys, Alumina & Aluminium and Iron Ore make up Glencore’s metals and minerals footprint.
1 0 O F T H E W O R L D ’ S B I G G E S T M I N I N G C O M PA N I E S
4 Rio Tinto
3 Coal India Coal India Limited is an organised state owned coal mining corporate that had a production of around 79 million tonnes of coal. Coal India operates across 82 mining areas. The company has a wide number of coal and energy products, including coking coal, semi coking coal, non-coking coal, washed and beneficiated coal. The company was founded in 1973.
Founded in March 1962, Rio Tinto is now recognised as one of the leading mining companies throughout the world. Operating through five product groups, including Aluminium, Copper, Diamonds and Minerals, Energy and Iron Ore. Rio Tinto currently operates in close to 32 countries across six countries, including Brazil, France, Chile and Canada but the company has the strongest footprint in Australia and North America.
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6 Norlisk Nickel Norlisk Nickel is the world’s largest producers of nickel and palladium, as well as one of the world’s largest producers of platinum and copper. The company is also a producer of cobalt, rhodium, silver and gold. The Russian based mining company has a number of operations across the world, including Africa, Australia, Finland, and of course Russia.
5 Anglo American With a global portfolio of worldclass competitive mining operations and undeveloped resources, Anglo American strives to meet the growing consumer-driven demands of the world’s developed and maturing economies. Anglo American produces copper, platinum, diamonds (through De Beers), Iron Ore Manganese, Coal and Nickel. Founded in 1917, the company boasts a global workforce of around 113, 000 people worldwide.
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7 Barrick Gold In 2016 alone, Barrick Gold produced 5.52 million ounces of gold. More than 75 percent of its gold production comes straight out of its Americas operations, including Argentina, Canada, Dominican Republic, Peru and the U.S. The company was founded in 1983 and is projecting production levels of around 5.2/5.6 million ounces of gold for 2017
8 Freeport McMoRan Freeport McMoRan is a major global player in the gold, copper and molybdenum markets. Operating across North America Copper Mines, South America Copper Mines, Africa Mining, Indonesia Mining and Molybdenum, Freeport has significant proven and probable reserves of copper, gold and molybdenum. To date, Freeport stands as the world’s largest publicly traded copper producer. As of December 2016, this stands at an estimated totalled 86.8 billion pounds of copper, 26.1 million ounces of gold and 2.95 billion pounds of molybdenum.
9 Newmont Mining Newmont Mining is a global gold producer with significant gold and copper properties in the U.S, Australia, Peru, Indonesia, Ghana, Canada and Mexico. Newmont has well over 90 years of experience since its inception in 1921. The company is also a global frontrunner when it comes to sustainability and ethical operations, striving to maintain world class social and environmental practices.
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TOP 10
10 Vedanta Resources
With interests in aluminium, copper, zinc, lead, silver and iron ore – Vedanta Resources is a global diversified company. Split up into a number of segments, Vedanta’s footprint stretches far and wide through Hindustan Zinc, Bharat Aluminium and Sesa Goa. Vedanta is a proud leader in sustainability, with highlights throughout 2016 including a $3.2 billion investment in community development, a 50 percent non-hazardous waste recycling rate and a global carbon footprint of 42 million mt.
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INDONESIAN MINING
ON THE WORLD STAGE Written by Nye Longman
Produced by Richard Deane 35
PT Merdeka Copper Gold Tbk: Financially and environmentally sound, the Tujuh Bukit Project in East Java is set to be one of Indonesia’s finest mines
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ith production already underway at Indonesia’s Tujuh Bukit Project in East Java, the company in charge, PT Merdeka Copper Gold Tbk, is already proving its worthiness for such an important undertaking. An Indonesian-owned operation, the company is set to oversee a profitable, safe, and sustainable mine that will pay dividends for shareholders as well as the local community. We speak to Merdeka’s CEO Colin Moorhead to discover how one of the country’s most promising mines in recent years will make the grade. With an estimated Mineral Resource of some 99
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MINING
million tonnes of ore at an average grade of 0.8 grams per tonne of gold, and 25 grams per tonne of silver, the near-surface ore deposits contain approximately 2.45 million ounces of gold and 79 million ounces of silver. The underlying porphyry deposit has an Inferred Mineral Resource of some 1.9 billion tonnes at estimated grades of 0.45 percent copper and 0.44 grams per tonne gold making it one of the largest projects of its kind in the world.
All told, the porphyry is estimated to contain 28 million ounces of gold and 19 billion pounds of copper. “I come from 30 years mining experience working on some of the largest mines in Australia and PNG,” he explains. “I’ve been asked to build a technical team capable of taking Tujuh Bukit to those standards. I’m proud to say we could take anyone from Australia and they would be impressed with our
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MINING
construction and operating standards”. Operations Merdeka is listed on the Indonesia Stock Exchange following a successful IPO in 2015 and controls the companies that hold the Tujuh Bukit mining leases. These consist of PT Bumi Sukesindo (BSI), which is permitted for mining production, and PT Damai Sukesindo (DSI), which holds the adjacent exploration permit. The company is fully engaged in Indonesia’s mining industry and, working to international standards, is focussed on developing the country’s gold, silver, copper and other mineral deposits. The company has three major Indonesian shareholders, one of which is PT Saratoga Investama Sedaya, Tbk – the country’s premier investmentholding company, PT Provident Capital Indonesia, a leading investor in Southeast Asia, and Pak Garibaldi Thohir. This winning combination ensures that the mine will remain liquid throughout its life. “The technical mining potential in Indonesia is huge,” Moorhead comments. “It has some of the
“What we aim to do is create an internationally respected, high standard and high integrity mining company” – Colin Moorhead, CEO
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PT MERDEKA COPPER GOLD TBK
biggest gold and copper deposits This could set us up as a 30 plus in the world. What we aim to do is year copper-gold producer.� create an internationally respected, The oxide gold silver development high standard and high integrity commenced operations in December mining company. Tujuh Bukit has a and produced its first gold in March typical epithermal gold oxide cap 2017, just 18 months after construction that has been developed as an open work started. This mine offers low pit mine, overlying a two billion tonne costs and high margins. Using sulphide porphyry copper conventional open pit mining, deposit that could be the ore is crushed and The number of developed in stages agglomerated before staff at PT Merdeka as a series of mass being stacked on a underground mines. heap leach pad where Copper Gold Tbk
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PT MERDEKA COPPER GOLD TBK
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the gold is dissolved in a weak cyanide solution. The pregnant solution is then pumped to an ADR (absorption, desorption, recovery) plant where gold and silver is recovered and produced as dorÊ. Initially the operation will process four million tonnes of ore annually and will produce on average 100,000 ounces of gold and up to 300,000 ounces of silver per year over the next decade. Looking further ahead, Merdeka is also conducting a study on expanding the mine’s heap leach capacity to 50 million tonnes and its production
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PEOPLE ACHIEVEMENT DEDICATION
Madhani provides clients with a complete pit to port mining solution. Our modern fleet of mining equipment includes hydraulic excavators ranging up to 350 tonne & haul trucks up to 150 tonne capacity. Madhani construction services cover all commodity types and include mine site infrastructure and ore processing/handling facilities. Construction capabilities include airstrips, containment dams, equipment maintenance workshops, site camps, fuel storage tank-farms, explosive magazine facilities and site office complexes. We can supply, install and operate crushing plants, conveyor systems and port loading facilities. We are always ready to meet the needs of our clients no matter where they are located.
Office Address: PT Madhani Talatah Nusantara, Alamanda Tower 12th Floor, Jl. TB Simatupang Kav. 23-24, Jakarta 12430, Indonesia Web: www.madhani.co.id | Email: info@madhani.co.id
CONSTRUCTION AND MINING CONTRACTORS
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rate from four million tonnes to six million tonnes per annum. The second opportunity at Tujuh Bukit is to develop a series of underground mines to exploit the massive porphyry copper gold deposit that underlies the oxide mine. “We are currently doing the pre-engineering to put an exploration decline into the porphyry which sits below the oxide mine we are operating,” Moorhead adds. “That upper high grade zone (UHGZ) of that deposit is estimated to contain about 300 million tonnes at 0.8 percent copper and 0.8 grams
of gold.” The decline will help Merdeka acquire the data needed to support a prefeasibility study for the first mass underground mine. Sustainable mining The journey to developing one of Indonesia’s best deposits, and with that, one of its most reputable mining companies, has not been easy. Issues over ownership and permitting slowed progress before a single brick was laid. And once that had been taken care of, the company had the weather to contend
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PT MERDEKA COPPER GOLD TBK
of PT Bumi Sukesindo (BSI), which is permitted for mining production, and PT Damai Sukesindo (DSI), which holds the adjacent exploration permit. The company is fully engaged in Indonesia’s mining industry and, working to international standards, is focussed on developing the country’s gold, silver, copper and other mineral deposits. The company has three major Indonesian shareholders, one of which is PT Saratoga Investama Sedaya, Tbk – the country’s premier investmentholding company, PT Provident Capital Indonesia, a leading investor in Southeast Asia, and Pak Garibaldi Thohir. This winning combination ensures that the mine will remain liquid throughout its life. “The technical mining potential in Indonesia is huge,” Moorhead comments. “It has some of the biggest gold and copper deposits in the world. What we aim to do is create an internationally respected, high standard and high integrity mining company. Tujuh Bukit has a typical epithermal gold oxide cap that has been developed as an open pit
“We have a commitment to spend 1.5 percent of our return revenue capital on local projects” – Colin Moorhead, CEO
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TOTAL EXPLOSIVES SOLUTION! WHY DAHANA? DAHANA’s line of business covers Explosives Manufacturing, Drilling & Blasting Services and Related Services for customers throughout Indonesia and ASEAN Region. Dahana’s explosives users comprise of Mining Industry, both metal and non metal; Quarry & Construction such as cement, asphalt and andesite quarries and construction projects such as dams, roads, tunneling, irrigation, harbor and building demolition; Oil & Gas Sectors such as oil well perforating, seismic prospecting and also defense related. Owing to its 25-year experience, DAHANA enjoys extensive customer’s trust for its proven exemplary integrated explosives services for various purposes and conditions, including bench blasting, trench blasting and underwater blasting, which are quite complex. Dahana has been able to handle the whole blasting process, starting from the designing, calculation, drill hole preparations, explosive configuration, explosives supply, blasting, up to the operational security. DAHANA has been in operation for drilling and blasting work in more than 20 sites scattered in Indonesia under the support of its On Site Plant (OSP) and Mobile Manufacturing Truck (MMT), among others, is the one in operation at Mine Site of PT Bumi Suksesindo (BSI) in Banyuwangi, East Java.
Local Content
Customization
Go Green
As a domestic company, DAHANA uses local materials in the country for the products and services it produces. It is a form of approbation and support for the independence of the domestic industry.
With the support of Energetic Materials Center (EMC) as a center for production and research and development of energetic materials, DAHANA is able to answer the challenge for explosive material tailored to a variety of terrains and purposes.
DAHANA constantly grows along with the environment in their business activities The Green Concept applied to both of the management of buildings and products has resulted in numerous awards both nationally and internationally.
Menara MTH 17th floor, Jl. MT Haryono Kav. 23 Jakarta, Indonesia
www.dahana.id corporate@dahana.id
Total Service Solution The integrated Services of DAHANA range from production of explosives, drilling and blasting services to related services such as demolition,warehousing, consulting and licensing as well as the mobilization of explosives, also the explosives services for defense as propellants for large munition and small munition, rocket, PETN and warplanes bomb.
PT MERDEKA COPPER GOLD TBK
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OUR CLIENTS LIKE OUR VALUES • Openness • Trust and Integrity • Passion for Quality • Teamwork • Responsibility for our Actions • Can-do: Safely PT Prasmanindo Boga Utama, established in 1985, is one of Indonesia’s preferred Catering and Camp Services partners in the Mining and Oil & Gas industries. We strive to be a best-in-class provider of contract foodservice and support services; renowned for our professionalism. Better known in the market as PBU we predominantly operate in remote locations across the archipelago with leading Indonesian, Multinational and International clients. Our vast experience can be applied to the most demanding of challenges and we are committed to consistently deliver superior service in the most efficient way, for the benefit of all our stakeholders.
PT. Prasmanindo Boga Utama,Wijaya Graha Puri Block F 33 - 34 Jl Wijaya II , Kebayoran Baru, Jakarta 12160, Indonesia +62-21-7206621 | www.ptpbu.com | pbujkt@ptpbu.com
Email: info@psi-ind.com Website: www.psi-ind.com
PSI Drilling Services & Support Consistently providing successful, cost effective drilling solutions throughout the South East Asian mining & energy sectors. Currently operating in Indonesia, Malaysia, Thailand, Laos & Myanmar
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with. Having centuries of experience locked into its workforce, Merdeka has been able to shrug off these risks, and ensure that the project has a positive impact on local businesses, the community, and the surrounding environment. No small order. “We had the wettest year on record which hampered our earth works considerably,” Moorhead says. “We were able to handle those impacts and
delays by using our status as an owner-executor. I think if we were using an EPCM arrangement we could have had a large cost blowout.” Unlike many players operating in the country’s mining space, Merdeka is fully owned by locals, with expats making up less than one percent of its workforce. But the company’s commitment to Indonesia doesn’t end there, as Moorhead explains: “On
2012
The year that PT Merdeka Copper Gold Tbk was founded
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SODIUM CYANIDE SUPPLY AND SERVICES • Dedicated production and supply to the gold mining industry • Secure, certified and robust supply chains • Unmatched safety and environmental performance • Sodium Cyanide handling and awareness training • Facility advice and technical support 24/7
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the community side we have a commitment to invest 1.5 percent of our revenue on community social responsibility (CSR) projects. “We are tailoring those projects to the needs of the people, which include capacity building, scholarships for kids, and helping businesses. We are in the early days of that.� The company initially also granted 10 percent of its shares to the government of The Regency of Banyuwangi, which has effectively granted rights for local people to participate in these mining projects. The further intention of the share grant is to provide the community of Banyuwangi Regency with sustainable economic benefits from the gold mining project.
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PT MERDEKA COPPER GOLD TBK
Protecting local water supplies is essential, and no fewer than six dams have been constructed with this specific purpose in mind. Moorhead adds: “We have two process water dams which take water from the catchment, one storm water pond which is a clay and plastic lined, and three environmental control dams that collects all the runoff. These can also handle the extreme rainfall events up to three times over. “We
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also have a detox system to manage cyanide and arsenic levels in excess process water, backed up by mercury scrubbers if required. Merdeka has also spent over 15,000 man-hours on safety training and continues to build skills and awareness in this regard. With the Tujuh Bukit Project now in production, Merdeka has its sights confidently set on the future dividends that a mine of this size and quality is certain to bring. Its shareholders
MINING
own and control a number of other Indonesian mining companies with assets and are looking for where it makes sense to consolidate those under Merdeka. “In three to five years’ time we will have that copper project to pre-feasibility level and ready to construct and potentially multiple operating mines producing a significant amount of gold per annum. If we are successful at that we could be a $3 billion company.�
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FOREWORD: AN INTERVIEW WITH GUINEA’S MINISTRY OF MINES AND GEOLOGY
WE ASKED DIAKHABY MAÏMOUNA OF THE MINISTRY ABOUT ITS ROLE IN THE COUNTRY’S MINING AND HOW IT GOES ABOUT CHAMPIONING RESPONSIBILITY Produced by Richard Deane 59
G U I N E A M I N I S T RY O F M I N E S A N D G E O L O G Y
Tell us briefly about the history of the Guinean mining Mining and the role that the Ministry plays in promoting and protecting it. Guinea’s mineral tradition is centennial. Since ancient times, Guineans have been exploiting gold; a fact notoriously recorded in the legendary voyage of King Kankan Moussa in 1325 to Mecca. However, it was not until colonial times that the mining industry was developed and the minerals riches of the country discovered, uncovering in the soil:
• 4 0 billion tons of bauxite, at more than 40 percent content of Al203, which represent over a third of global reserves of bauxite • 2 0 billion tons of iron ore, the largest and highest grade of untapped deposit of iron ore in the world • 700 tons of gold, and between 30 to 40 million carats of proven reserves of diamonds.
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The diversity and quality of the minerals coupled with 320 km of seacoast on the Atlantic allowing for evacuation through deep-water ports has helped the development of the Guinean mining Mining. Over the years, Guinea has risen to become both Africa’s largest producer and the World’s second-largest producer of bauxite. The mining industry accounted for about 15 percent of the country’s gross domestic product in 2016. Mineral exports of bauxite, diamonds and gold accounted for 80 percent of the nation’s total exports in 2016. With the advent of its transition into a democratic state in 2010, Guinea, through its Ministry of Mines and Geology, has undergone a series of reforms to promote transparency, accountability and sustainability in the mining Mining. The Ministry is keen on protecting and ensuring the judicious use of these resources for sustainable economic growth and development.
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Outline the importance of the forthcoming Symposium of Mines in raising the profile of Guinea. The organisation of this event in 2017 is pivotal to the department’s mining promotion policy. The Symposium Mines Guinée (SMG) is designed for a better understanding of Guinea’s mining and investments potential. The SMG will draw a clearer picture of Guinea’s business climate as well as the government’s strategic orientations and reforms. The Ministry’s goal is to appeal to More information about SMG is available online:
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key mining players and connect qualified investors to Guinea’s largely untapped resources and promising projects. Industry leaders, junior companies, investors, institutions will receive detailed briefings on mining and exploration projects. In short the SMG will allow us to develop a strong networking value chain. The aim is to organise the event on annual basis and make it West Africa’s definitive meeting place for mining professionals.
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Can you give us an overview of national industry developments and investment? The Ministry of Mines and Geology has implemented comprehensive and courageous structural and institutional reforms to enhance productivity, accountability and sustainability in the extractive industry. Those steps include among others: The modernisation of its mining cadaster which is now available online at www. guinea.miningcadastre.org The creation of a one-stopshop for mining projects, with an internet portal covering all relevant information on permits and authorisations. In total, 107 permits and various authorisations issued by 13 ministerial departments during the year 2016 can be found on the portal. The implementation of the Master Plan for Mine-Related Infrastructure Development, notably through the signing of the agreement to pool infrastructures
related to mines between major companies such as CBG, GAC, Rusal Dian-Dian and the State. The establishment of a fully operational National Mining Commission for greater transparency. The consolidation of these reforms initiated since 2010 has favored investment commitments in 2016 of more than $2.4 billion in the bauxite industry alone. Mining companies such as Dadco, Alcoa, Emirates Global Alumina, Anglo Gold Ashanti, Managem have all heavily invested in the Guinean mining Mining. Lenders such as IFC, Société Générale, BNP Paribas, UFK, Overseas Private Investment Corporation, Société Générale de France, Natixis, Crédit Agricole, ING, Africa Finance Corporation have in the past year alone financed many major mining projects in Guinea. Production in the bauxite industry is predicted to reach 60 to 80 million tons by 2020. Production in the gold Mining is expected to reach 65 millions tons by 2020.
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G U I N E A M I N I S T RY O F M I N E S A N D G E O L O G Y
What are the Ministry’s regulations and/or views on the importance of environmental responsibility? As stipulated in the Mining Code, any mining activity undertaken must comply with the legislation and regulations governing environmental protection and management as well as health. In particular, any application for an authorisation or mining operation permit must include an Environmental and Social Impact Study in accordance with the Environmental Code and its implementing regulations as well as internationally accepted standards in this area. Administrative requirements depend on the extent of the scheduled work, ranging from simple Environmental Impact Notice for an Exploration Permit to a detailed Environmental and Social Impact Study including for example a Hazard Study, a Risk Management Plan. Aside from these regulations and legislation, the Ministry of Mines
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and Geology has implemented an environmental and social strategic evaluation (ESES) process, as a tool of sustainable development enabling a better consideration at the national level of environmental and social concerns.
The ESES aims to: (I) a ssist the Government in identifying nationally the environmental and social impacts of existing and future mining activities so as to avoid, so as to avoid, mitigate or compensate them by adopting an appropriate mode of governance; (Ii) p rovide the necessary information and knowledge to support ongoing dialogue with stakeholders. Can you describe any current, relevant legislation? Guinea adopted a new mining code on 9 September 2011, which was amended by the 2013 Bill. The new amended code has been widely acclaimed.
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How important is sustainability? What is your major goal?  The Ministry of Mines and Geology main goal is to transform the non-renewable resources of Guinea into sustainable development gains for all stakeholders. In that spirit, the government in partnership with the World Economic Forum, the International Finance Corporation, UNDP, the African Minerals Development Center and GIZ, launched and achieved the Responsible Mineral Development Initiative (RMDI) during 2016-2017. The Ministry with its partners gathered together for seven months mining operators, local communities, civil society and the state around a shared mining vision to identify priority themes, areas for joint actions and approaches to sustainably advance Guinea mineral development. The recommendation that emanated from this initiative is informing the government’s national strategic plan for the mining Mining. The Ministry has a win-win and effective business approach to the development of the industry. In that respect, it has create a one-stop shop to promote greater efficiency in the delivery of non-mining permits and cut down on cost for mining companies. For a sustainable approach to community development, the Ministry in collaboration with the PNUD, elaborated last month a CSR policy for the mining Mining.
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GUINEA GOES INTERNATIONAL Written by Wedaeli Chibelushi Produced by Richard Deane 69
We talk to SOCIÉTÉ MINIÈRE DE BOKÉWINNING AFRICA (SMB-WAP) about its fastpaced strict compliance bauxite mining project in Guinea. Managing Director Frederic Bouzigues and CEO of the group’s Winning Logistics Services Bosco Lau explain the process
A
ccounting for 26.9 percent of the world’s total reserves, Guinea is the number one bauxite producing country globally. The small, yet-resource rich West African country exceeds competitors like Australia, and furthermore, Guinea is predicted to rapidly increase its bauxite exports in the coming years. Asian-Guinean consortium Société Minière de Boké-Winning Africa (SMB-WAP) plays a major role in this future. The consortium, consisting of four international entities, is currently mining bauxite in Guinea’s Boké region, then transporting it to China. SMB-WAP prides itself on “fast-tracking”, but “with strict compliance” – that is going from excavation to export in minimal time. To find out how SMP-WAP balances speed, compliance, sustainability and spending, we spoke to Managing Director Frederic Bouzigues and Bosco Lau, CEO of the group’s Winning Logistics Services. SMB-WAP was established in 2014. Frédéric Bouzigues, who has lead the group for two years,
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4
Members of the SMB-WAP consortium: • Winning Shipping Ltd • UMS International Ltd • Shandong Weiqiao • The State of Guinea
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calls the consortium “a union of some of the strongest companies in their respective sectors”. Said firms are the Chinese Wei Qiao Group (biggest aluminium manufacturer in the world), Singaporean Winning International Group (transporter of 90 percent of Chinese bauxite imports), UMS Guinée SARL (leader in West African logistics) and the State of Guinea, which is a 10 percent shareholder in the project. A year after forming, SMB-WAP’s first barge carried bauxite from
Guinea’s port of Katougma. Before the consortium could achieve this goal, it needed to acquire permits from the government. “We firstly obtained a surveying permit so that we could do reconnaissance ourselves on an area that was not limited to the main mining body area in Guinea, in fact the first mine we explored and exploited had never been fallen into the radar of any other party – when the others sit on the country’s high grade reserves for decades without
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VERMEER TERRAIN LEVELER SURFACE EXCAVATION MACHINES (SEM) DELIVER MORE THAN ROCK-PENETRATING POWER. ®
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Your mining operation is constantly under pressure from increasing regulations, rising costs and environmental obstacles. Vermeer West Africa offers innovative equipment solutions to combat these challenges, and serves the mining market in West Africa. Maximize productivity and product quality to get the most value from your mine, Vermeer has the features you need to get the job done fast and efficiently. SMB Winning is working with the Vermeer T1255 Terrain Leveler SEM in West Africa. At this moment they have 2 Terrain Levelers working in their mines in Guinea-Conakry. Since they started working with Vermeer in October 2016 they know the benefits of working with the Vermeer Terrain Leveler SEM first-hand, starting with their ability to bypass primary crushers. “Most material is less than 200mm and the biggest part even less than 100mm. This enables SMB Winning to
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to load the material directly on barges for ocean transport to the refinery in China”, says Ruben de Meijer, General Manager Vermeer West Africa. Another advantage is the selective mining. With the help of GPS and the patented tilted drum it is possible to follow ore-bodies and select the high-grade ore from the lower grade. “The patented tilted drum makes it also possible to make mining floors on-grade. Especially in the rainy season in Guinea-Conakry which enables SMB Winning to continue their operation”. The Vermeer Terrain Leveler SEM is a very maneuverable and stable 2 track machine with a low center of gravity. SMB Winning has been cutting 21% / 12 degrees, but the machine is able to cut up to 36% / 20 degrees. “The bauxite mines in Guinea-Conakry are hilly, so this is an extremely important benefit. It allows you to mine in all places of the mine without preparation work needed”
Vermeer West Africa will be associate sponsor at the Symposium of Mines Conference from 7-11 May in Conakry, Guinea-Conakry. Come visit our booth T30.
While starting to work with the Vermeer Terrain Leveler SEM SMB Winning had 3 Vermeer people on site to train the operators and technicians about operation and maintenance of the machine for 6 months. After the training SMB Winning continued to operate with 1 supervisor on site (24/7 support). And both machines are operating 24/7 from day 1. By setting up operation this way they are able to react quickly.
downtime in the mining industry can cost a lot of money and it is our job as a partner to support the customer to lower operating costs” says Ruben de Meijer, General Manager Vermeer West Africa. “Vemeer West Africa also offers factory support for in-depth training and advice about mine planning, GPS sysems etc. to get our customers work most efficiently”. The co-operation with SMB Winning has been a great partnership. “They give us the tips and ideas to improve the machine. Every environment has its own particular circumstances and from that we can learn as distributor and manufacturer”. SMB Winning is using the Vermeer Terrain Leveler SEM for mining, but the machine can also be used to construct haul roads etc. as well. With the creation of a smooth surface it can increase the average speed of the trucks and lowers the wear and tear of these trucks. As the speed increases a lower amount of trucks is needed, which can lower the CAPEX. Vermeer also offer a wide range of trenchers and HDD drilling rigs, which can be used for utility installation (electricity, water, telecommunication etc.) and for drainage purposes. In addition, Vermeer also offers land-clearing equipment, like forestry mulchers, grinders and chippers to make your mine ready for operation in an early stage.
Vermeer machines are used to work in the most remote areas where you can’t take anything for granted. Vermeer West Africa is co-operating with SMB Winning to have a good parts availability on site to keep the machine running. “We know that 1 hour
6 • EMAIL : INFO@VERMEERWESTAFRICA.COM • VERMEERWESTAFRICA.COM
orporation. All Rights Reserved.
B O K É M I N I N G C O M PA N Y ( S M B )
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doing anything, we said we ‘boleh’ (Malay word for ‘can do’)” Bouzigues says. “This took almost nine months. Subsequently, we obtained our exploration permit and followed the mining code to the letter, giving the government regular updates.” SMB-WAP’s pooled financial resources (Lau notes that the project’s capital expenditure is $600700 million) and in-house competences enabled it to progress rapidly from this point. The consortium carried out rapid drilling campaigns with its own equipment and staff, and with the help of its on-site laboratories, staff were easily able to determine which areas were prospects. “Once the results were positive, we applied for the The year that SMBmining license since we did WAP was founded not need to waste time for raising construction funds, seeking consultants/contractors, nor securing offtake. This came six months after obtaining the research permit and starting the production phase,” Frédéric Bouzigues says. To enable production, the consortium established two entities in Guinea. Frédéric Bouzigues explains: “We have Boké Mining Company (SMB), which mines bauxite in the Boké region, and Winning Africa Port SA (WAP), which manages all of the river port terminal operations on the Rio Nuñez for the shipping of bauxite.” The bauxite mining industry does not use any
2014
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QUALITY FIRST UMS is first and foremost the most prominent actor of integrated logistics in the region. We supply mining, industrial and fuel companies with services ranging from all kinds of transportation, including customs paperwork, to mining infrastructures, to oil supply.
www.ums-international.com contact@ums-international.com +224.625 49 34 81 | +224.628 05 91 77
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products, processing, drying or burning. Thus, excavation is the sole element in the process. Frédéric Bouzigues adds: “It’s worth remembering that at SMB we are dealing with people whose main task is logistical. We mine (moving ores from underground to the ground) the bauxite, load it in trucks that transport it to the ports, and from ports to boats it is transported by barges.” With a field strength of more than 350 trucks (e.g. HFO tank trucks, fuel tanks and cement tanks), UMS carries out the land transport process. The West African company’s trucks travel via the only road leaving the mine, and transport the bauxite to the port of Katougouma. After they arrive, The Winning Group takes over the process. Winning built the river port of Katougouma with consortium funds. The harbour covers an area of 41 hectares and has four quays for the 17 bauxite boats of 8,000 tons. Winning’s boats ship the bauxite to China to be processed. According to Lau, trans-shipping is a major component of the process. “It is the world’s biggest transhipment system,” he says. “Similar standard operation models can be found in USA, Europe, Middle East, Australia and Indonesia. However, there is no match of scale.” Furthermore, the Winning Group’s 30 odd cape size vessels ensure ocean freight competitiveness and stability of Guinean products going to the far away PRC market. After the bauxite arrives in China, it is finally processed into aluminum by the Wei Qiao Group.
“In all aspects, the process is in compliance of all regulations and CSR. We do this to unlock the country’s mineral and river transportation worth, and for the country to fund the development of other business sectors” BOSCO LAU
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B O K É M I N I N G C O M PA N Y ( S M B )
Bauxite is transformed into alumina development of other business sectors, in a refinery, and then transformed like agriculture, industry and tourism.” into aluminium with a smelter. The journey from bauxite to Custodians aluminium is achieved by “prudent, Frédéric Bouzigues explains that disciplined, quick and timely SMB-WAP is heavily involved with the decisions”. Lau explains: “This is communities at all of its sites (“near possible because of the mutual the river terminals, in extraction trust with the country areas, in the construction of [Guinea] and the people, living and logistics bases”). and the consortium’s The consortium own fund, mainly focuses on competence employment The number of jobs that and SMB-WAP is SMB-WAP has created skilled staff committed to to physically employ in all the construct the project localities in which the without the need of project operates. It has external assistance.” also built a literacy centre SMP-WAP stresses that which enables young people its “fast-track” process does not without training to gain skills, then be come at the expense of corporate hired by the consortium. In association social responsibility. “Fast-track is with the Jiantsu Marine Institute, the not achieved by cost saving,” Lau Winning Group offers courses to train says. “In all aspects, the process is future Guinean tugboat and oceanin compliance of all regulations and going ship sailors: a worldwide market. CSR. We do this to unlock the country’s Lau describes further community mineral and river transportation efforts. “We support the state worth, and for the country to fund the mineral reserves survey and initiated,
1,500
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Konecranes @Konecranes
Konecranes @Konecranes · Apr 4 Live from the West-African coast – Live from Klaipeda – crane outstanding mobile harbor technology on water The electric mobile harbor crane! #FloatingCranes #BulkHandling #LessExhaust#OpenSea #LessNoise
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Winning on the open sea Around the waterways of the globe, our floating cranes offer outstanding Konecranes Gottwald mobile harbor crane technology. Such as this Model 8 crane, operated by Winning Logistics off the coast of West Africa. This four-rope grab crane transships bauxite from river barges to ocean-going vessels. It’s approved by Lloyd’s Register and offers high performance even under harsh conditions.
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sponsored and supported city planning studies by Surbana of Singapore and the Boké special economic zone. The consortium has also arranged for Chinese and Singaporean potential investors to explore investment opportunities in Guinea,” he states. SMB-WAP also uses its logistics system to bring reliable, competitive two ways flows of goods and materials between Guinea and Asia. We ask how SMB-WAP ensures minimal environmental damage. “The environmental impact is minimal because we primarily have an operation which is exclusively excavation without transformation,” Frédéric Bouzigues answers. “No drying, burning or adding chemicals. We are lucky to have bauxite treated as a block, which does not spread much dust in the air.” Moreover, making use of the unique high temperature high pressure high traffic volume operation environment, the consortium innovatively caused the haulage road to basically a dust free corridor. Additionally, SMB-WAP has built programs for the rehabilitation and reorganisation of excavated areas. It will replant crops such as cashew and palm trees. The consortium also recognises that it has an economic responsibility to the people of Guinea. Professional services network PwC monitors the payment of foreign exchange taxes from SMB-WAP to the state and SGS analysis of cargoes. “It is interesting to refer to an important point which was made precisely by PwC on the bauxite market,”
“The project has attracted and worked with stakeholders of international standard from all over the world” BOSCO LAU
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Frédéric Bouzigues says. “SMB’s entry into production has enabled Guinea to double its exports of bauxite from 2016 with about 12 million tonnes of bauxite already exported.” SMB-WAP presents other impressive statistics. As of 2017, the consortium will increase its production, by adding one more port (the port of Dapillon) and another set of marine logistics equipment, making it the first bauxite company in the Guinea to export 30 million tons. Bouzigues expects this total to rise to 35 million
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from 2018 to 2022. In 2016 alone, SMB contributed US $30 million in mining and export taxes. None of these achievements would have been possible without SMB-WAP’s partners. “The project has attracted and worked with stakeholders of international standard from all over the world,” Lau comments. The consortium is supported by the expertise and resources of its partners, which are all leaders in their respective sectors. These partners include Vermeer (USA),
MINING
Sinotrucks (China), Terex (Germany) and Bureau Veritas (France). Despite substantial support from partners, SMB-WAP must retain some credit for itself. The consortium has defied borders in order to create an international team of mining experts, while priding itself on giving back. The consortium recognises the potential of Guinea and its people, thus it empowers communities and boosts the countries overall bauxite exports. SMB-WAP plans to continue on the economically responsible trajectory.
“We have two river terminals, each with a processing capacity of about 25 million tons of bauxite. So, if we have enough reserves, our consortium will be able to reach a production of 50 million tons. Combined with taxes this would have a considerable impact on the country’s economy and its development,” Frédéric Bouzigues concludes. With this success and the consortium’s logistics strength, SMB-WAP has decided to kick off an intensive feasibility study of building a refinery in Guinea. Beyond bauxite, the established infrastructure can and will be used for import of capital goods and CKDs (for the assembling industry to be developed), and the development of a regional hub in Boke for the West Africa region. For instance, fertilizers and pesticides can be imported cheaply and reliably to support a cashew nut project in the pipeline.
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SPEARHEADING AUSTRALIA’S GOLD MINING RESURGENCE Dacian Gold is months away from becoming the next midtier gold producer, and its properties on the established Mt Morgans field could easily take it to world class Written by John O’Hanlon Produced by Josef Smith
DACIAN GOLD
M
ount Morgans near Laverton in Western Australia has been a renowned centre for gold production since ore was first discovered there in 1896. Named after Alfred Edward Morgans, a Welsh investor who first developed the productive open pit Westralia mine, it had produced a million ounces of gold by 2011, by which time it was pretty much mined out, and in April that year the company that owned it threw in the
towel. By happy coincidence it was in the same year that Avoca Resources merged with Anatolia to form Alacer Gold, which now focuses its attention on the goldfields of Turkey. Avoca was a successful enterprise that started as a junior exploration company and grew via an IPO to become a leading gold producer on the ASX.
Following the merger and an 11-year journey Avoca’s CEO Rohan Williams says he felt ready for some time out, but that was
Rohan Williams Executive Chairman
Mr Williams is the founding director of Dacian Gold Ltd overseeing the $8M acquisition of the Mt Morgans Gold Project prior to the Company’s $20M exploration IPO in late 2012. He initially served as the Company’s Non-Executive Chairman, but became its Executive Chairman in early 2014. Since this time the Company has grown to a $400M market capitalisation and is presently focussed on the construction of the 200Kozpa Mt Morgans Gold Project ahead of initial gold production in March 2018. Prior to Dacian Gold, Mr Williams was the founding CEO and Managing Director of Avoca Resources Ltd, and led that company from its $7 million exploration IPO in 2002 until its merger with Anatolia Minerals in 2011 to form Alacer Gold Corp, which valued Avoca at $1 billion. At the time of the merger, Avoca Resources Ltd was the third largest ASX listed Australian gold producer. Mr Williams also serves on the Board of the Telethon Kids Institute.
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not to be – Mount Morgans came to his notice and enticed him to pursue a growing conviction that the project had potential. He raised $10 million (Australian) privately to buy the project outright from its administrators in January 2012. In November of the same year Dacian Gold listed on the ASX following an IPO that raised $20 million. “With that behind us we had three years to do a thorough exploration: if our theory was right we hoped to be able to build a mine,” says Williams. The success of Avoca, and the fact that much of the same team was involved at Dacian, helped sway the investors, he admits, and since the IPO the project has proceeded very much as well as he and his backers could possibly hope. In just two locations, below the old Westralia open pit and at a surface deposit just 10 miles away named Jupiter, the drill-out confirmed an ore base of 1.2 million ounces of gold at an average recovery cost of around A$1,000 per ounce. With Australian gold prices currently firming at close to $1,700 per ounce the mine,
which has been confirmed to have at least an eight-year lifespan, will break even well within two years. In the event Williams is very much more optimistic, and is holding himself in check when he claims to being well on the way to becoming a 200,000-ounce per year gold producer over a 10-year period, making Dacian Gold a significant new mid-tier Australian gold producer. “We did a feasibility study and that showed it was going to be an economic proposition and then it
WITH OUR $20 MILLION IPO BEHIND US WE HAD THREE YEARS TO DO A THOROUGH EXPLORATION: IF OUR THEORY WAS RIGHT WE HOPED TO BE ABLE TO BUILD A MINE w w w. d a c i a n g o l d . c o m . a u
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was a matter of raising finance and construction and in March next year we will have our first gold bars.� Striking gold
This first gold will come from the brand new 2.5 million tonne per annum carbon-in-leach (CIL) processing plant being built under an EPC contract by GR Engineering, which will also be responsible for building supporting infrastructure including a tailings storage facility; raw water supply infrastructure; workshops, offices and infrastructure to support the Jupiter open pit; an administration complex; and a new haul road. The processing plant is located
close to the Jupiter pit, where, later this year, run-of-mine ore will be trucked from the new underground mining complex being built by RUC Mining. The underground mining contract includes development of a new portal for Beresford, rehabilitation of the historic underground portal and Allanson decline; and level development, ore driving, and stope production. These are partners that Williams and his team know well, having worked with them at Avoca. Two separate mines are to be built to extract ore from the two main deposits at Westralia – Beresford and Allanson – with construction at the Beresford mine started in
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mid-May. “Our plan is to place around half a million tonnes of ore on the ROM pad so that when the processing plant is turned on in March 2018 it can go straight into full production. He adds that the processing plant will have a design life of at least 20 years, reflecting his confidence on the as yet unconfirmed future potential of the 520 square kilometre Mt Morgans project. Rohan Williams is a man who likes to back his gut instincts as a geologist with firm evidence. When he first looked at the site, the paucity of diamond drill cores at site once shocked him and gladdened his heart. “It was a great indicator to me
of how under-explored this project was. Westralia is a field that had produced over a million ounces of gold yet there was almost no diamond drilling completed at depth – without that the geologists could not really understand what controls the ore bodies.” Already Dacian has increased 20-fold the amount of hard evidence in terms of drill cores, he continues: “Exploration is one of the things we do well. We put effort, dollars and geological science into understanding the mineralisation as well as humanly possible. Diamond drilling is the only way to do that.” With that in mind the company raised an additional $20 million in its last raising for its continuing
WESTRALIA IS A FIELD THAT HAD PRODUCED
OVER A MILLION OUNCES OF GOLD YET THERE WAS ALMOST NO DIAMOND DRILLING
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DACIAN GOLD
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exploration programme, he says. Many companies with a clear path to profitable production might be tempted to focus exclusively on construction, but not Dacian, which wants to still be bringing in new resources 20 years from now.
near-surface gold. Once all these results have been interpreted he intends to bring in the diamond drilling and reverse circulation (RC) rigs to confirm what he believes may well become a third major resource for the company. You only have to look at the area Expansion? that embraces Mt Morgans to feel It’s already been established that the buzz. Just outside lies the world Westralia is a large mineralised class Wallaby gold mine and within system extending over three a 25 kilometre radius there are many kilometres, and that the Jupiter other names to conjure with such deposit is also a big open pit at as the Sunrise Dam and Granny nearly two kilometres long. With Smith gold mines. “I can’t think of all systems go on developing another gold system in Australia these areas Williams is intent where there are that many twoon investigating a third potential million plus gold deposits. We are system on the property known as definitely in elephant country and Cameron Well, just nine kilometres it excites us.” That combination from the treatment plant. A 750-hole of enthusiasm, experience and reconnaissance drilling programme scientific rigour is what makes has just been completed using a Dacian a leading light in the combination of air-core and RAB resurgence of Australia’s gold mining (rotary air blast) drilling, showing industry after a period of recession. up encouraging quantities of
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