Mining Global - December 2016

December 2016 • www.miningglobal.com

SPECIAL REPORT Euromax Resources

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Model mining code & the future of mining policy BEST EXAMPLES of community engagement

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Anglo American & World Aids Day 2016

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EDITOR’S COMMENT

W E L C O M E T O T H E D E C E M B E R issue of

Mining Global! In this month’s issue, we take a look at the introduction of the Model Mining Code from the World Initiative of Mining Lawyers and the impact it will have on policy makers, governments and NGO’s across the global industry.

We also look at the importance of Governance Risk and Compliance (GRC) and how Exarro managed to save over $800k through the implementation of SAP solutions and a complete restructure of the company’s approach to GRC. How important is Corporate Social Responsibility and community engagement to a mining organisation? We try to answer that question with 10 of our most notable examples of CSR, from building school infrastructures in the DRC to award winning biodiversity research in the UK. With World Aids Day upon us, Anglo American takes Mining Global through the company’s work towards supporting HIV/Aids sufferers and how big a role mining companies can play in better serving employees across the industry.

Mining Global magazine – let us know your feedback @MiningGlobal

Enjoy the issue!

Dale Benton Editor dale.benton@bizclikmedia.com 3

CONTENTS

F E AT U R E S

PROFILE

06

What does the introduction of the Model Mining Code mean for the industry?

TECHNOLOGY

EXPO

22

Roll up roll up: Global industry leaders line up for the MINExpo International 2016

14 4

LIST

Pulling in the same direction

December 2016

The importance of CSR 10 best examples of community engagement

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C O M PA N Y PROFILES

64 78 MADISA’s

America Latina

Brazilian Nickel

Europe

54

Euromax Resources

42

Candelaria America Latina

Europe

5

PROFILE

What does the introduction of the Model Mining Code mean for the industry?

Writ ten by: DALE BE NTON

This year, the World Initiative of Mining Lawyers launched it’s ‘Model Mining Code’ at the 2nd Annual WIOML conference in Paris.

Mining Global speaks to Al Gourley, Chairman and Director of WIOML about how the Model Mining Code can change the industry IT’S JUNE 2016 at the Chateau de Montvillargenne, France.

Representatives from the World Initiative of Mining Lawyers (WIOML) have gathered for the second WIOML conference and annual meeting, designed to review changes around the world in the area of mining regulation and policy.

By the time the conference is over, it could stand as a significant date in the history of mining as the WIOML launches the Model Mining Code, a model to influence and guide mining countries in attracting and securing fair benefits from mineral exploitation within their borders.

WIOML is an organisation dedicated to resource policy review, to advance knowledge of mineral regulation worldwide through global participation of leading professionals, academics and

policy makers to foster an informed understanding of legal issues related to mineral exploration and mining.

Naturally, such a wide range of voices from different governments and environments presents a challenge of establishing one singular cohesive vision.

“The biggest challenge is trying to find harmony and agreement as to what is a sensible policy and what isn’t,” says Al Gourley, Chairman and Director of WIOML. “One has to be very open with the various voices of disagreement and perspectives as you try and put together a common position.”

This is where the WIOML conference comes in, to encourage debate and discussion and bring about a clear collective means for change. Established in 2014, WIOML 2016 marks only the second annual 7

PROFILE conference, but for Gourley the conference and the model mining code launch itself represents a significant success for the organisation so early into its mission.

“The quality of those people attending both last year and this year’s conference is extremely encouraging. We are looking at world leaders in resource law who are attending and engaging with the code, the conference program and the initiative in general,” says Gourley.

The Model Mining Code, Gourley believes, is the epitome of the challenges the initiative faces when trying to articulate a position that’s free as possible from critique when considering what is a sensible policy and what isn’t.

One method of doing this is by encouraging debate, reflection and in some cases, even critique of existing mineral policies around the world.

“This presents us with an opportunity to have some influence ultimately on the choices people are making within the industry,” says Gourely.

This is not WIOML looking to control and govern the industry, rather to open a dialogue which allows 8

December 2016

policy makers to ask themselves what makes a good policy that is healthy for the industry. Gourley has seen over the last 15 years that most mining codes that are adopted across the industry, particularly in Africa, have come more from a negative angle than a positive one.

“This is something that cannot continue, otherwise we won’t have an industry anymore,” says Gourley.

For WIOML it is not about doing

THE MODEL MINING CODE

“We want to influence those choices, create an open debate about the reason why people are making policy choices that are averse to the industry” – A l Gourley, Partner Fasken Martineau; Chairman and Director of WIOML

what the initiative thinks is best, rather taking stock of both good and bad examples of mineral policy across the world and creating something of a “best practice” that can be adopted universally.

“We want to influence those choices, create an open debate about the reason why people are making policy choices that are averse to the industry. Whether it is favouring communities or the environment or 9

PROFILE

government without the appropriate tools to the finely chisel what it is they are trying to achieve, for example, discretion in legislation,” he said.

For an initiative like WIOML to work it takes more than just a successful conference, it takes having the right people involved who can drive the initiative forward and ultimately create a more transparent and successful industry of mineral policy makers.

WIOML has worked with organisations such as global law firm Norton Rose Fulbright and Simmons & Simmons to drive the content of the WIOML programme and reach 10

December 2016

out to people who can speak to the issues involved in policy making.

Through close working with world leaders in resource law, Gourley believes there is strong credibility to what WIOML is trying to achieve.

At the 2016 WIOML conference, a representative from the World Bank was invited as a key note speaker which “speaks volumes” as to who WIOML wants to engage with.

“We want to engage with those making mineral policy. The entire program is policy driven and we are looking to engage with NGO’s, communities and community

THE MODEL MINING CODE

leaders and ministers considering revising policies,” says Gourley.

A further example of the way in which WIOML engages with the right people is through an agreement established with the University of Dundee in which it will send its masters students to WIOML as means of creating a deeper connection with the academic community.

The Model Mining Code is not the first mining code established across the industry, nor will it be the only iteration from WIOML. “It’s the first iteration and we have no intention of letting

it stagnate,” says Gourley There are examples of mining codes adopted across the industry that look very similar to the model mining code and WIOML will continue to look at what is successful in the policy codes of Australia, Canada, the US etc. and incorporate those key elements into the model mining code in a way that is easily adoptable across different jurisdictions.

“It is designed to say: these are key principles and key reasons as to why these principles are important.

This looks at fairness in licence and license allocation for example, so it’s 11

PROFILE not discretionary – its transparent who gets the licence,” says Gourley.

In creating a model mining code, WIOML also took into consideration the financial demands of the mining industry. Gourley says that WIOML is approaching the model mining code “unabashedly” from the miner’s perspective.

“It’s about advocating for investors who want to see certain things in a mining regime before making investment, or at the very least present the investors

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“We’d like to see the industry develop to a point where mining companies, NGOS and governments are all actively participating and engaged in policy discussion” – A l Gourley

THE MODEL MINING CODE

perspective for what would be an ideal model for purposes of encouraging investment,” he says.

Looking to the future, WIOML is already working towards next year’s conference, which will be held in Madrid. The location choice for the conference, the first in London and this year’s conference in Paris is a very intentional choice.

Once again, it boils down to reaching out to the right people in the best possible way.

“We had it in London first time

around as it is where we are based but also its an international city.

It’s about trying to reach out and being relevant in multiple languages while reaching out to the largest audience – the world,” he says.

WIOML chose France to reach out the French speaking countries such as the Côte d’Ivoire and the 2017 WIOML conference will be held in Madrid, to reach out to the Central and Southern Americas.

Where does WIOML want to see future of the mining industry?

“We’d like to see the industry develop to a point where mining companies, NGO’s and governments are all actively participating and engaged in policy discussion,” says Gourley.

“That’s our real goal. So far we’ve made some inroads in the mining industry and we need to make further inroads with those NGO’s and policy makers. The conference is ultimately a way of simply measuring our success.”

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TECHNOLOGY

Pulling in the same direction Writ ten by: DALE BE NTON

Exxarro Resources, one of the largest diversified resource companies in South Africa, recently recorded approximately $800 thousand in savings in less than a year, all through restructuring its GRC processes with SAP Solutions. We speak with the Manager or Risk and Compliance at Exxaro to find out how 15

TECHNOLOGY HOW IMPORTANT CAN governance, risk and compliance (GRC) be to a mining company?

If handled with an open mind and leaning towards innovation, important enough to save around $800 thousand in less than 12 months.

That has certainly been the case for Exxaro, one of the largest black-owned, South African based diversified resources company.

The company predominantly mines through a number of operations in the Mhlanga province of South Africa.

In 2010, following a major restructuring, the company began to look at and reassess its GRC processes. For Saret Van Loggerenberg, Manager, Risk and Compliance at Exxaro, this was more about shifting the way in which mining companies including Exxaro conducted those GRC processes.

“Up until the restructure, what bothered me the most was that people seemed to treat governance and corporate compliance as something of a box ticking exercise,” she says.

Loggerenberg believes that for many mining organisations, GRC was completed for the sake of simple GRC. Through the 16

December 2016

implementation of SAP Process control, Loggerenberg and Exxaro has been able to prove a demonstrable increase in value to shareholders through a more streamlined and open minded approach to GRC This mindset and approach was born out of a time in the industry where each and every department and business unit within a mining company was fighting for survival and proving that each departmental business process would be of value to and enhance the company.

“My focus was to turn governance risk and compliance upside down,” says Loggerenberg.

“To really prove to people that the only reason you should be doing this [GRC] is because it creates business value and a more resilient company that is more sustainable and adds money to the bottom line.”

At the start of this process back in 2010 Loggerenberg discovered that Exxaro, as with almost all mining companies, contained separate risk management processes in separate functional areas. For example, people in the safety department ran their own processes, the operational teams ran their own processes.

PULLING IN THE SAME DIRECTION

“Even strategic processes ran at a strategic level and all of these separate risk management processes never really spoke to the overall strategy of the company,” she says.

Part of this process of turning GRC “upside down” involved the implementation of some SAP Governance, Risk and Compliance (SAP GRC) solutions, namely SAP Risk Management and SAP Process control. both of which significantly contributed to that $800 thousand in savings.

“Using technology applications such as SAP helps us immensely throughout this journey and really creates a transparent interactive dashboard,” says Loggerenberg.

This dashboard presents an overall sense of visibility across the whole business and allows the company to better determine whether it is on track to meeting strategic objectives, whether those objectives are still relevant and keep track of the company’s sustainability KPI’s and

“To really prove to people that the only reason you should be doing this [GRC] is because it creates business value and a more resilient company that is more sustainable and adds money to the bottom line”

17

TECHNOLOGY

whether it is meeting its important compliance requirements. All of this, available on one screen.

“It creates true exceptional reporting that cuts through complexity and provides the exact information and numbers that in some cases can be debated. Through SAP’s governance tools, Exxaro moves to solution mode a lot quicker than before,” she says.

The most robust decisions can only be made when there is the necessary information is at hand. Technology such as the SAP dashboard solution allows information on risk management and the complete integration of strategy risk and performance management 18

December 2016

to be available at people’s fingertips.

In examining the way in which the company is meeting it’s GRC requirements, it forced Loggerenberg to ask if there was more to risk management than simply complying?

As a company, Exxaro’s risk management processes are in place to ensure that the company remains sustainable and be more innovative.

To do this, it was soon apparent that like any company, restructure and transformation puts a spotlight on silos and a siloed way of thinking.

“Everyone follows their own process underpinned by their own risk language, which means people

PULLING IN THE SAME DIRECTION

aren’t speaking a common risk language,” says Loggerenberg.

Loggerenberg set out to create transparency, through SAP solutions, by breaking down these silos on the strategic, tactical and operational layer. The aim of which was to create a situation where everyone from every level within the organisation was following the same risk management process.

“By doing so we teach people that proactive thinking is so important, regardless of your standing in the business.” She says.

In creating this collaborative and more integrated level of thinking,

Loggerenberg was able to break down barriers and to allow the company to better understand why it does risk management in the first place while promoting the responsibility of the people to be proactive.

Despite the notable focus on GRC, the restructure process is not restricted simply to the way in which the company approaches its GRC. For Loggerenberg, the overall process is about establishing integration across the whole business to better harness the potential synergies that can be utilised through that integration.

“It’s about ensuring that you as a business are not spending 19

TECHNOLOGY

“Nothing focuses the mind like the sight of the gallows. This process has opened the minds of stakeholders and strategic level right through to operational and even audit level on the need for better integration to better work to the organisation’s overall goals” the same amount of dedication towards a compliance legislation where the penalty is $500 as you would to legislation around licence to operate,” she says.

Loggerenberg, through the SAP solutions, set out to establish this integration to ensure that it speaks to the overall company strategies and not simply GRC. To not only 20

December 2016

break down those silos and that siloed way of thinking, but to break down the siloed approach overall.

The process began in 2010 and as we reach the end of 2016, Loggerenberg admits that the company hasn’t reached the end point yet. For any company, a process of change management is not a process that can happen overnight. A crucial

PULLING IN THE SAME DIRECTION

element of this entire process has been getting people to believe in this journey and with so many different functionalities and areas of expertise, it does not come without its challenges.

The strategic level, the operational level, the GRC level, all need to be pulling in the same direction.

Loggerenberg admits that it is “extremely difficult for people to relinquish their own siloed thinking in pursuit of something bigger.”

But after five years, and strong figures that represent the business heading into a new but ultimately innovative and right direction, Loggerenberg believes the results speak for themselves.

“I think we created something that people now view as an integral part of the business and not simply beside the business,” Part of this success can be attributed to the pace of change.

Flexibility in company strategy is key to the success of the business as that change is unpredictable, forcing a need to be more open minded and willing to change that strategy.

“Nothing focuses the mind like the sight of the gallows. This process, and not only through GRC, has opened the

Saret Van Loggerenberg, Manager, Risk and Compliance at Exxaro

minds of stakeholders and strategic level right through to operational and even audit level on the need for better integration to better work to the organisation’s overall goals,” she says.

“It has created a whole new perspective.” She concludes.

Success has come in cost savings. $800 thousand saved in just under 12 months through the adoption of SAP solutions. 20 percent of those savings have been achieved through more effective risk management and integration.

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TOP 10

The importance of CSR 10 best examples of community engagement

Mining Global looks across the industry at 10 examples of CSR and the important part it plays in the success of an operation as well as the success and livelihood of the industry.

Writ ten by: DALE BE NTON 23

TOP 10 HOW IMPORTANT IS corporate social responsibility (CSR) in the mining world? Ask any successful mining operation or leading mining company and the answer will most definitely be a resounding yes – very important.

The mining industry, unfortunately, often falls victim to a widespread belief that it is nothing more than a detriment to economies, communities and the environment. This is despite all of the demonstrable benefits to the modern world – like the natural resources that form the make-up of the very technologies

we depend on - to many, the mining industry brings nothing more but pollution, disruption and death.

From the smallest scale operation to the largest mining powerhouses, CSR and the impact on the environment, economy and community in which a company chooses to operate within is not taken for granted.

1V EDANTA RESOURCES “The very core nature of Vedanta Resources, one the world’s leading natural resource companies, is to demonstrate “world-class standards of governance, safety, sustainability and social responsibility,” Says Roma Balwani, President, Group Communications & Sustainable Development.

Vedanta commits to its very own philosophy of “Social License to Operate” which places community engagement as the “core pillar” to continuously work towards improving the quality of life of the communities in its operational areas.

In Odisha, where Vedanta has its aluminium smelters and power plants, the company has initiated a host

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T H E I M P O R TA N C E O F C S R

of deep impact CSR activities. The resettlement colony at Jharsuguda, which houses the displaced families, is a model structure with health and sanitation facilities, school, street lights, adequate water supply, sports facilities, community halls and many other such amenities.

and focus on educational, health and infrastructure improvements that will have the “greatest impact on the quality of life.”

2 PHOENIX MINING CONSULTANTS One of the world’s leading mining consultants, with a key focus on mining operations in the Russian Federation, Turkey, Macedonia and the United Kingdom, PMC strives to create a healthier and sustainable industry.

The company worked with a mining greenfield gold project in the east of the DR Congo, Twangiza, partly funded by the IFC. Through the established Banro Foundation, the project aims to employ local labour and trades people “wherever possible”, “commit to responsible environmental stewardship” including protection of local species of animals, 25

TOP 10

3 ALPHAMIN RESOURCES Through the Bisie Tin Project, which we profiled last month, Alphamin Resources plans to redefine North Kivu as the world’s premier conflict free tin deposit, with a significant focus on building a lasting legacy for the local community.

Boris Kamstra, CEO at Alphamin Resources, believes in “reverse engineering”.

“If your workforce requires a uniform, then as a company you 26

December 2016

can source this locally, bring in the material and create sewing groups. That right there is work for the community brought upon by you as a company,” he said.

The company also commits to the Dodd-Frank regulations, which ensures that Alphamin tin will only be able to be sold through legitimate channels.

Through this commitment, should any of Alphamin’s tin be seized, Alphamin can “effectively economically sterilise it [conflict tin] from the world at large,” says Kamstra.

T H E I M P O R TA N C E O F C S R

4 MOTT MACDONALD Mott Macdonald is a global engineering, management and development consultancy focused on guiding clients through intricate challenges, for mining clients that involves CSR. The company provides support and works closely with major CSR focused organisations, including Engineers for Overseas Development (EFOD), Engineers Without Borders, Health, Education & Development Association) RedR and Water Aid.

The company has provided consultancy services to the mining sector, specifically focusing on social development outcomes, with a project undertaken on behalf of the National AIDS Council in Zambia. “We developed the strategy, tools and guidance for a programme to raise HIV awareness and provide advice on prevention. A cost-benefit analysis undertaken afterwards showed that eight mining companies saved money by introducing the scheme,� said a Mott Macdonald spokesperson.

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TOP 10

5 CRANFIELD UNIVERSITY The mining, metals and quarrying industry represents an essential part of the UK’s industrial and economic landscape. The Cranfield University has worked specifically with the removal and storage of large volumes of top soil that happens during quarrying, and how to successfully return after quarrying ceases.

One student has focused her efforts on how to improve this management and advise on the best route back to The Quarry Life Award, an international research competition for the promotion and education about biodiversity in quarries

productivity or “return to nature.”

She conducted her awardwinning research at Ketton Quarry, were “great work is being done to protect the biodiversity and quality of the removed top soil” says Dr Mark Pawlett.

“A quarry that engages with its surroundings, considers its impacts, and works to minimise (and even improve) the quality of the land it occupies will be a quarry that thrives and is supported by the local community and all its inhabitants, human and otherwise” he said.

T H E I M P O R TA N C E O F C S R

6 RIO TINTO GROUP The mining giant has a strong history of effective and demonstrable corporate community engagement, proving that no matter how big or small – CSR is very much a crucial element across the industry.

“Our commitment to sustainable development is central to our ambition. We focus on making a positive difference in areas such as stewardship of natural resources, climate change and local employment,” says the company in its sustainability report.

According to the Minerals Council of Australia, more than 60 per cent of Australia’s mining operations neighbour Indigenous communities, however Indigenous employees make up on average only six per cent of the country’s mining workforce.

Rio Tinto owns and operates the Weipa bauxite mine in which 24 percent of employees are Indigenous, and 13 percent are local Aboriginal people.

The Weipa’s Kinection programme from Rio Tinto is an innovative pre-employment training course designed to equip local Aboriginal people with the skills needed to work in the mining sector.

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TOP 10

7 OZ MINERALS Oz Minerals, a copper-focused international company based in South Australia “strives for continuous improvement” in delivering maximum long-term benefit for its host communities.

In 2015, the company spent around $336,163 on community investment.

It is a member of the Coober Pedy Industry Alliance, a representative group of local mining companies and the local council, allowing a collaborative strategic approach 30

December 2016

to supporting the local community in a sustainable way through common goals and objectives.

OZ Minerals contributes to local and regional programs including; sponsorships of the Coober Pedy Area School year 11 and 12 graduates, the Great Breakaways Marathon. It also supports the Royal Flying Doctors Service, the Remote and Isolated Children’s Exercise, and the Copper Sculpture Award and copper workshop as part of the South Australian Living Artists Festival.

T H E I M P O R TA N C E O F C S R

8 ANGLO AMERICAN In a time of increased market volatility, Anglo American remains focused on the role of community engagement.

During the development of the Gahcho KuÊ diamond mine, De Beers Canada recognised the need to communicate and engage effectively with host Aboriginal communities to address the mine’s activities and impacts. In 2014, the company

negotiated directly with Aboriginal parties to establish a forum called Ni Hadi Xa, a Chipewyan name meaning For Watching the Land, which enables all affected parties to participate in environmental stewardship activities at the mine.

Ni Hadi Xa provides an additional layer of oversight, over and above the regulatory instruments that govern mining operations, and forms part of a broader engagement with Aboriginal communities.

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TOP 10

9 BHP BILLITON In the FY 2016, BHP Billiton made an economic contribution of around $2.67 billion, so it goes without saying that the company truly values CSR and community engagement.

In October 2015, BHP Billiton Trinidad and Tobago, in partnership with Conservation International (CI) and the Caribbean Natural Resources Institute (CANARI), launched the Action by Civil society in Trinidad and Tobago to build resilience to climate

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change (Climate ACTT) program.

The goal of the project? To empower a selection of civil society organisations with rigorous and transparent institutional processes and up-to-date technical best practices for climate change adaptation and resilience planning.

The project concludes in December 2016, but will leave a civil society toolkit for climate change adaptation, including best practices and case studies and a capacity building materials for the future.

T H E I M P O R TA N C E O F C S R

10 GLENCORE In 2014, Glencore looked at re-evaluating its socio-economic contributions. The company strives to minimse dependency in its operations from the local community by promoting sustainable communities with diversified and resilient local economies.

In 2015, Glencore had close to 80 percent of local residents in its workforce, with 63

percent of its managers being local residents as well.

The company spent just over $15.1 billion on local suppliers, significantly promoting local trade and growing the local economy.

It doesn’t stop there, Glencore has spent over $134 million on shared public-use infrastructure, with most significant investments in power distribution ($68.5 million), roads ($56 million), and water treatment and distribution ($5.6 million).

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SPECIAL REPORT

HIV/AIDS in the mining industry: what are we doing about it?

Wr it te n by: S t e f a a n Va n d e r B o r g h t , G l o b a l H e a d of H e a l t h , A n g l o A m e r i c a n Edite d by: D a l e B e n to n

December 1 is World Aids Day, a significant day all around the world. But how much of a role does the mining industry play in helping those affected by HIV? We spoke with mining giant Anglo American to look at the work it does to provide and encourage testing and treatment for mine workers 34

December 2016

MORE THAN 40 million people worldwide are infected with HIV, and it is estimated that 26 million of these are workers aged 15-49 – the prime of their employable years. As such, the impetus is on workplaces in affected countries to action wellbeing programmes for their people.

Apart from the obvious – and absolutely paramount – moral and human incentive of encouraging testing and providing treatment, the benefits of workplace testing can have a ripple effect: bettering not only the lives of those infected, but their families, co-workers and the population at large. The strength of a prevention programme is important to prevent new cases from occurring.

Research has shown that continuous gender inequality and poor knowledge on sexual and reproductive health, certainly among adolescents, feeds the spread of the virus.

All parties – from employers to co-workers – benefit when infected

parties are detected as early as possible and provided with the correct treatment to allow them to survive. It is now well established that a correctly treated person living with HIV has a much lesser chance of transmitting the infection to his or her partner.

But there is a psychological dimension here, too. Effective treatment programmes are necessary not only to protect those affected, but also to maintain morale among staff members. At the end of the 20th century, colleagues would become ill and eventually die due to the uncontrolled infection. The perceived lack of control, emotional strain, and negative external signalling is demoralising and can inculcate learned helplessness in our teams. Even if HIV is not directly affecting our own health, it is having a huge impact on our daily lives.

This is why employees and their managers have such a crucial role to play, as advocates to encourage testing and treatment among their peers. It does appear that fear of stigmatisation is still strong and stopping people from getting an HIV test. Stigma might even exist in a company that has pledged and 35

SPECIAL REPORT maintained over more than 20 years the promise not to discriminate.

Regional Significance in South Africa For HIV infection, Southern Africa is still the most severely affected part of the world. This has particular resonance in the mining industry, which is a strong private sector player in the region, and particularly for Anglo American, whose historical roots in the continent continue to this day. We are operating in the midst of a society that is still suffering from HIV and where new cases are still occurring. Fortunately, fewer people are dying from HIV than before, and more and more people have access to treatment. At the same time, the number of new cases continues unabated. This, frankly, is unacceptable, when we are more than 30 years into the epidemic.

This only reinforces why, for miners, this cause should be one of our paramount causes. If we hone in on HIV/AIDS treatment and prevention, we will benefit the industry as well as have, perhaps, the greatest possible impact on regional health. We should bring the 36

December 2016

new infections down, assure that people start treatment immediately and continue the treatment for the rest of their lives. But the first step is getting tested. If we can demonstrate that this is possible, it will encourage others to take bold steps to reach the same goals.

In the early 1990s, the HIV prevalence in the mining industry in South Africa was around 1 percent but by 2000, this number had

H I V / A I D S I N T H E M I N I N G I N D U S T RY

snowballed to 25 percent. Immediate action was necessary, and we were swift to set up workplace testing within Anglo American, offering free treatment to all employees in 2002. Taking into account this ripple effect, we soon extended the programme to include dependents of those infected employees.

We now run the world’s largest private sector testing programme for HIV/AIDS and TB, as both diseases

are closely linked. After so many years of encouraging voluntary testing, we might possibly see the first signs of “testing fatigue”: less interest of management and employees to sustain testing efforts. The success of drugs to suppress the disease might have led to complacency and the perception that we are in control.

This complacency is dangerous and we again see workers that 37

SPECIAL REPORT

come very late for testing, and we still have too many colleagues dying from the disease. The good news is that the number of our employees enrolled in HIV disease-management programmes increased 10 percent from 2014 to 2015. Now, 88 percent of our HIV-positive workforce is enrolled.

If we now follow the expert advice to start treatment early, we hope to increase this number even further.

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The Generation to End It As we approach World AIDS Day, we reflect on the lesson we have learnt while working towards an AIDS-free world, and think ahead to the lessons and questions still to be answered to achieve our aim. Business will have a huge role to play in this, and as leaders in the private sector, employee workplace programmes need to engage and commit to ending

H I V / A I D S I N T H E M I N I N G I N D U S T RY

to working with governments, civil society, and fellow business leaders to make this happen.

AIDS in line with the UN goals.

But as long as we have a single worker newly infected with HIV, we are not yet there. This is not to diminish the strides made in the 21st century so far. Rather, it is to ask another, more aspirational question: could we be living in a society free of AIDS as a major public health problem 15 years from now? We think it is possible, and look forward

Case Study: The Batho Pele mobile clinics and the UGM Hospital in Kuruman When faced with a 130 kilometre journey along a dirt road to get to the nearest hospital, a mobile clinic can become a vital lifeline for an infected patient.

This is the reality of the Gasese rural village in the Northern Cape of South Africa, a beneficiary of Anglo American’s Batho Pele project. Launched in 2011, the programme uses mobile clinics to move throughout the Northern Cape and deliver primary healthcare services and HIV treatment.

The innovative project has assisted more than 68,500 patients since 2011 — a substantial number of these being HIV and AIDS-related services.

The Northern Cape is an important region for Anglo American’s Kumba Iron Ore division in South Africa.

The town Kathu is home to Sishen Mine, the company’s biggest iron ore operation and one of the largest open-pit mines in the world. However, 39

SPECIAL REPORT

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with one of the highest HIV infection rates in the country, the province was in dire need of treatment programmes, so in 2007 Anglo American launched the Ulysses Gogi Modise Wellness Clinic (UGM), a sponsored ARV clinic, at a cost of R17-million (nearly ÂŁ1 million).

The clinic tested 14,000 patients for HIV in 2013, with 435 testing positive.

It also ran counselling and training for 29,000 patients and provided ARVs to 1,536 patients. Out of this clinic came the initiative to launch the Batho Pele mobile clinics in 2011. Then, in 2014, UGM began an initiative at all the schools in the Gamagara Municipality to educate young South Africans about health issues. A total of 6,500 school children attend these on an annual basis.

Our goal is to help communities become empowered and economically active in a way that makes a lasting difference long after the mining operations are complete. In 2014 alone, Kumba spent R22.2 million (ÂŁ1.6 million) on numerous community healthcare projects, benefiting about 360,000 people in the communities around our Sishen and Kolomela mines.

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Brazilian

brilliance Written by Dale Benton Produced by Jack Pascall

Brazilian Nickel Ltd

BRAZILIAN NICKEL

The Piaui Nickel Project in Brazil looks to change the nickel industry: Brazilian Nickel talks about revolutionising the nickel industry by building a strong legacy in Piaui

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he relationship between a mining company and the local community or economy in which it operates is not something that should be taken for granted. For a company like Brazilian Nickel, enhancing, protecting and developing a sustainable future for the local community in Piauí is one of the most important aims of the business, second only to shaping the future of the nickel industry.

Brazilian Nickel formed in 2013 and began to develop the flagship Piauí Nickel Project, in the North Eastern Piauí state of Brazil. Over the last three years the company has fully integrated itself into the surrounding community, providing jobs, training and opportunities.

“We want to be a local company, a

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Brazilian company,” says Mike Oxley, Managing Director of Brazilian Nickel.

“We’ve made a real effort to try and balance employment from different towns and villages in our area so that we don’t just concentrate on one or another to truly maximise the benefit of a local network,” he says.

For a UK company, heading into a foreign state can prove difficult for many reasons, not least that it can be met with detractors and dismissed as merely another ‘foreign company’ disrupting the local environment.

This is crucial to the success of the company and achieving the vision for the future.

“This is the poorest state in Brazil and so we want to bring opportunities and jobs and wealth to this part of the country,” says Anne Oxley, Brazilian

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Outotec provides leading technologies and services for the sustainable use of Earth’s natural resources.

As the global leader in minerals and metals processing technology, we have developed many breakthrough technologies over the decades for our customers in metals and mining industry. We also provide innovative solutions for industrial water treatment, the utilization of alternative energy sources and the chemical industry. www.outotec.com

NHM Consulting offers a range of specialized, bespoke scientiďŹ c and analytical services to the international mining sector.

An environmental consultancy providing detailed technical advice to clients enabling them to achieve international best practice and meet sustainability goals.

Our local and international experts provide robust and resilient solutions to environmental and social issues and build internal capacity across businesses.

We are proud to support Brazilian Nickel deliver their flagship PiauĂ­ Nickel Project

nhmconsulting@nhm.ac.uk www.nhm.ac.uk/consulting Advancing the science of nature

info@clavertonassociates.com www.clavertonassociates.com

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Nickel’s Technical Director. “As a company we can empower the local people and build their capacities.”

Luciano Ramos, Chief Operating Officer at Brazilian Nickel, is a native Brazilian with a wealth of experience in mining organisations worldwide.

Locals in the state of Piauí are not wealthy and job opportunities are slim, but Ramos believes that through training opportunities, Brazilian Nickel can prepare locals “not just for Brazil, but for the world.”

Through the Piauí Nickel Project the company aims to create a competitive advantage in the heap leaching of Nickel laterite. Heap leaching is a process of extracting valuable metals from ores through dissolving the metals in solvent. It is a low cost process which naturally brings huge capital cost savings and a competitive edge over other nickel laterite operators.

Local business, local suppliers One way in which the company aims to grow and achieve success as a business while maintaining that local Brazilian foundation is

through working with local suppliers.

Brazilian Nickel works to establish a mutual benefit for both the company and the local partner.

“As a company we realised that local suppliers deliver to high standards but may lack in experience. This is where BRN comes in; we embed sustainability into what we plan to do in the area by creating and training a group of local companies who can then work to world class standards,” says Mike Oxley.

For any mining operation, choosing the location in which to create and develop a project takes time and consideration in order to fully realise the potential in the business. This process saw him look at over 118 different locations in which the technology could be applicable, including Russia, Indonesia, Turkey and North America before settling on Brazil.

“Brazil has a strong mining culture. The people here understand mining and the benefits that it can bring to the economy as well as what it can bring for the ordinary person in terms of the metals we

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use in our technology,” he says. there is a huge melting pot of them Brazil has a strong and clear in Brazil. Of course you can use legislative path which Brazilian Nickel expats but for me it is better if you will follow in order to obtain all the can take your skilled people from required licences for operation. The the country you’re working in.” company in fact has received a great level of support from the state of Booming Brazil in 2016 Piauí and the state capital Teresina, 2016 has been a strong year for it has assisted in this process Brazilian Nickel as the company to allow BRN to both produced its very first understand and operate saleable nickel product within the regulatory from the Piaui project requirements. demonstration plant, Looking at the using low strength choice of location acid lixiviant on Number of employees from a technical the heaps to gain at Brazilian Nickel perspective, Brazil a PLS high in value has a very rich technical metals. From this we base with multiple create a product that technical universities to Oxley believes is the “right support the country’s mining culture. product” to take to the nickel market.

“As a technology company as The company recently completed a well as a mining company, the pre-feasibility study at the site which skills needed to operate are at a determined that at full operation the high level,” says Anne Oxley. project will produce around 24,500 “Engineers, metallurgists, process tonnes of nickel per year contained engineers, electrical engineers in an intermediate product. are all needed for this project and Despite this, Oxley is keen to bring

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the project into production earlier and BRN looks to head into production in early 2018 at a much smaller scale at around 1,000 tonnes per year.

“In many respects, by taking things in bitesize chunks it means we can bring our people and team with us. We have time to develop them and in today’s capital markets, we are aware that it’s not easy and it’s not been easy for a number of years,” he says.

“We feel we have achieved and been different from many other companies in that we have made real progress against very strong headwinds. We expect to keep on being able to do that but we’re not trying to leap and run, we’re making sure we are within our capabilities on each of our steps.”

Breaking out into the world Brazilian Nickel prides itself on its local suppliers and local roots but it does not underestimate the importance of international partners. The nickel industry, despite being global, is in fact relatively small due to the fact there is not a large number of companies producing the metal.

“It does get larger the further downstream you go of course,” says Oxley. “It’s a small industry with nowhere to hide, so It is important for us to build a solid reputation and highlight that as we position ourselves as a low cost producer of nickel we are a professional and ethical company that can bring relatively high shareholder value.”

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Beyond the project, Brazilian Nickel is committed to sustainability. Mine closures are commonplace across the industry and this is something that must be brought to the table of discussion when planning ahead.

A legacy of empowerment Brazilian Nickel incorporates the idea of a positive legacy into its strategy.

As with its commitment to creating opportunities and growth within the local community, the company is committed to a legacy of change as evidenced by the work with growing local supplier businesses.

“Sustainable mining could be regarded as something of an oxymoron,” says Oxley. “Mines by their very nature at some point will run out, regardless of how long their mine life might be.”

“Once upon a time a mine would close and that would pretty much be the end of that

town,” says Anne Oxley.

“If you start at the beginning of the process with a view to create a legacy that can survive the mine, there are things you can do.

Businesses will grow and survive, communities will grow with them.”

The company, in producing the first saleable nickel product, has surpassed its technical expectations and achieved its success on time, on quality and most importantly on budget. This has allowed the company to think beyond the Piauí Nickel Project, with testing currently underway on an improved nickel product with the use of ion exchange and plans to one day expand across wider Brazil and worldwide.

“We are looking at other opportunities of course but right now it’s important not to lose focus on what’s important to the company, which is to get the Piauí project into production,” Mike Oxley concludes.

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“We’ve made a real effort to try and balance employment from different towns and villages in our area so that we don’t just concentrate on one or another to truly maximise the benefit of a local network”

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Sustainable resources Written by Nye Longman Produced by Jack Pascall

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Utilising unmatched expertise, Euromax is delivering its flagship copper-gold mining project in Macedonia while making a significant contribution to the local community

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estled in the verdant hills of south eastern Macedonia are the villages of Ilovica and Shtuka which together sit on one of the nation’s largest copper-gold porphyry deposits.

Spotting the opportunity to develop this lucrative resource back in 2012 after selling European Gold Fields to Eldorado Gold Corp, Canadian-owned Euromax Resources stepped up to the challenge and the current management team moved in. Four years down the line, and with all but one of the necessary permits and assessments completed, construction of a bulk tonnage open pit mine is almost ready for the go-ahead. Business Review Europe speaks to Patrick Forward, Chief Operating Officer at Euromax Resources, and examines how the project has been engineered to be a profitable success, and how the company has placed sustainability at its core.

“We recognised it was actually a business necessity to get the project finance we want, but it is actually, I think we have proved it, relatively easy to do that,” he says.

The Ilovica-Shtuka mine The long term goal of Euromax is to grow to become Europe’s leading gold and base metal mining company, with the Ilovica-Shtuka mine as its flagship project that will employ 500 locals. In line with this ambitious goal, the company and its experienced

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EUROMAX RESOURCES

“A project of this size can move the add percentage points of the GDP of a country that size” – Patrick Forward, Chief Operating Officer

Services • Diamond core drilling up to 3000m • Underground drilling • Directional drilling • Reverse circulation drilling • Oil and gas drilling • Oil and Gas Workover • Water well drilling • Geothermal drilling • Energy drilling • Technical Drilling for Mining • Technical Drilling for Construction • Geological Survey

www.geopsbg.com E-mail: office@geopsbg.com | +359 893 349 105

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When requiring a more intelligent approach to both the built and natural environment, you couldn’t wish for a smarter sausage.

THE BR AINS TO PICK www.wsp-pb.co.uk #brainstopick

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teams are looking to lead the European mining industry for social and environmental responsibility, and for health and safety.

The mine, which has proven sulphide ore reserves of 198.1 million tonnes, is optimally situated, as Forward explains: “We like the area and we like the deposit particularly because we like the copper porphyries. It has got good infrastructure, a well-educated workforce, good logistics, proximity to a smelter and we knew how important all of that was from developing the Skouries deposit further to the south when we were at European Goldfields.

“The deposit has great continuous mineralisation and it is very amenable to open pit development. It was a perfect combination of being on entirely state owned forestry ground, a little bit up in the hills and only 17 kilometres from a reasonable sized town. We weren’t looking at displacing anyone - there is a good workforce available and good infrastructure locally. That’s what attracted us in.”

With construction at the mine

billed for completion in the next two years, Euromax is working with key industry partners to ensure that it is not only delivered on time and on budget, but also to the satisfaction of the local community and to international environmental standards.

The fact that it already had an approved EIA indicated that there was much approval for the project, both locally and in the country as a whole.

“Although we had been working in

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EUROMAX RESOURCES

the area, we didn’t know Macedonia itself; what we found was a country that really wanted to develop its natural resources,” Forward says.

“When we sat down with ministers and the Prime Minister, we immediately realised that there was a desire to attract foreign investment and develop their resources; a project of this size can add percentage points to the GDP of a country that size.”

to deliver on key outcomes.

Forward explains: “We have, through the local technical university, got experts on air and water, dust, noise, and socio-economic professors as well. For water services, we worked with WSP Parsons Brinckerhoff; we particularly chose to have them as dedicated water experts who would be able to talk to all the engineering needs of the project and the environmental impacts.

Sustainability “They manage For Euromax, water on-site but Number of employees at Euromax Resources measuring the also talk to the successful construction environmental and of the project hinges on social impacts of the delivering an operation that has project and make sure that as little an impact on the environment all of the other stakeholders are as possible and, moreover, makes taken care of with respect to water. a positive contribution to society WSP has been absolutely brilliant at large. To achieve this end, the in training up our own people.” miner has examined every link in An important partner was the chain – from studying the social Geops - a drilling contractor used and archaeological impact of the for the project’s drilling, resource, project, all the way through to geotechnical and hydrological engaging with specialist partners work. “Geops has been responsive,

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“We have, through the local technical university, got experts on air and water, dust, noise, and socio-economic professors as well” – Patrick Forward, Chief Operating Officer

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offered very competitive rates and world class quality,” says Forward.

“They have also managed to train up local people as part of their drill operating teams and help us manage community issues relating to drilling.”

SGS was another key partner, Forward explains; its expertise was vital to delivering metallurgical test work over the four years of development. “This has included helping us optimise the process route, establish recoveries and reagent levels, characterise tailings and characterise waste rock,” he says. “The characterisation of tailings and waste rock is a vital part of making sure that our mining waste facilities, including the tailings management facility, conform to the highest international standards.

“SRK has made sure this concept can be applied in a practical way through detailed design and execution of the mining operation.”

This partner was responsible for executing the post-feasibility study

mine design, delivering a range of objectives including geotechnical analysis, pit optimisation and design, haulage design and fleet selection, as well as cost estimation and mine waste management.

“The fact that all of our mine waste is used in the construction of the embankment for the tailings management facility means that we have a reduced footprint,” Forward explains. “The embankment is entirely rock filled and uses the ‘downstream’ construction method which is the most conservative approach available.”

In the four years spent developing the Ilovica-Shtuka mine, Euromax has demonstrated that sustainability isn’t simply a matter of compliance, more an active, positive contribution to the locality. By developing the project in line with the highest international standards, and through working with local and national stakeholders, Euromax has ensured that the project’s positive legacy is secured for the long term.

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Leadership in Integrated Solutions for Mining, Infrastructure and Energy

Written by Mateo Rafael Tablado, editor Produced by Taybele Piven Interviewee Dr. Martin Jorge Dieck Assad, CEO for MADISA

MADISA’s business divisions and territorial presence are why this industry leader can provide outstanding comprehensive solutions in Power Generation, Machinery, Maintenance and Services

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ADISA is Mexico’s largest Caterpillar distributor, a global brand whose equipment, machinery and vehicles serve the construction, mining, energy, oil and gas, agriculture, marine and infrastructure sectors, among others.

In 2016, MADISA celebrated its 70th anniversary. MADISA continues to stand out thanks to excellent customer support and accompaniment despite market movements. Not surprisingly, its customer base is remarkably loyal.

Distributing leading brand products such as Caterpillar and Exxon Mobil lubricants in Mexico is key to MADISA’s continued success. It currently has 70 branches throughout the country.

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MADISA is headed by Dr. Martín Jorge Dieck Assad, CEO. Dr. Dieck is an industrial engineer who earned a PhD in Operations Research and Finance from the University of Texas at Austin while working for the local power company. Upon completing his studies, Dr. Dieck was offered a position there but he instead chose to return home and impart and further develop his knowledge in Mexico.

In addition to helming MADISA for fifteen years now, Dr. Dieck previously worked for the Vitro group, where - under his leadership - some of its companies received notable recognition, such as the National Quality Award. Dr. Dieck also has a passion for teaching and has taught Master-

A M E R I C A L AT I N A

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URBANIZATION: * WATER SUPPLY * ASPHALT AND CONCRETE PAVEMENTS * HIGHWAY * TELEPHONE NETWORK * HIGH AND LOW TENSION ELECTRICAL INSTALLATIONS * WATER PLANT TREATMENT

EDIFICATION: * PROJECTS * BUILDINGS * BRIDGES * SCHOOLS * HOSPITALS * DEPOTS * HOUSING DEVELOPMENT * RESIDENTIAL MAINTENANCESIAL

MBG CONSTRUCTORA S.A. DE C.V. EARTHWORKS: * EARTHENWARE * ROADS OF TERRACES * OUTFALL CANALS * DRAGS * OIL PLATFORMS

www.mbgconstructora.com www.mbgmaquinaria.com

A M E R I C A L AT I N A

level Management courses at the prestigious Monterrey Institute of Technology and Higher Education (ITESM, in its native Spanish), and served on various boards at ITESM and the Regiomontana University.

He is currently on the board of Monterrey’s first polytechnic, the Polytechnic University of Apodaca.

A full range of equipment for all sectors

MADISA offers Caterpillar equipment for different uses, providing unparalleled resources to the mining, construction, oil and gas, infrastructure, energy and other industries. It sells and rents new and used equipment (in excellent conditions): power generators, tractors, forklifts, loaders, excavators, bulldozers, crushers, sieves, compressors, drills, underground mining equipment and cranes. Aftersales services includes parts replacement, maintenance, repairs, methods to improve productivity and operating costs, and also offers

customer-tailored financing.

Expanding across the board

As MADISA continues to expand across the nation so does its range of products and services.

Acquisitions that have enabled the company to expand territorially and the addition of new products and services make up the following key moments: • Introducing the line of Mobil brand lubricants in 1998. MADISA

“Our collaboration programs allow us to define actions and strategies to maintain our leadership” – Dr. Martín Jorge Dieck Assad, CEO for MADISA

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– Dr. Martín Jorge Dieck Assad, CEO for MADISA

A M E R I C A L AT I N A

3,200

Number of employees at Máquinas Diesel, S.A. de C.V.

is today the largest Exxon Mobil distributor in Mexico, the leading brand in the automotive, diesel and industrial sectors.

• The creation - in 2003 - of the Power Systems Division, which provides solutions for the oil, marine and energy segments, is created, installing over 700 megawatts of energy.

• The Agricultural Division emerged in 2010, currently a leader in the sector.

• MADISA acquires MAQSA in 2016. MAQSA is Chihuahua and Durango’s Caterpillar dealer.

MAQSA acquisition and its new scope

The MAQSA acquisition positions MADISA as one of Latin America’s largest CAT dealers. MADISA provides know-how, added value and assurance to its new territory

as well as rental services and products for all sectors. MAQSA facilities now have greater flexibility to serve its customers in the states of Chihuahua and Durango.

“MADISA’s strength and MAQSA’s scope will allow us to break into the territory with more effective solutions,” said Dr. Dieck.

Power generation

MADISA has also been working for the energy sector since 2003. The company has already installed more than 700 Mw in energy projects for different industries of all sizes, with projects ranging from 0.5 Mw to 50 Mw. MADISA has contributed to the implementation of diesel, natural gas, mine gas, landfill biogas, cow dung biogas, and even pig manure biogas generated systems. Industries such as

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“Our decisions always consider how could we increase the value we offer to our clientele” – Dr. Martín Jorge Dieck Assad, CEO for MADISA

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mining, quarrying, aggregates, brick, steel, aluminum, metallurgy, textile, pharmaceutical, agricultural, food and services, among others, have benefited from MADISA. The company has also provided energy to urban developments that previously has no access to the public services’ power grid.

Factors that make the difference

A network of 70 locations nationwide offering each a complete line of services is only one of the many reasons that MADISA stands above the rest.

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Other attributes that give MADISA a competitive edge include: • Having Mexico’s largest fleet of rental machinery. MADISA holds distinguished rankings on a global and local scale. The company places 82nd (both in 2016 and in 2015) among the top 100 machinery rental companies in the world according to International Rental News (IRN) Magazine. In Latin America, MADISA rose from 12th place in 2015 to 8th place, competing not only with regional companies, but also with local affiliates to global companies.

• MADISA’s parts inventory

exceeds US$70 million and is composed of more than 50,000 part numbers.

• Its logistics system allows for parts to become available within up to three days.

• Replacement parts as well as two parts repair centers with cutting-edge technology.

• Customer tailored financial support thanks to Caterpillar Credit.

• Maintenance contracts integrated at various levels, including those that guarantee machinery availability.

• More than 1,000 product

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COMMITTED TO OUR CUSTOMERS Congratulations On 70 Years Of Excellence Thank you to MADISA for providing 70 years of industry-leading customer service and support. No matter the challenge, you can expect MADISA to deliver unmatched expertise and superior solutions.

Keeping your business strong and running, that’s how we’re built. www.cat-lift.com © 2016 MCFA. All Rights Reserved. CAT, CATERPILLAR, BUILT FOR IT, their respective logos, “Caterpillar Yellow,” the “Power Edge”trade dress as well as corporate and product identity used herein, are trademarks of Caterpillar and may not be used without permission. All registered trademarks are the property of their respective owners. Some products may be shown with optional equipment.

“For 70 years, we’ve kept pushing forward, delivering the best support in our industry” – Dr. Martín Jorge Dieck Assad, CEO for MADISA

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specialist technicians.

• Its own lubricant and fluid laboratory to ensure a predictive maintenance approach.

• GPS technology via the LINK VISION system. Every machine is equipped with sensors that send data to remote computers to monitor equipment status, performance, productivity and maintenance times.

Technological support

MADISA uses technology to not only equip its sales force with resources such as tablets to easily access data and graphics, but has also developed applications to help its staff show the customer the benefits and characteristics of each product.

MADISA uses other tools to ensure operational logistics, boasts a data warehouse and uses applications that analyze company-generated information to improve productivity.

“We see technology as a strategic enabler in our operations,” said Dr. Dieck.

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Strategic partners: a key factor for integrated solutions

MADISA regards its suppliers as strategic partners. In addition to being a pioneer when it comes to technical innovation and quality,

MADISA is praised for their product support and personnel training. “Working together with our strategic partners makes all the difference and really sets us apart,� revealed Dr. Dieck.

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programs—is able to produce twelve qualified technicians a month.

Meanwhile, business training programs teach the sales force to show customers how to get the best operating costs and make the most out of the equipment.

“Training is a strategic differentiator able to make our staff stand out from the rest,” said the CEO. MADISA has formed a partnership with the National School of Technical Vocational Education (CONALEP).

Along with this institution, the Diesel Technician Program was developed, opening in 2010 from which graduates are currently employed.

Intensive training

Our technically qualified personnel is thanks to in-depth training conducted at MADISA training centers in Monterrey, Mexico City, and now, following the MAQSA acquisition, in Chihuahua. Each of the training centers —which include dormitories and a meal area for those in intensive training

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Aligned environmental responsibility

MADISA facilities manage their toxic waste adhering to certifications granted by Caterpillar, which awards degrees and has awarded MADISA’s Monterrey parts repair center the highest honors (five stars).

CAT support allows staff to guide and support each customer

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so that their operations are also as environmentally friendly as possible.

Projections

Success and growth experienced in 2016 have set a precedent for MADISA, regardless that several markets that the company serves are experiencing somewhat tough

times. MADISA is confident about its immediate future, for despite the country’s previous crises, it has flourished and emerged stronger.

The company trusts it will continue to do so without exception.

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Mining: a factor pushing forward for Atacama’s development

Written by Mateo Rafael Tablado Produced by Taybele Piven Interviewee Sergio Armstrong, CEO for Minera Candelaria

MINERA CANDELARIA

Lundin Mining leads a very productive copper operation through Candelaria, contributing to the Atacama region and its population

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inera Candelaria (Candelaria Mining) is the Lundin Mining Corporation’s most important operation. This mining complex has established itself as a powerful economic and social driving force in the Atacama Region. It was first to erect and operate a desalination plant in Atacama and signed an agreement with the township of Tierra Amarilla, vowing that their mining and processing operations there would help the community develop economically and socially.

In November 2014, Lundin Mining acquired 80 percent of Minera Candelaria. Following this transaction, the Candelaria district (consisting of

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the open pit and North Candelaria, Santos and Alcaparrosa underground mines) became the corporation’s most important asset in terms of production and number of workers.

Lundin Mining is growing via acquisitions in the same way that Candelaria’s mining district has.

Lundin boasts corporate operational technical support in areas such as risk prevention, environment, resources, planning, processing, and community relations.

“Candelaria is a leader in the region’s mining sector and in the development of social contribution projects,” said Mr. Sergio Armstrong, Candelaria’s CEO. Mr. Armstrong graduated as a Metallurgical Engineer from the University of Concepcion,

L AT I N A M E R I C A

obtained a postgraduate degree in Human Resource Management at the University of Santiago, and is a graduate of the ESE (Higher Business Studies) Business School’s Advanced Management Program from the University of Los Andes.

He has been recognized by Chile’s Colegio de Profesionales Expertos en Seguridad Minera (College of Professional Mining Security Experts) for his contribution and commitment to preventive safety management.

Sergio Armstrong, CEO for Minera Candelaria

“Candelaria is a benchmarking labor resulting in no harm to individuals, operational excellence, respect for the environment and mutual growth along with its surrounding community”

Open pit and underground copper, gold and silver Candelaria’s mining operations are located in the township of Tierra

- Sergio Armstrong, CEO for Minera Candelaria

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Amarilla, 18 miles south of Copiapo in Chile’s Atacama region. Its main product is copper concentrate, while gold and silver are among their marginal yields. In addition to the open pit operation, it has the North Candelaria, Santos and Alcaparrosa underground mines.

Approximately 230,000 tons are extracted daily from the Candelaria mining district, of which about 75,000 tons are minerals that are sent to the Candelaria and Pedro Aguirre Cerda concentrator plants for processing. In 2015, Candelaria reached a production of 181,040 tons of copper and 102,500 ounces of gold and 1.8 million ounces of silver.

About 70 miles away, in the city of Caldera, is the Punta Padrones Clean Mechanized Port which ships copper concentrate intended for international markets. The Seawater Desalination Plant is also among

the Punta Padrones Port facilities.

Safety and life as a value Candelaria has undergone an interesting transformation in terms of workplace safety. The first stage, lasting five years, saw the reactive culture transform into a proactive one concerned with security in three main areas: • Visible leadership: interaction with team members and identifying opportunities for improvement.

• Training: prepare the workforce through internal courses and certifications.

• Control: set goals and key indicators to ensure proper performance.

During the second stage, which also lasted five years, safety became a value. Currently, its main focus is enshrining the concepts of personal responsibility, self-care and selfdirected work teams, where each

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team member is a security leader.

The ultimate goal being attaining a Zero Injury production process.

Cutting edge technology: operational and administrative support Minera Candelaria’s open pit enjoys MESH (WiFi) communications technology, useful in obtaining data generated by sensor shovels, loaders and haul trucks (CAEX).

The MEM system monitors CAT truck fleet operations. Slope stability is monitored via four next-generation radars.

Meanwhile, the concentrator plant uses an online X-ray copper grade system; while the primary crushing and flotation circuits rely on a top-grade control system that optimizes the process.

Another resource for efficient monitoring is the IP Visualization Suite platform which provides concentrator plant as well as port real-time process variables at all times, even remotely.

Presently, the Head Office system is being used to better monitor transport equipment fuel consumption.

Administratively, Candelaria’s SAP system centralizes and controls finances, human resources, maintenance, costs, projects, supply and storage information, as well as inventory management, materials and services procurement.

Suppliers: partners in the path to development Beyond service and product deployment, Candelaria’s purveyors must align to the company’ principles and practices in areas such as work safety, environmental care and compliance with government regulations, among others.

Candelaria has established successful strategic alliances with vendors to ensure that the parts and consumables supply chain run smoothly. Its underground mining operations boast exceptional maintenance of its fleet and outstanding personnel services.

The company is currently implementing a Supplier Development Program (SDP) aimed at microentrepreneurs in Tierra Amarilla, Copiapó and Caldera, in conjunction

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with other agencies such as the Production Development Corporation (CORFO) and the Corporation for the Development of Atacama (CORPROA).

Accurate position profiles and community integration The recruitment processes are guided by a complete description of every position, in which hard and soft skills are included. Candidates can consult job openings and apply via Candelaria’s website, and must then undergo interviews.

Candelaria mining has established itself as an important employment

generator in the area, not only because of the hired local workforce but the use of goods and services from local suppliers. Today, they provide more than 4,000 direct jobs.

Despite the dip in the copper market, jobs have been maintained thanks to reduced costs, increased productivity and innovation commitments.

“We favor hiring our own operators from the neighboring Tierra Amarilla township,” said Mr. Armstrong.

Environment and resources: optimal water management Caring for the environment is a

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cornerstone for Minera Candelaria, and 3 percent is treated water. whose operations are certified under ISO 14001 standards.

Sustainability in the All its facilities use monitoring, environment control and analysis programs.

Minera Candelaria’s Social The Investment company’s water Program management emphasizes the has resulted in development the consumption of sustainable of 85 percent projects in areas of reclaimed water. health, education, Thanks to the productive desalination activities, plant, running infrastructure, since January environment and 2013, water from culture, which the Copiapo have contributed River is no longer to improve the – Sergio Armstrong, CEO for Minera necessary for quality of life Candelaria production of neighboring processes. communities.

The 2015 “We are building water balances indicate that 85 local, transparent and inclusive percent of the water required for relationships with our communities,” operations is reused or recycled continued Mr. Armstrong. water, 12 percent is desalinated water The excellent relations Candelaria

“Our suppliers are essential to our operation, as they add value in different areas of our processes”

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has established with the community have not gone unnoticed. Institutions and the communities of Tierra Amarilla and Copiapo are thankful for Candelaria’s support following the flood happening on 25 March, 2015.

Investments and upcoming goals Lundin Mining has important plans for Candelaria. The operation is expected to receive a US$ 400 million investment for the Candelaria 2030 business continuity project, which involves the construction of the Los Diques tailings basin, as well as strengthening the tailings driving

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system and installation of a borrow pit.

Underground mining operations will strive to consolidate new resources.

Candelaria’s permanent goal, however, is to maintain high performance operations with low operating costs, generating positive cash flow margins within today’s decrease in copper prices.

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