AN EFFICIENT SUSTAINABILIT Y TRANSFORMATION
A P R IL 2 0 19
www.miningglobal.com
Cybersecurity at a global Caterpillar dealer
Disrupting the potash market
PT Merdeka Copper Gold: Defining best practice in Indonesia Executive Director Colin Moorhead on the success of the Tujuh Bukit mine
TOP 10
SERVICE AND SAFETY IN MINING
Trends transforming the future of mining
FOREWORD
W
elcome to the April issue of
of Mines, explains why it’s vital his
Mining Global.
country’s government deliver
This month we hear from Jaguar
concessions on tax increases to
Mining’s Jon Hill on the state of play
boost investment.
of the industry in Brazil. As the mining
With demand for copper as well as
world comes to terms with the
other tech metals on the rise,
tailings dam tragedy at
we bring you the lowdown
Brumadinho, and following
on the latest trends in
a decade of stagnation,
the battery metals
will the change of
market from TechMet
government, combined with the recently launched
Jon Hill VP, Jaguar Mining Inc.
National Mining Agency and a rush for copper, help overcome recent setbacks and
CEO Brian Menell, who offers his predictions for the future production of tech commodities.
kickstart a boom?
For this month’s Top 10, we’ve also
We spoke with Stephen de Jong,
analysed the annual Tracking
Founder & CEO at VRify, and
the Trends report from Deloitte
discovered how the mining sector can
highlighting areas of innovation
up its presentation game in the bid for
transforming the future of mining.
investment with interactive 360-degree
Enjoy the issue!
walkthroughs of mining sites. Also in this issue, Goodwell Mateyo, the President of Zambia’s Chamber
Daniel Brightmore daniel.brightmore@bizclikmedia.com
w w w.mi ni nggl o b a l. com
03
Click the home icon (top right of page) to return to contents page at anytime
EDITOR-IN-CHIEF
DAN BRIGHTMORE MANAGING EDITOR
PRESS PLAY! WHEN YOU SEE THE PLAY BUTTON ICON, CLICK TO WATCH OUR VIDEO CONTENT
OLIVIA MINNOCK CREATIVE DIRECTORS
DANIEL CRAWFORD STEVE SHIPLEY CREATIVE TEAM
FRAZER JONES LUCIE MILLER ERIN HANCOX ALICIA LOLOTTE
Wherever you see these icons in the magazine click to be directly connected via social media
PRODUCTION DIRECTOR
DANIELA KIANICKOVA PRODUCTION EXECUTIVE
LUNA GUTHRIE DIGITAL VIDEO DIRECTOR
05
JOSH TRETT DIGITAL VIDEO PRODUCER
EMILY AMOS SOCIAL MEDIA MANAGER
CALLUM RIVETT PROJECT DIRECTORS
RICHARD DEANE OPERATIONS DIRECTOR
ALEX BARRON GROUP MANAGING DIRECTOR
CLICK NOW TO SUBSCRIBE FOR FREE
JAMES PEPPER CHIEF OPERATIONS OFFICER
ANDY TURNER PRESIDENT & CEO
GLEN WHITE
Visit the supplychaindigital.com website and sign up to receive exclusive access to one of the world’s fastest growing business news platforms. IF YOU LIKE US
PUBLISHED BY
FOLLOW US!
CONTENTS
PT Merdeka Copper Gold: Achieving success with the Tujuh Bukit mine
12 38
JAGUAR MINING INSIGHT
THE MINING WORLD DIGS IN FOR A THRILLER IN BRASILIA
50 THE TECH METALS REVOLUTION
62 Immersive virtual mining tours in the palm of your hand
72
84
Chamber of Mines:
TOP 10
Trends Transforming the Future of Mining
spearheading Zambia’s mining revolution
98
Events
LEADING MACHINE-TOOL SUPPLIER WORLDWIDE IN OIL&GAS DANOBAT focus on providing the most suitable solution for your API, GOST and PREMIUM thread requirements fo medium and high production applications, addapting automation level and machines layout to your particular needs.
DANOBAT
Arriaga kalea, 21 E-20870 ELGOIBAR (Gipuzkoa) Spain
Tel.: + 34 943 74 80 44 danobat@danobat.com www.danobatgroup.com
102 Finning International
138 DSI Underground
120 Largo Resources
152
Emmerson
Covering every angle in the digital age The Business Chief platforms offer insight on the trends influencing C and V-level executives, telling the stories that matter
CLICK TO SUBSCRIBE FOR FREE
w w w.bu si nessch ief.com
PT Merdeka Copper Gold: Achieving success with the Tujuh Bukit mine
12
WRITTEN BY
SEAN GALEA-PACE PRODUCED BY
RICHARD DEANE
APRIL 2019
APRIL 2019
13
w w w.mi ni nggl o b a l. com
PT MERDEKA COPPER GOLD
Colin Moorhead, Executive Director of Merdeka, discusses the success of its Tujuh Bukit mine in Indonesia
T
wo years into the development of a major project, the Tujuh Bukit Project in East Java, Indonesia, mining firm PT Merdeka
Copper Gold has become accustomed to setting an example in the mining sector. 14
With significant work completed on the project, Merdeka has continued to achieve substantial growth and exceed expectations. Having played a major role in the success of the mine during the past few years, Colin Moorhead, Executive Director of Merdeka, has utilised his extensive experience in the industry to oversee one of Indonesia’s most important mines. Having started his early career with Newcrest Mining as a geologist, he worked in a number of different positions in a 30-year stint that included roles such as General Manager Resources & Reserves and Executive General Manager of Minerals. In early 2016, Moorhead became the Vice President Director and CEO of PT Merdeka in addition to being appointed in the honorary role as President of AusIMM – the peak body for Australasian Mining Professionals with approximately 13,000 APRIL 2019
15
members worldwide and a parent body for important codes of practice such as The JORC Code. He then transitioned into his new role as Executive Director of the company in 2018, in addition to assuming the position of Non-Executive Chairman of Finders Resources in August 2018 alongside this role. Moorhead believes such experience has allowed him to better understand the challenge of overseeing key projects with Merdeka. “When I first became involved, Merdeka was very much a new company and it was listed on the w w w.mi ni nggl o b a l. com
DELIVERING SERVICE EXCELLENCE WITH DEEP EXPERTISE TO SUPPORT YOUR BUSINESS
uniteda@arkato.com | www.arkato.com DIRECT CONTACT
Hafizh Kasmir
President Director M . +6281 1825445 E .hafizh.kasmir@arkato.com
Hanung Kusuma
Director Operational & Assets M . +6281 15422872 E .hanung.kusuma@arkato.com
OUR VALUE
Adam Budijaya
Business Development Manager M . +6281 294053667 E .adam.budijaya@arkato.com
w w w.mi ni nggl o b a l. com
PT MERDEKA COPPER GOLD
“If you benchmarked Tujuh Bukit’s construction and compared it to any other project globally during this period, it would be up there as one of the best. Many projects don’t achieve their expectations early on; this one has exceeded them” — Colin Moorhead, Executive Director of Merdeka
18
stock exchange with the vision to become an internationally respected, Indonesian owned and operated company. Now, three years later, we’ve constructed and commissioned a new mine and produced over 300,000 ounces of gold.”
BUILDING A SUCCESSFUL MINE Having commenced work on the Tujuh Bukit project three years ago, Moorhead affirms how important the project has been to Merdeka. “We’re mining the epithermal gold cap associated with APRIL 2019
CLICK TO WATCH : ‘CORPORATE VIDEO – MERDEKA COPPER GOLD’ 19
a large porphyry system for gold and
With the majority of commissioned
silver. It’s a heap leach operation which
projects struggling to meet such a high
is getting ramped up from 4mn to 8mn
trajectory, Tujuh Bukit comfortably
tonnes per annum,” says Moorhead.
exceeded expectations and produced
“We’re in the process of commissioning
more gold than anticipated, despite
an expanded production capacity that
some early issues in the development
we hope will see us set a record
process. “One of the things that sets
production again this year. It’s a fully
us apart from other gold mines is that
operational mine that is also home to
we don’t have a huge footprint in terms
a potential future mass underground
of waste,” he says. “We manage safety
copper mine. Many of our partners that
and the environment to very high
are supporting this exercise are
standards and I am pleased to say
helping us create a world-class, long
that since commissioning two years
life and sustainable underground mine.”
ago, there hasn’t been a significant w w w.mi ni nggl o b a l. com
Metso Minerals in Indonesia
Local Presence, Global Expertise, Growing Together. For the past 20 years, Metso has firmly established itself as a committed partner and strong supporter of the Indonesian mining industry. Being located close to our customers, we listen to their needs and provide our unique knowledge and innovative solutions to support their business objectives. This is the story of how we grow together with our customers. This is how we make a big difference the Metso way.
Visit our Website www.metso.com follow us:
Contact Us
Growing together with our customers Metso first commenced operations in Indonesia in 2004 to support the growth of the local mining industry. As part of its continuous efforts to ensure a strong local presence, PT. Metso Minerals Indonesia (PT. MMI) employs more than 70 people and has expanded to include: • a sales and administration office in Jakarta; • a service centre in Surabaya and; • site operations at various key customer locations. At the heart of it all is Metso’s commitment to growing together with our customers in Asia Pacific. The importance of safety Managing safety is never an easy feat. Over the years, PT. MMI has developed a strong safety culture across the working sites by constantly reinforcing, educating and emphasising the safety requirements needed to perform tasks in a safe manner. As a result, it achieved a remarkable feat of having 5000 Lost Time Injury (LTI) free days on 28 January 2019. One of our longest serving employees, Sinta Yunianti, strongly believes in the importance of safety. “People often take safety for granted but to us, the implementation of a strong safety culture is the reason why all of us get to go home to see our parents, spouse and children.” A strong Indonesian presence We place a strong emphasis on driving customer centricity in whatever we do. This means understanding our customers’ needs and their business objectives. Our strong presence and capabilities in Indonesia mean that we are well equipped to work collaboratively and support our customers to deliver these goals. Our sales office in Jakarta allows us to be more responsive with in-country sales and technical support. It has not only given us opportunities to create new relationships, it has also helped strengthen ties with some of our longest customers. Our recent projects have included the installation of screens, crushers, mills, gear replacements at key Indonesian mining operations. Similarly, our service centre in Surabaya aims to maximise our customers’ operational efficiency through maintaining and prolonging the original quality and performance of their equipment. Various customers from Malaysia, Vietnam and Philippines are also supported from this facility. Scott Peterson, Director of Service Operations, is keen to emphasise the need to maintain the quality of our service facilities and capabilities. He said “Our customers get peace of mind
knowing that we constantly strive to improve our service quality and standards. We are delighted that we will have a new service centre in Surabaya scheduled to open in 2020. This will enable us to further enhance the level of support for our customers.” The future With the impending opening of a new service centre, Metso’s commitment and support to the Indonesian mining industry will only continue to develop. Ben Weetman, VP of Metso Minerals Asia Pacific, says ”What we have done in Indonesia is a testament to our continuous efforts to ensure a strong and committed local presence. These are exciting times for us as Metso continues to invest, enable and support all our customers not just in Indonesia, but the whole of the Asia Pacific region. As we drive towards becoming the leading mining OEM and service provider in the region, we will continue to grow and expand our capabilities to meet the needs of our customers.”
OCEAN FREIGHT | AIR FREIGHT | INLAND TRANSPORT
Trans Continent is a Global Logistics & Supply chain company, Focused in Mining Industries, Oil & Gas and Project Cargo, covering: Heavy Lift, Vessel/Flight charter, Cyanide, Explosive, Radioactive & other Hazmat transport, handling & warehousing, including Waste Management. www.tcontinent.com | Project@tcontinent.com
www.tcontinent.com smart focused committed
reportable environmental incident. That
worldwide. “If you benchmarked Tujuh
operational readiness didn’t happen
Bukit’s construction and compared it
by accident. It requires a very strategic
to any other project globally during
approach and planning from some
this period, it would be up there as one
experienced people to enable it to work.”
of the best. Many projects don’t
Due to the significant success
achieve their expectations early on;
the Tujuh Bukit mine has sustained,
this one has exceeded it. I think you’d
Moorhead believes that the develop-
have to look pretty hard worldwide to
ment is among the leading projects
find a mine that was built on time, on
E XE CU T I VE PRO FI LE
Colin Moorhead Colin has worked in exploration and mining for 3 decades since graduating from the University of Melbourne with a BSc. (Hons) majoring in geology and geophysics in 1987. Most of his career was spent with Newcrest Mining Limited where amongst other roles he was Chief Geologist for periods at Telfer (WA), Cadia (NSW) and Gosowong (Indonesia) mines before returning to Melbourne as General Manager Technical Services for the Newcrest Group in 2006. In 2008 Colin was appointed Executive General Manager Minerals responsible for global exploration, mining geology, resources and reserves governance and orebody knowledge. In January 2016 Colin was appointed CEO of emerging Indonesian gold producer PT Merdeka Copper Gold, Tbk. Colin is also a Graduate of AICD and a graduate of Harvard Business School, Advanced Management Programme (AMP). Colin was President of AusIMM from 2017-2018 and is currently the Immediate Past President. Colin is involved in numerous AusIMM Board Committees and is currently the Chair of the International Advisory Forum.
w w w.mi ni nggl o b a l. com
23
REAL PRODUCTS REAL PEOPLE REAL RESULTS Dyno Nobel is a global leader in the commercial explosives industry with more than 3,770 employees, including some of the most highly trained blasters in the industry. We manufacture over 54 million pounds of packaged explosives and more than 1.2 million tons of ammonium nitrate capacity. We have 32 manufacturing facilities on three continents (including state-of-the-art initiation systems facilities in the United States, Australia and Mexico) and our Engineering and Technology team supports domestic and export product sales, as well as the use of our cutting-edge technologies around the world. We increase customer profits through performance with our Groundbreaking Performance through Practical Innovation. • We develop, practical and reliable solutions anticipating the future, to exceed our customer expectations • We are global experts in explosives, cultivating and applying industry knowledge, to create value for our customers • We are a reliable, collaborative partner, committed to achieving the best possible results for our customers The Practical Innovator Dyno Nobel provides customer solutions through our people, our products, and our services. Our blasters are among the most highly trained in the industry. Dyno Nobel provides a full range of reliable explosives products from manufacturing plants around the world, and blasting services from a distribution network unmatched in the industry.
Contact Us
Our R&D is focused on practical ways to use new technologies to benefit our customers.
Visit Our Site
“You’d have to look pretty hard worldwide to find a mine that was built on time, on budget, and exceeded its expectations in its first two years” — Colin Moorhead, Executive Director of Merdeka
budget, and exceeded its expectations
it’s not like that at all. The technology that goes into a modern mine is quite sophisticated and mining has become a leader in the areas of automation, electric vehicles, Big Data and artificial intelligence,” he explains. “If you’re building a 30+ year mine, which hopefully Tujuh Bukit will be, you have to get ahead of the curve. I think mining can be slow to adopt technology because of how mines traditionally operate. Mining investments are capital intensive, and much of the process and technology is locked in up front. It can be very costly and risky to change as technology evolves.” With technology allowing operations
in its first two years. It’s an incredibly
to be conducted more efficiently,
important achievement.”
Moorhead reflects on how his company has adapted its strategy in order to
IMPLEMENTING TECHNOLOGY
digitise. “During my 30-year career,
In the past, mining was often considered
we’ve gone from coloured pencils and
as one of the industries slowest to
graph paper to massive data process-
embrace new technology. However,
ing in a very short period of time.
Moorhead believes that the mentality
You’ve got automated drilling rigs with
is shifting, with digital transformation
live feeds going to people working
redefining the way companies
remotely. We must adapt and adopt
worldwide operate. “The mining sector
new technologies quickly. I don’t think
has got a reputation for being an
we’ll be using diesel equipment in
old-fashioned industry – but in reality,
underground mines soon due to w w w.mi ni nggl o b a l. com
25
Suprabakti is proud to supply conveyor idlers and pulleys for the Tujuh Bukit expansion Project. We have invested in the equipment and technology to produce of our products in house to be able to supply the highest quality product. We continue to invest in the technology, robotic welding for idler frame, laser cut, CNC lathe, CNC plate bending and most recently conveyor roller testing equipment to test water and dust ingression.
ROLLER & PULLEY
Conveyor Idler and Pulley, Made in Indonesia
We are proud to say all our products are made in Indonesia.
TKDN Certified Love Domestic Products
FOR MORE INFO CONTACT: PT. Suprabakti Mandiri Jl. Danau Sunter Utara Blok A No. 9, Jakarta Utara - 14350 Phone: (021) 65833666 | Fax : (021) 65831666 Email: info@beltcare.com | www.beltcare.com
“We’ve got a much stronger balance sheet and our market cap has increased from around $500mn to almost a billion” — Colin Moorhead, Executive Director of Merdeka
27
potential health risks, I believe you’ll
a project in North Sulawesi called Pani.
find most underground mines in the
“We took over Finders Resources to
world will go electric and I believe that’ll
operate the Wetar Copper Mine in the
probably be using high tech recharge-
Maluku province. We’ve leveraged
able, quick charge batteries to do it.”
our capabilities, both technical and non-technical, to help turn around an
KEY ACQUISITIONS AND INVESTMENTS
underperforming asset. We’re looking
Since Moorhead joined Merdeka, he
at transforming the operation to enable
has overseen important acquisitions
a more profitable organisation and
such as that of Australia-based copper
allow for an exploration which will allow
miner, Finders Resources Limited, and
us to extend the mine life,” says Moor-
an agreement to purchase 66% of
head. “We’ve also just signed a deal for w w w.mi ni nggl o b a l. com
WORKING TOWARDS A SUSTAINABLE FUTURE IN EXPLORATION AND MINING SGC provide concise analysis and solutions in geological and engineering for the resource and minerals industries. Geology and Exploration Extensive global experience and practical solutions in exploration, resource modelling, estimation, independent project audits and reviews.
Waste management Through our associates and industry network connections we are able to guide clients to industry best-practice consultancies in relation to waste management.
Projects evaluation Our independent advise and global technical expertise will help you generate value from your project.
Mining With our experience in many different types of geological terrain SGC’s personnel will provide the guidance and solutions you need.
SGC are based out of Melbourne-Australia and pride ourselves on upholding the highest degree of integrity both in respect of the studies undertaken and ethics with which we operate.
Spiers geological Consultants Phone: +61 400 017 583 Email: rhuonspiers@gmail.com
the acquisition of Pani which is a similar
refinance at both a corporate and
sort of gold, deposit to the gold cap at
holding company level. “We’ve got a
Tujuh Bukit. It’s historically had a lot of
much stronger balance sheet and our
exploration and some informal mining
market cap has increased from around
and has the potential to be our next
$500mn to almost a billion,” explains
significant gold mine.”
Moorhead. “We’ve made some signifi-
During the next three years, Moor-
cant investments such as the oxide
head highlights how his company will
expansion project which sought to
complete a pre-feasibility study on the
take advantage of the fact that we’ve
Tujuh Bukit underground copper mine
put construction and financing risk
by investing approximately US$100mn.
behind us. We re-optimised the project
“If successful, the mine would be a very
previously constrained by finance and
significant underground copper gold
construction risk resulting in a mine that
mine that would last for more than 25
will produce over 1.2mn ounces of gold
years,” he says. Strong cash flow from
which is a big increase from just under
operations has allowed Merdeka to
900,000 ounces in the original plan.”
w w w.mi ni nggl o b a l. com
29
31
“Our partnerships are absolutely critical because we can’t do it alone” — Colin Moorhead, Executive Director of Merdeka
FORMING KEY PARTNERSHIPS With the importance of establishing and sustaining key partnerships with other companies vital to achieving success, Merdeka has formed alliances with Cohesion Group, Transcontinent, Geoservices, DNX Indonesia, PT Indodrill Indonesia, Spiers Geological Consultants, Metso and Lorax Indonesia. “Our partnerships are absolutely critical because we can’t do this alone. I think those partners supplying goods and services are critical to the success w w w.mi ni nggl o b a l. com
MINERAL DIVISION – GEOASSAY LABORATORY Our current range of mineral / exploration services capabilities include but not limited to the following: • Mineral / Exploration Analysis • Mineral Sands Beneficiation Testwork • Metallurgical Testwork • Geotechnical Testwork • Advanced Mineralogy – XRD / SEM • Acid Rock Drainage Testwork • Metal Analysis • Mine and remote site preparation laboratories Additional services available through PT Geoservices : Coal Testing, Environmental, Exploration, Drilling, Oil & Gas Jakarta Office Jl. Minangkabau Barat No. 34, Jakarta, 12970 Phone : (021) 830 5555, 831 8989 Fax : (021) 831 1454 Email : jktbranch@geoservices.co.id
Bandung Office Jl. Setiabudhi No. 81, Bandung, Jawa Barat, 40153 Phone : (022) 203 1316, 203 5436 Fax : (022) 203 8090 Email : bdgoff@geoservices.co.id
Mineral Laboratory Jl. Industri Selatan II Blok MM1 Jababeka 2, Cikarang, Bekasi, Jawa Barat,17530 Phone : (021) 893 7833-34 Fax : (021) 893 7835 Email : mindiv@geoservices.co.id
“Excellent Services With High Professional Integrity“
www.geoservices.co.id
SAFETY PRODUCTIVITY PRIORITY FOLLOWED BY
IS OUR
A MEMBER OF THE
INDODRILL SITE GDE SITE
2012
Year founded
250mn
Indonesian rupiah spent on health care in the community (2017)
1,850+
Approximate number of employees
33
of the operation. For example, Lorax is a globally recognised leader in the environmental support of mining operations. When it comes to tasks such as environmental impact statements and data analysis, we couldn’t do it without them. You need professionals and Lorax offer that,” he says. “Indodrill provide a lot of drilling for us and has been fantastic down at Tujuh Bukit. They’ve recently completed six deep directional drill holes for us which were highly technical. Metso provided all of the crushing gear and we duplicated the crusher because we were very w w w.mi ni nggl o b a l. com
PROUD TO BE THE STR ATEGIC PARTNER OF MERDEK A COPPER GOLD I N I M P L E M E N T I N G S U S TA I N A B L E D E V E L O P M E N T I N I N D O N E S I A
T H E M I N E E N V I R O N M E N T C O N S U LT A N T S W W W. L O R A X . C A | I N F O @ L O R A X . C O . I D
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
35
happy with all of that gear. Spiers Geological Services does all of our resource estimation and has been a great supporter of us while providing a lot of professionalism.” “Transcontinent is a group which offers logistical support as well as managing the critical supply chain in terms of transport and they’ve been able to do that safely and reliably. Geoservices provides superintending for our gold and silver when it goes to
“If you’re building a 30+ year mine, which hopefully Tujuh Bukit will be, you have to get ahead of the curve” — Colin Moorhead, Executive Director of Merdeka
w w w.mi ni nggl o b a l. com
PT MERDEKA COPPER GOLD
“We have key plans for the future of the mine and we can’t afford to be complacent” — Colin Moorhead, Executive Director of Merdeka
the Tujuh Bukit mine, Moorhead points to how important it is that his company remain focused on the task at hand in order to ensure the mine continues its success. “We have key plans for the future of the mine and we can’t afford to be complacent. This year, we’re in the process of securing a large fleet and transitioning from a client of a contractor to an owner. It’s important to remember to develop people, systems and processes in order to do that successfully. You can’t afford production to drop off during that transition,” explains Moorhead.
the mint. They also provide metallurgical
“I would like to see the Tujuh Bukit mine
test work and assign services for us and
continue to grow from strength to
we consider them a critical supplier in
strength as we ramp it up to 8mn
the chain,” he says. “DNX provide not
tonnes per annum. In a few years’ time,
only the materials but the technology
we could have two or three operating
and the expertise to help us with
gold mines, an operating copper
blasting operations safely and efficiently
mine, and a major underground project
and to improve over time. They’re some
development on our hands which
great examples of people who have
would make us a very significant
brought lots of aid to the table and we
company worldwide in copper and
really appreciate working with people
gold. I want us to become a modern,
we can trust.”
sustainable, innovative and respected Indonesian mining company.”
FUTURE PLANS With high ambitions for the future of w w w.mi ni nggl o b a l. com
37
L E A D E R S H I P & S T R AT E G Y
JAGUAR MINING INSIGHT
THE MINING WORLD DIGS IN FOR A THRILLER IN BRASILIA
38
Following a decade of stagnation, will the change of government, combined with the recently launched National Mining Agency, and a rush for copper help overcome recent setbacks and kickstart a boom? Jon Hill, Vice President, Geology & Exploration at Jaguar Mining, explores the state of play of the industry in Brazil WRITTEN BY
APRIL 2019
DAN BRIGHT MORE
39
w w w.mi ni nggl o b a l. com
L E A D E R S H I P & S T R AT E G Y
B
razil’s mining heritage has been dominated by the major players in the global iron-ore and base metals
industry, led by Vale, BHP and Nexa Resources. Despite large-scale projects coming into
production over the past decade, Brazil has lagged behind in the global race for investment and the development of its mining sector. The likes of AngloGold Ashanti and Kinross have delivered significant gold production, 40
but only limited investment, especially in exploration. The junior exploration sector peaked in 2011 with over 50 junior explorers active in Brazil but fewer than 10 remained in 2018 and struggle to attract investment. When projects have been well managed and capitalised, success stories such as Avanco and Ero Copper have emerged. With over 30 years’ experience in the industry worldwide – and 12 years across Brazil in his previous role as Exploration Manager at AngloGold Ashanti - Jon Hill, Vice President, Geology & Exploration at Jaguar Mining, believes Brazil’s mining industry has been stagnant for too long, lacking a healthy balance of junior to mid-tier and major exploration investments. “The past decade has been dominatAPRIL 2019
41
w w w.mi ni nggl o b a l. com
L E A D E R S H I P & S T R AT E G Y
ed by bad news stories,” he laments.
as a vote for material change in the
“There has been a lack of support from
way Brazil is managed, rather than a vote
government agencies, also blurred by
for any particular political or social
corruption scandals and underpinned
ideology. The recently launched National
by antiquated bureaucratic tenement,
Mining Agency (ANM) replaces the
environmental management and
National Department of Mineral Produc-
licensing processes which have
tion and, based on a new regulation
discouraged investment.”
of the mining code that gives more
Brazil has undoubted potential to
42
legal security, is tasked with ‘promot-
host world class deposits of nearly all
ing the management of the mineral
mineral commodities, which is why Hill
resources of the Federal Government,
believes the mining sector can
as well as the regulation and inspection
underpin economic growth for years to
of activities for the use of mineral
come. However, to unlock that potential
resources in the country.’ Is Hill confi-
regulatory change, Hill cites the recent election bringing Bolsonaro to power
“ Change is welcome because the ANM will attract a better quality of professional to look after the sector and remove bureaucracy” — Jon Hill, Vice President, Geology & Exploration, Jaguar Mining
APRIL 2019
CLICK TO WATCH : ‘JAGUAR MINING IN BRAZIL’S IRON QUADRANGLE’ 43 dent this new approach can succeed?
great opportunity for serious explorers,
“Change is welcome because the
but the ANM will need to address long
ANM will have more funding to attract
standing issues, says Hill. “The manage-
a better quality of professional to look
ment of mining and exploration within
after the sector and remove bureau-
the so-called border zone, which to
cracy so the processes of awarding
date has sterilised some 20% of Brazil’s
mineral titles and tenements can start
prospective surface area, allowing
flowing again,” he says. “The biggest
exploration in Indigenous Reserves
frustration is permitting taking too long.
supported by law, has never been
Added environmental restrictions make
implemented,” he explains. Hill argues
it difficult to raise money in the junior
that regulating the informal mining sector,
sector based on this uncertainty.”
resolving the copper reserve issue
Brazil plans to auction off 20,000
and removing the backlog of tenement
areas for mining exploration during
applications and reports awaiting
the first half of 2019, representing a
decisions by utilising a transparent w w w.mi ni nggl o b a l. com
L E A D E R S H I P & S T R AT E G Y
FACT BOX
The rush for copper is on
44
Brazil is seeing a major tenement staking rush in the states of Mato Grosso and Para on the back of a rumoured significant Porphyry Copper discovery in the Juruena Magmatic Arc in northern Mato Grosso by privately owned junior explorer Bio Gold in JV with Anglo American. This has attracted the majors Nexa (also developing a base metals deposit in the region), Codelco, Freeport, and Rio Tinto and should be good news for the few remaining juniors who have managed to hold ground in the emerging Juruena Tapajos Belt — namely Alta Mira, Cabral, Serabi, TriStar, BBX, Crusader and PA Gold.
and agile process is vital to ensure benefits to the sector. “It’s the state-run environmental agencies which need to talk to the federal ANM,” he warns. “There’s little interaction. Historically that’s brought the industry to a halt and reflects poorly on the previous government which lacked focus on stimulating job growth by attracting investment.”
APRIL 2019
45
While Brazil’s environmental
people about mining’s positives, such
regulations are in line with global
as job creation. “Done properly with
norms, the key is communication and
the right checks and balances mining
stakeholder engagement. Hill notes
is actually very low impact relative to
that taking up to two years to get a
say, agriculture which is a major area
license for a drill hole is what’s “killing
of environmental focus. The mining
the industry” in Brazil. However, to
industry has to demonstrate it is
achieve a sustainable mining sector,
not going to destroy the Amazon, but
he maintains there are no shortcuts
will help sustain it while delivering
and the real challenge is educating
products the world needs.” w w w.mi ni nggl o b a l. com
L E A D E R S H I P & S T R AT E G Y
46
After the tragedies of the tailings dam failures at Samarco and Brumadin-
stacking of tailings solutions.” How would Hill assess the sustain-
ho, the education of stakeholders and
ability efforts of the industry in Brazil?
the general public will need to increase
“It´s not well communicated that the
warns Hill: “There is a general percep-
mining industry has been making huge
tion the problem is not mining, but the
strides in this area globally. For example,
tailings dams built using the upstream
any new project will have to be a first
lift methodology. The ANM is acting
world one in terms of compliance...
quickly and issuing new regulations to
You can’t start a new mining project
forbid the permitting of new upstream
without a good mine closure plan. In
lift tailings dams. However, public
Brazil, Jaguar Mining invests heavily in
opinion in general, and the Brazilian
community projects in areas impacted
industry itself, are already supporting
by its mines and has won the social
the move to utilising modern dry
license to operate – these initiatives
APRIL 2019
are now well ingrained into the way any company works in the sector, but Brazil needs to catch up with the rest of the world in terms of how it manages sustainability processes.” Catching up is also key for the sector to continue its digital transformation; necessary for the industry to remain competitive through the integration of new technologies. “We’re seeing interventions in the safety field through remote controlled mining equipment along with cloud-based data management, directional drilling and dronebased change management and
“ The mining industry has to demonstrate it is not going to destroy the Amazon, but will help sustain it” — Jon Hill, Vice President, Geology & Exploration, Jaguar Mining
monitoring,” says Hill who notes Nexa is constructing a new $350mn zinc project in Aripuanã which will be largely automated. In addition, Hill sees internetbased tenement staking as an opportunity for the ANM to raise efficiency and accelerate the industry. Hill also highlights significant outsourcing of professional level skills as a means of reducing costs amid a returning sense of optimism in Brazil driven by a potential copper boom in the north and, since the election, renewed interest from foreign companies looking for exploration and w w w.mi ni nggl o b a l. com
47
L E A D E R S H I P & S T R AT E G Y
investment opportunities. The revolution in skillsets needed by the sector will be driven by the majors betting on demand from the electric vehicle (EV) industry for battery metals to drive its fortunes. “The current flavour of the month is copper,” says Hill. “But I see nickel, cobalt, graphite, lithium, vanadium, manganese, tin and REE´s as all being coveted by the technology sector in general.” As a result of its complex political and social history, allied to geographical 48
challenges, Brazil is largely un-explored by global standards. Less than 20% of its area is geologically mapped in real detail (better than 1:250k scale) and as such many discoveries of large footprint bulk commodities, like the metals Hill mentions, have been recently found very close to infrastructure – Horizonte Minerals’ Araguaia Nickel Laterite Project is a good example of this. “This also highlights the potential to find major new deposits of the commodities that generally have smaller footprints such as gold, platinum and palladium” adds Hill. Advances in remote sensing and airborne geophysics will allow serious explorers to fast track target generaAPRIL 2019
“ If the National Mining Agency can demonstrate it is serious about attracting investment then I am quietly confident” — Jon Hill, Vice President, Geology & Exploration, Jaguar Mining
tion and start placing geologists in the field. Hence the timeline to discovery may well improve on the back of a more agile ANM. All of which leaves Hill positive about the sector’s future in Brazil. “I believe momentum is increasing in exploration on the back of a new government voted in for change and the rising gold price. The industry has had many false starts but is now better positioned, so if the National Mining Agency can demonstrate it is serious about attracting investment, as seen at the last edition of PDAC, then I am quietly confident. The sector needs to be balanced – more junior´s and mid-tiers are required to actively funnel sustainable quality projects through the value chain. If the increasing quantity of expressions of interest in exploration and mining in Brazil being received at my company Exploration Outcomes are any indication of where the sector is heading in 2019, then I am very optimistic looking forward.”
w w w.mi ni nggl o b a l. com
49
S U S TA I N A B I L I T Y & C S R
50
THE TECH METALS REVOLUTION Mining Global brings you the lowdown on the latest trends in the battery metals market from TechMet CEO Brian Menell, who offers his predictions for the future production of tech commodities WRITTEN BY
APRIL 2019
DAN BRIGHT MORE
51
w w w.mi ni nggl o b a l. com
S U S TA I N A B I L I T Y & C S R
52
W
e are currently experiencing
since the impact of the Industrial
an epic supply/demand
Revolution, when the demand for coal
dislocation between
and iron ore skyrocketed. It represents
exponential growth, and demand for
an unprecedented value creation
lithium-ion batteries for electric
opportunity as the global adoption of
vehicles and renewable energy
new technologies ramps.
systems, coupled with a lack of
Menell notes that China has led the
efficient scalability of the sources of
way, executing a 15-year program to
supply for key ingredients.� The verdict
secure control and dominant positions
on the state of the market for battery
in the pipeline of supply of the key
metals, from TechMet CEO Brian
strategic metals. “It now commands
Menell, hits home when he likens the
over 90% of global rare earth supply;
current impasse to a scale not seen
around 65% of global cobalt supply;
APRIL 2019
53
nearly 80% of processing capacity
come with China’s dominance. The
in cobalt intermediate products; in
likes of Tesla and Panasonic increas-
excess of 50% of global lithium supply
ingly look to China for raw materials,
and processing; 70% of tungsten and
heightening what Menell calls “an
75% of natural graphite.” It’s the
enormous sense of vulnerability”
backdrop of this geopolitical context
driving the escalation of global
which has triggered the proliferation of
trade disputes.
companies like TechMet investing in
Menell highlights the extent to which
the pipeline of supplies and materials.
companies in the tech metals space
It’s fast becoming a high priority,
can add value by having high environ-
particularly in Washington and Tokyo,
mental and social impact governance
where it’s recognised there are
standards and capacity goals. “Prod-
national security implications that
ucts go through a value pipeline to w w w.mi ni nggl o b a l. com
S U S TA I N A B I L I T Y & C S R
“ The scale of lithium ion battery manufacturing capacity growth is unstoppable” 54
— Brian Menell, CEO, TechMet
APRIL 2019
consumer goods, which are increasingly scrutinised and potentially disrupted as a result of speculation of the ethics of origin of materials,” he explains. “We can add value to our products by being highly sustainable and ethically governed, maintaining stronger positions in a country by operating in a responsible manner.” In order for the supply of key metals not to be a massive constraint on the scale of adoption of new systems globally, a lot more money needs to be spent on developing new resources and processing capacity stresses
CLICK TO WATCH : ‘LI-CYCLE™ – ADVANCED RECYCLING FOR LITHIUM-ION BATTERIES’ 55 Menell. “The majors, with the exception
will struggle to develop the scale and
of Glencore and its strong cobalt
supply the market demands.
position in the Congo, are exclusively
“The US and Japanese governments
looking at lithium. The problem with
need to do more to support and
rare earth, tungsten, tin, vanadium…
finance these initiatives in order to
you can’t deploy a billion dollars so it’s
create supply and counter Chinese
never going to move the dial for the
dominance,” advises Menell, who
likes of Rio Tinto and Anglo. They have
argues that the data and analysis,
ignored these minor metals because
combined with the efforts of emerging
they can’t achieve scale – even though
players like TechMet, now exists to
they will become increasingly vital and
help educate government agencies
much more lucrative.” He comments
and secure their support. The mining
that development of the minor metals
industry will benefit further from
arena currently rests with poorly
greater collaboration between the
funded junior to mid-tier players who
battery makers and the manufacturers w w w.mi ni nggl o b a l. com
S U S TA I N A B I L I T Y & C S R
who need their products. The EV
cell manufacturers, who buy from
industry is realising scalability is
cathode manufacturers… They’re many
dependent on reliable sources of
steps removed in the pipeline between
supply and is waking up to the threat of
the end system integrator and the
massive constraints in the future.
component manufacturers. But they
What are Menell’s predictions for
will have to engage. Battery and vehicle
how this challenge can be overcome in
manufacturers will start to invest in
a tough seller’s market where even the
mining and processing, and secure
likes of VW have struggled to secure
long-term offtake and rights to product
deals? “The problem for giants such
on behalf of their component
as General Motors and BMW is that
manufacturers, in order to develop
they don’t buy cobalt carbonate,” he
secure supply.”
explains. “They buy systems from
Menell estimates that current
battery manufacturers, who buy from
projections for EV cells would require
56 FACT BOX
About TechMet TechMet’s vision is to create a technology metals champion with strategic control over significant production of the key metals that will define and power the 21st century global economy. Focused on lithium, cobalt, rare earth metals, tin, tungsten, vanadium and battery nickel, the company plans to raise a further $80m to exercise the options and rights in its
APRIL 2019
portfolio to build dominant positions in world-class scalable projects that produce, process and recycle e-metals. TechMet’s current portfolio includes Rainbow Rare Earths in Burundi, Brazilian Nickel, Tinco (Rwanda’s largest tin and tungsten producer) and Li-Cycle — a worldleading Li-ion battery recycling techno-logy capable of recovering 90% of cobalt, nickel, lithium and copper.
“ On-grid and off-grid battery storage to facilitate the next phase of renewable energy will grow sharply in the coming years”
57
— Brian Menell, CEO, TechMet
w w w.mi ni nggl o b a l. com
S U S TA I N A B I L I T Y & C S R
a tripling of global cobalt production by 2030. Despite the supply chain issues to be resolved he believes this forecast is conservative. “There are less than four million electric cars in use today, forecast to hit 140 million in ten years – but that will be massively exceeded. As you reach the tipping point of electric vehicles becoming cheaper, the life cycle of the vehicle relative to internal combustion engine vehicles, could mean, all other factors being willing, we could see 300 million electric vehicles in the world. Even with 58
prices of key ingredients going up, unit prices for lithium ion batteries will still go down as we benefit from economies of scale, and manufacturer technology and design, so they’ll become more and more competitive. The scale of lithium-ion battery manufacturing capacity growth is unstoppable with over $50bn of committed capital in the next three years to building new manufacturing facilities, of which probably two-thirds are in China, a third in the rest of the world. Allied to that, the scale of commitment on the part of global automakers to electrifying their fleet, in terms of capital commitment, R&D, APRIL 2019
product development, production capacity development, is over $300bn in the next 10 years.” At a time of global transformation what other trends across the mining panorama will companies like TechMet need to respond to? “On-grid and off-grid battery storage to facilitate the next phase of renewable energy will grow sharply in the coming years,” predicts Menell, noting lithium-ion batteries are likely to be replaced by vanadium redox flow batteries and other alternative systems, creating another demand driver for metals companies like TechMet who mine, process and recycle. “Renewable energy systems themselves, such as wind turbines, will also drive demand for polar magnets and electric motors across those systems,” he adds. “Meanwhile, automation and robotics will boost demand for a number of minor and particularly rare earth metals as disruptive and globally transformative technological evolutions gather pace.” Before we scale the heights of massive value creation in meeting EV industry targets for 2030, what are Menell’s predictions for market growth w w w.mi ni nggl o b a l. com
59
S U S TA I N A B I L I T Y & C S R
60
“ Renewable energy systems themselves, such as wind turbines,will also drive demand for polar magnets and electric motors across those systems” — Brian Menell, CEO, TechMet
APRIL 2019
over the next 12 months? “I expect volatility following a recent speculative boom with respect to perceptions of value in cobalt and lithium, which went way beyond the short-term market realities, and therefore corrected way below the existing market realities, so at the moment some key ingredients like cobalt and lithium are much cheaper than they should be.” Menell believes this type of overshooting in one direction and then overcorrecting in the other will continue, particularly in such a rapidly evolving environment from a supply/demand point of view. He concludes: “Right now, most of these commodities are, in my view, ridiculously cheap relative to where they should be and where they will be in the next two, five, ten years, and that’s good for companies like ours, engaging lithium projects and buying assets. Sooner or later the values of these commodities will rebound and there will be further volatility. Overall the opportunity is still compelling in terms of the short supply and exponential growth in demand of tech metals.”
w w w.mi ni nggl o b a l. com
61
TECHNOLOGY
62
Immersive virtual mining tours in the palm of your hand MINING GLOBAL SPEAKS WITH STEPHEN DE JONG, FOUNDER & CEO AT VRIFY, TO DISCOVER HOW THE MINING SECTOR CAN UP ITS PRESENTATION GAME IN THE BID FOR INVESTMENT THROUGH INNOVATIVE TECHNOLOGIES WRITTEN BY
APRIL 2019
DAN BRIGHT MORE
63
w w w.mi ni nggl o b a l. com
TECHNOLOGY
V
Rify aims to simplify the headache of site visits by offering virtual mining tours from the comfort of your desktop or tablet. The
genesis of the company was born from the needs of the mining professional. Stephen de Jong, Founder & CEO at VRify, recalls the eureka moment:
“My experience with the industry is on the mining side. From 2012 to 2017 as the CEO of Integra Gold we embraced technology innovation in everything we did, culminating in a global million-dollar crowd sourcing competition, the Integra Gold Rush Challenge. We then started the Disrupt Mining event with Gold Corp which was a call for tech64
nologies that could impact the mining sector. In the last six months before Integra Gold was acquired, we used virtual tours to showcase our project to the world.” De Jong recalls a simple approach incorporating panoramic 360-degree shots of Integra’s site via an iPad-driven PowerPoint presentation. “We realised we were spending 80% of our time at meetings walking through our site,” he says, noting the traditional page flip through a corporate deck didn’t meet their needs. “We learned the way we present and share information isn’t sufficient for the stories we’re trying to tell within the mining sector, so APRIL 2019
“ W E’RE NOT A BUNCH OF TECH GUYS TRYING TO FIND APPLICATIONS FOR OUR FANCY TECHNOLOGY” — Stephen De Jong, Founder & CEO, VRify
65
we started incorporating various presentation slides to offer information points as you went through our tour and ditched the conventional approach.” The whole concept of VRify is built on industry experience maintains de Jong who is keen to stress “we’re not a bunch of tech guys trying to find applications for our fancy technology. We’re very much mining people whose experience from the industry side has identified a problem we believe some quite simple technology can fix.” It’s a technology which utilises elements w w w.mi ni nggl o b a l. com
TECHNOLOGY
of virtual reality, 3D modelling and
presentation. The idea is that if you have
3D visualisation crafted by in house
better information you’ll make better
developers.
decisions. I truly believe once we give
De Jong has been startled by the industry response to VRify, revealing
a taste of this level of disclosure it’s going
they can’t produce the virtual tours fast
to be very hard to go back to your two-
enough. With 60 completed, and many
dimensional deck and feel justified in
more in production, VRify is aiming to
your investment decisions, based on
create a standard everybody can use
drill results accompanied by a limited
across the industry, from exploration
amount of information.”
to investment. De Jong believes the
66
investors and other stakeholders
As Chairman of Integra Resources
benefits are obvious: “If you’re chasing
(created after the sale of Integra Gold
investment and trying to explain the
in 2017), de Jong himself uses VRify
orientation of the deposit or where the
and tests new features. He points out
underground workings are in relation
that whenever the company issues drill
to the deposit, the best way to do that
results, it updates the interactive 3D
right now is to take screenshots of
model which provides a historical drill
a 3D model. What we do is incorporate
database from the project and all of the
interactive models and photography
drill holes in that area. De Jong explains
and other components right into that
the practicality of this approach: “We
APRIL 2019
CLICK TO WATCH : ‘VRIFY SCHOOL OF MINING PROMOTION: LESSON 1’ 67 recently put out a drill hole that was
a user component to it. If we create
a 260m step out from the closest hole
an ecosystem where you have mining
and it was over 100m, but it’s not until
companies and users – primarily
you see it in 3D and you can see legiti-
investors but also community stake-
mately there isn’t a single historic hole
holders, environmental groups,
within 500m that you understand we
regulators etc – then your business,
truly are into a new area.”
be it a consulting group or investment
VRify can drive partnerships across
bank, can interact with the industry to
the sector believes de Jong, who asserts
find a verified partnership within that
what the company are doing is essentially
ecosystem. We’re supremely focused
building a platform to house what could
on primarily building that ecosystem.
be the largest database of information
The first step to doing that is getting
that’s ever been compiled in the mining
as many companies adopting the
sector. “Our platform is not just driven
platform as possible.”
by the companies on it, there’s also
What trends is de Jong seeing across w w w.mi ni nggl o b a l. com
TECHNOLOGY
“IF WE CREATE AN ECOSYSTEM WHERE YOU HAVE MINING COMPANIES AND USERS, YOUR BUSINESS CAN INTERACT WITH THE INDUSTRY TO FIND A VERIFIED PARTNERSHIP WITHIN THAT ECOSYSTEM” — Stephen De Jong, Founder & CEO, VRify
68
stakeholders to hold companies to what they promise and how they run their businesses. As technologies like VRify advance the industry will benefit.” De Jong is enthused by the industry response to Verify… “We’ve done more the mining panorama that could
than 10 projects with Gold Corp and
provide an opportunity for VRify? “It’s
are also working with Kirkland Lake on
transparency and accountability that
all five of its assets. At a recent investor
prompt investors to look at the junior
day, they used VRify for a four-hour
mining space. It’s not the Wild West but
presentation going through the entire
there are definitely improvements to be
company in an interactive setting.”
made. We don’t need more regulation,
He adds that in the background, VRify
just better tools for investors and
is partnering with the likes of gold
APRIL 2019
69
royalty company Sandstorm, Wheaton
industry as a whole by incentivising
Precious Metals and some of the more
companies to make more effort with
exciting top performing juniors such as
everything from exploration budget
SilverCrest while working on projects
ratios to community relations.
across the globe from Australia to
De Jong reveals the goal for VRify in
Africa. All of this underpins work with
2019 will be to have 250 clients by year
oil and gas companies and plans to
end before targeting upwards of 1,000
expand with renewable energy clients.
by the close of 2020. Allied to this,
Mining needs an Uber moment
VRify aims to improve the experience
maintains de Jong, who argues there
beyond the company/client side to
is too little accountability in the sector.
focus on the user/investor/stakeholder
He feels VRify is poised to deliver an
and deliver a specific curated linear
ecosystem that will give investors more
tour. “We describe this experience more
confidence and ultimately benefit the
like a hop on hop off bus tour where w w w.mi ni nggl o b a l. com
TECHNOLOGY
“ W E DON’T NEED MORE REGULATION, JUST BETTER TOOLS FOR STAKEHOLDERS TO HOLD COMPANIES TO WHAT THEY PROMISE” — Stephen De Jong, Founder & CEO, VRify
70
APRIL 2019
you’re taken down a certain route but at any time you can jump off and interact with all of the information by yourself,” he explains. The next big step for VRify will be to build on the structure of independent site visits of a company’s assets affirms de Jong: “The ‘VRified Deck’ will take all those assets into an interactive presentation making it easier for companies to present to this platform. All of their projects and company information via financial statements, management team and press releases within one setting.” De Jong reckons he’s delivered thousands of presentations over the years to analysts, boards, community groups and investors. “I learned a lot about what works and what doesn’t. VRify is the result of that experience an offers a great opportunity to do a much better job communicating the value proposition of the mining industry.”
w w w.mi ni nggl o b a l. com
71
O P E R AT I O N A L E X C E L L E N C E
CHAMBER OF MINES:
72
SPEARHEADING ZAMBIA’S MINING REVOLUTION The President of Zambia’s Chamber of Mines, Goodwell Mateyo, tells Mining Global why it’s vital his country’s government deliver concessions on tax increases to boost investment in the sector, in order to diversify and allow the industry to realise the bounty of Central Africa’s Copperbelt WRITTEN BY
APRIL 2019
DAN BRIGHT MORE
73
w w w.mi ni nggl o b a l. com
O P E R AT I O N A L E X C E L L E N C E
Z
ambia has a breath-taking endowment of minerals, from minor metals, gemstones and uranium to industrial
minerals.” That is the glowing assessment of
Zambia’s mining panorama from the President of the country’s Chamber of Mines, Goodwell Mateyo. However, he concedes the sector has largely been dominated by copper production with its fortunes tied up in the trends of ownership. “The sector was in the hands of private capital up until 1969 when a decision was made to nationalise,” recalls Mateyo. “Subse74
quent to that we saw copper production fall from a high of close to 800,000 tonnes prior to nationalisation to a low of 280,000 tonnes of copper produced per annum before privatisation returned in 2000. Since then mines have come back into private hands and this production has seen an uptick thanks to significant foreign investment – our estimate is for total copper production to have reached 820,000 tonnes at the end of 2018. However, there has been little diversification into other minerals.” It’s that need to diversify, coupled with what many miners see as crippling tax increases, which Mateyo believes is holding back the sector in Zambia from realising the full potential of Central Africa’s Copperbelt. New APRIL 2019
“ Zambia is one of the most expensive mining investment destinations from a fiscal regulatory point of view. Our hope is to resolve this impasse” — Goodwell Mateyo, President, Zambia Chamer of Mines
75
w w w.mi ni nggl o b a l. com
O P E R AT I O N A L E X C E L L E N C E
76
to his role as President, what are
regulatory changes. “I am quite optimistic
Mateyo’s hopes for his tenure at the
that once we get more stability people
Chamber? “We are keen to engage
will buy-in to the benefit of mining to
with government and hopefully
our population,” he adds, suggesting
negotiate a far more acceptable mining
this would help create the environment
tax regime. Currently Zambia is one of
for increased investment, alongside
the most expensive mining investment
the National Development Fund, not
destinations from a fiscal regulatory
only in copper but gemstones and other
point of view. Our immediate hope is to
minerals such as manganese.
resolve this impasse…” He believes it’s vital to improve the
Mateyo hopes that a compromise can be reached that delivers a mining
perception of mining in Zambia as he
fiscal regime as attractive to investors
notes the current negative impression
as other countries. Stability is key, as
has informed some of the more adverse
he notes that even though exploration
APRIL 2019
CLICK TO WATCH : ‘LEARNING FROM CONGO’S MINING POLICIES’ 77
activities often return promising results,
he is proud of the work of Chamber
the fact that the tax regime has
members discovering high grade
changed five times in the past decade
deposits across the Copperbelt in
has contributed towards negativity in
sync with the mission of the Chamber:
the sector. “We are also in the process
“Advancing the interests of its mem-
of trying to come up with cost reflective
bers, local communities, the country
electricity pricing for the mining industry
and its stakeholders whilst promoting
to further bolster its sustainability,”
sustainable and responsible mining.”
he adds. Allied to these challenges,
Mateyo explains: “The Mopani Copper
Mateyo stresses that Zambia’s mineral
Mines project has achieved distinct
endowment comes with a high cost of
multiple deep shafts in Kitwe and
ore extraction – another reason why
Mufulira, some reach levels of 2km. At
investment is vital.
Mopani, we have also consolidated the
Despite the hurdles to overcome,
former Munali Nickel Project – which w w w.mi ni nggl o b a l. com
O P E R AT I O N A L E X C E L L E N C E
78
C OMPANY INFO
The Zambia Chamber of Mines (ZCM) is registered as an association for mining and allied companies both large and small. The Chamber is governed by a constitution while the policy making body is the Council drawn from member companies. Membership to the Chamber is voluntary and is classified into four categories — Class A, Class B, Class C and Associate. These are based on the type of mining licence that
APRIL 2019
a particular mine holds: large, small, exploration, service provision etc. Originally formed in September 1942, ZCM was formerly known as the Northern Rhodesia Chamber of Mines of Zambia until it was replaced by the Copper Industry Services Buereau (CISB) in 1965. Following privatisation of the mine assets in 2000, the Zambia Chamber of mines was re-established.
“ I am passionate about the gemstone and manganese industry because of the significantly higher indigenous participation in those industries” — Goodwell Mateyo, President, Zambia Chamer of Mines
will become a poly metallic operation
members. “Barrick and First Quantum
producing palladium, nickel, cobalt
operated mines have moved into open
and copper concentrates – now
mining at a previously unprecedented
known as the Mabiza Nickel Mine.
scale using very exact GPS-driven
From a technological point of view
science,” he says. “There have also
these three projects have overcome
been significant advances around
significant obstacles thanks to the
safety nationwide in nearly all of the
extent of the capital transaction that
operations we see. For instance, the
has been made.”
remote use of heavy equipment has
Elsewhere, Mateyo notes the likes of Mopani and Lubambe Copper Mines
benefits previously unthought of.” Beyond the need for regulatory
are catching up with the technological
change, Mateyo says the next challenge
innovations with heavy machinery in
from a sustainability standpoint is to
mines operated by more established
increase the industry’s investment in w w w.mi ni nggl o b a l. com
79
O P E R AT I O N A L E X C E L L E N C E
the communities in which it operates. “Not so much from a CSR point of view,” he stresses. “But improving and increasing linkages with local industry to enhance the perception of mining operations within the communities.” Highlighting the fact that around 57% of the world’s cobalt resource is located between Zambia and the DRC, Mateyo argues the region is well placed to boom from the increasing need for battery metals driven by the EV revolution. However, while the copper industry is strategically poised to benefit, he concedes much more investment is required into existing operations and 80
assets to allow cobalt production to finally tune into global demand. Mateyo originally trained as a lawyer and finds that his analytical approach to problem solving has helped him in his role as President of Zambia’s Chamber of Mines: “My experience in the British legal system has helped in dealing with regulatory and government agencies, especially when it drives towards the marshalling of resources, as some of those discussions can be difficult and challenging.” What are his predictions for the next 12 months and beyond? “Once we address the tax impasse with the government, we are going to see an exponential rise in the production of APRIL 2019
81
both copper and cobalt,� concludes Mateyo. “I am particularly passionate about the gemstone and manganese industry because of the significantly higher indigenous participation in those industries and therefore in those two sectors we will need to work very closely with government to increase the local levels of inclusion in mining to build the industry this country needs to secure its future.�
w w w.mi ni nggl o b a l. com
3rd Liberian Mining, energy & PetroLeuM ConferenCe & exhibition
15 - 16 May 2019 Monrovia City haLL rePubLiC of Liberia
SILVER SponSoR
BRonzE SponSoR
oRganISEd By
“InvestIng In LIberIa’s mIneraL and energy resources to stImuLate natIonaL economIc growth” @aMetrade_Mining | #LiMeP www.aMetrade.org/LiMeP
ThE LoNgEsT govErNmENT sUpporTEd miNiNg & ENErgy EvENT iN Zambia
9
Zambia iNTErNaTioNaL miNiNg aNd ENErgy CoNFErENCE & EXhibiTioN
Th
13-14 JUNE 2019
radissoN bLU hoTEL, LUsaKa, Zambia
BRONZE SPONSORS
ASSOCIATE SPONSOR
SuPPORTED BY
STRATEGIC PARTNER
ORGANISED BY
rEgisTEr Today at www.ametrade.org/zimeczambia @zimec_zambia #ZimEC
T O P 10
84
Trends transforming the future of mining Mining Global looks at the annual Tracking the Trends report from Deloitte, analysing the innovations and thinking transforming the future of mining in 2019 WRITTEN BY
APRIL 2019
DAN BRIGHTMORE
85
w w w.mi ni nggl o b a l. com
T O P 10
86
10
Demanding provenance
Electric Vehicles (EVs) and battery minerals have piqued desire for provenance amid increasing demand for battery materials such as cobalt, lithium, graphite, and copper. With provenance of raw materials under scrutiny, downstream customers, such as automotive manufacturers and technology giants, are demanding ethically-sourced minerals. Mining companies are under pressure to create a more transparent customer interface and adopt technologies such as blockchain to enhance the traceability of commodities. Ian Sanders, Mining & Metals Leader Deloitte Australia, advises: “Mining companies that can respond rapidly may see a first mover advantage that allows them to earn a premium on their products.�
APRIL 2019
87
09
Operationalising diversity & inclusion programs
The mining industry is struggling to put theory into practice to attract sufficient numbers of diverse candidates. Companies will need to change talent attraction and retention policies to transform historical perceptions of the mining industry. They must design integrated programs to tackle the challenge holistically. In tandem with shifting the way they operate mining companies must take steps to amend their public image. “Diversity and inclusion is a problem,” warns Karla Velásquez, Mining & Metals Leader, Deloitte Peru. “Mining companies need to go beyond training and change management, and explore the operationalisation of more flexible programs, especially on mine sites.”
w w w.mi ni nggl o b a l. com
T O P 10
88
08
Re-imagining work, workers & the workplace
Deloitte recommends mining companies focus on a blueprint for the future of their businesses. The mining industry faces a changing talent landscape, with digitisation necessitating new skillsets and a generational shift in C-suite succession planning. In preparation, organisations need to clarify business goals and aspirations alongside the role their talent strategy plays in delivering them. Identifying the workers of the future, their employee experience and the role innovation plays will be key. They must reconceive how employees will interact with each other and conduct their work, be it in a physical location or remotely.
APRIL 2019
89
07
Decoding capital projects
Tim Biggs, EMEA Mining & Metals Leader, Deloitte UK, notes: “As capital projects pick up, mining companies will need to avoid the mistakes of the past by rethinking delivery models, adopting appropriate governance processes, and ensuring they have the skills in place to manage performance across the entire project lifecycle.� Mining companies must engage in new capital projects to off-set production declines and meet demands for commodities such as copper, zinc, cobalt and lithium. They must embrace analysis, become digital and learn from other sectors to enhance their own model.
w w w.mi ni nggl o b a l. com
T O P 10
90
06
Exploring the water– energy nexus
“With a constant knowledge of how every drop of water is being used, and an understanding of all the parameters associated with its use, mining companies can manage water in the way they have electricity, as a valuable resource.� Patricia Muricy, Mining & Metals Leader Deloitte Brazil, makes the case for a systematic approach. True value from energy management can only be derived by addressing the triple bottom line of social, environmental, and financial performance. This requires companies to approach energy management as an integrated corporate initiative.
APRIL 2019
91
05
Driving sustainable shared social outcomes
Deloitte warn finding value beyond compliance is no easy task. It requires miners to listen more closely to their constituents to determine what stakeholders truly want, and then shift their operational processes in response. Andrew Lane, Mining & Metals Leader, Deloitte Africa, urges: “By taking the time to understand local community concerns and social objectives, mining companies have a unique opportunity to devise uncommon solutions to intransigent problems. This positions them to form true collaborative partnerships, change negative perceptions about the industry, avert social conflict, and play a more proactive role in helping local governments deliver on their developmental outcomes.�
w w w.mi ni nggl o b a l. com
T O P 10
92
04
Digitising the supply chain
Mining companies’ supply chains need to become more interconnected and responsive by embracing a circular system Deloitte calls the digital supply network (DSN). The ultimate goal is to leverage advanced algorithms, AI, and machine learning to turn data into insights allowing companies to reduce costs, respond quicker to change, and optimise mine planning to integrate real-time changes. Kevin Xu, Mining & Metals Leader, Deloitte China, says: “Organisations that crack the code around fully interlinking their supply chains can do more than break down operational silos. They can gain the end-to-end visibility they need to enhance their asset utilisation, operational efficiency, and productivity – realising hard dollar savings.”
APRIL 2019
93
03
Managing risk in the digital era
Sandeep Verma, Global Mining & Metals Risk Advisory Leader, Deloitte US, comments: “Traditional assurances around risk are no longer effective, boards, investors, and communities expect mining companies to have a forward-looking view on risk‌ Companies should revisit their approach to risk management ensuring all lines of defence are empowered to manage risk on their behalf.â€? To stem the tide of issues such as mounting tariffs and sanctions; potential trade wars; cyber threats; uncertain fiscal regimes; rising costs; heightened scrutiny from investors; environmental disasters, and infrastructure breakdowns, mining companies must take a more holistic view with the Internal Audit 3.0 approach.
w w w.mi ni nggl o b a l. com
T O P 10
02
Analytics & artificial intelligence Three horizons in AI are emerging… Horizon 1 (where most companies reside), is where machine intelligence requires human
94
assistance and interpretation. To move up the analytics maturity curve into Horizons 2 and 3, Deloitte stress organisations must answer progressively complex questions. The first is “what happened?” The second is “why did those things happen?”, this allows organisations to identify the root causes. Only with this foundation in place can they answer the third question, “what will happen?” This is the key that can empower them to predict variability, mitigate emerging risks, and manage stakeholder expectations.
APRIL 2019
95
w w w.mi ni nggl o b a l. com
T O P 10
01
Rethinking mining strategy
CSR initiatives are morphing into stakeholder engagement programs, while social license to operate becomes a pivotal strategic issue alongside consumer awareness, geographic risk, and access to input commodities. 96
Mining companies must take a wide view to set corporate strategy and create competitive portfolios capable of generating value across multiple scenarios – critical as the industry embraces a new stage of growth. Andrew Swart, Global Mining & Metals Consulting Leader, Deloitte Canada, concludes: “When done well, strategic planning cycles consider a range of issues in addition to producing at lowest cost, including the role of individual assets in the portfolio, the path to value creation, the balance between risk and return… These key choices should ultimately drive a mining company’s investment allocation strategy, the partnerships it creates, and the capabilities it decides to build.”
APRIL 2019
“Key choices should ultimately drive a mining company’s investment allocation strategy, the partnerships it creates, and the capabilities it decides to build” — Andrew Swart, Global Mining & Metals Consulting Leader, Deloitte Canada
w w w.mi ni nggl o b a l. com
97
EVENTS & A S S O C I AT I O N S
The biggest industry events and conferences WRITTEN BY DAN BRIGHTMORE from around the world
17–19 APRIL 2019
Marrakesh Mining Convention
98
23–25 APRIL 2019
Mining World Russia 2019 [ MOSCOW, RUSSIA ]
[ MARRAKESH, MORROCCO ]
Mining World Russia is the most repre-
The vision and concept behind the
sentative international exhibition of
Marrakesh Mining Convention (also
machines and equipment for the mining
known as MMC) is to create a truly
and processing industry in Russia in
global platform by bringing together
terms of the composition of participants
the mining ministries, geological
and visitors. Organised by the ITE Group,
research authorities & surveys, interna-
it provides an efficient business platform
tional mining & quarrying companies,
for communication between manufac-
service & technology providers, mining
turers and suppliers and experts in
think-tanks and the consulting organi-
mining facilities, mining and refining
sations under one roof to discuss and
plants as well as wholesale trading
explore opportunities on a truly inter-
companies from across Russia’s industry.
national scale. At this year’s inaugural
Heralded as the ‘Best Exhibition in
event highlights will include: training
Russia’ it will feature seminars on how
masterclasses; country mining invest-
to become a mining supplier of choice,
ment sessions; a mining CEO’s forum;
to conferences on IT and automation,
B2B meetings and an international
mineral deposit exploration technologies
mining ministers summit.
and future trends.
APRIL 2019
99
30 APRIL–2 MAY
Mines and Money New York [ NEW YORK, USA ] As commodities prices continue to rise,
equity, trading houses, hedge funds
many generalist investors are returning
and family offices – connecting miners
to the mining sector. Now in its third
with money and investors with
year, Mines and Money New York
opportunity. Prominent investment
draws on the presence of natural
management firms involved include:
resource specialists based in the city
Tocqueville Asset Management,
and the surrounding East Coast. It
Paulson, Dynamic Funds, Sprott Asset
brings together investors with over $1.8
Management, Denham Capital, Pacific
trillion in assets under management
Road, Tembo Capital and Resource
from equity fund managers, private
Capital Funds.
w w w.mi ni nggl o b a l. com
EVENTS & A S S O C I AT I O N S
20–21 MAY 2019
Energy 2019 Conference
100
21–22 MAY 2019
[ MIAMI, USA ]
Mining Investment Botswana
Energy 2019 Conference gathers
[ GABORONE, BOTSWANA ]
global leaders in the energy field to
Mining Investment Botswana is a stra-
share their research at this exclusive
tegic mining conference and exhibition
scientific program. The conference
for the leaders of the mining, quarrying
throws light on thought-provoking
and construction materials industries;
topics, including: recent research in
bringing together 150 attendees from
the field of renewable energy; green
15 countries. Ministers, mining compa-
energy and economy; advanced mate-
nies, investors and service providers
rials for energy storage; generation
travel from across the globe for two days
and transmission; hybrid renewable
of partnering, networking and business
energy approaches; biofuels & bio-
matching. Reflecting the need to sup-
energy; sustainable nuclear energy;
port the industry throughout the entire
solar and wind energy; hydropower
mining life cycle – from exploration,
generation; marine – tidal and wave
production to closure and post-mining
energy; smart grid systems, and
land use – Mining Investment Botswana
much more. Expect an exciting and
will highlight the latest technological
informative conference program
advances, research and future solutions
including plenary lectures, symposia
set to transform the industry.
and workshops.
APRIL 2019
28–29 MAY 2019
13–14 JUNE 2019
Mining Investment West Africa
ZIMEC 2019
[ ACCRA, GHANA ]
The 9th Zambia International Mining
Delivering the highest-level audience
and Energy Conference & Exhibition
in the region, Mining Investment West
(ZIMEC 2019) is organised by AME
Africa brings together key buyers and
Trade Ltd, UK with the support of
industry leaders under one roof. Learn
The Zambian Ministries of Mines and
new perspectives on key issues dis-
Energy and Zambia Chamber of Mines.
rupting the mining sector and share
Building on nearly a decade’s worth of
cutting edge content and insights on the
experience connecting senior mining
mining landscape. Mining technology
and energy executives with Zambian
firms, equipment and service compa-
policy makers, ZIMEC continues to
nies, miners and governments take
play an integral part in shaping a sus-
this opportunity to expand connections,
tainable growth path for Zambia
launch new products and forge new
mining and energy sectors. The event
business partnerships. The Mining Tech
provides a unique opportunity for busi-
strand will highlight: the use of drone
nesses to network and showcase to
technology for effective mine surveil-
key stakeholders. Highlights include
lance; robots to explore underground
a spotlight on Zambia’s current invest-
mines; software for 3D mine modelling
ment opportunities and challenges in
and apps to improve mine logistics.
the mining and energy Industries.
[ LUSAKA, ZAMBIA ]
w w w.mi ni nggl o b a l. com
101
FINNING INTERNATIONAL 102
A DIGITALLY–LED CYBERSECURITY TRANSFORMATION WRIT TEN BY
CATHERINE S TURM AN PRODUCED BY
JA K E MEGE ARY
APRIL 2019
103
w w w.mi ni nggl o b a l. com
F I N N I N G I N T E R N AT I O N A L
Finning International has transformed its cybersecurity efforts, built strong partnerships and created a culture built on collaboration — Chief Information Security Officer Suzie Smibert tells us more
I
ndustry 4.0 is changing the game for the traditional industrial sector. New technologies and innovations have seen original
equipment manufacturers (OEMs) and suppliers turn towards new solutions to ensure greater efficiency, 104
improve safety, meet compliance requirements and guarantee substantial savings. However, such advances come with additional risks that can threaten the security of consumer and machine data, with breaches found to be the most costly in the United States and Canada by the Ponemon Institute. With firm routes in Canada, Finning International now amasses an impressive global footprint, spanning three geographies. Employing more than 13,000 people worldwide, the business has accrued a world class network of product support services across British Columbia, Yukon, Alberta, Saskatchewan, the Northwest Territories and a portion of Nunavut, as well as the United Kingdom, Ireland and South America. Its formidable reputation in industrial markets, such as mining, construction and agriculture, has enabled the company to become a key figure APRIL 2019
105
w w w.mi ni nggl o b a l. com
F I N N I N G I N T E R N AT I O N A L
“ We’re seeing a lot more digitization, connected assets and abilities to enhance performance solutions”
106
— Suzie Smibert, Chief Information Security Officer
in working with customers to achieve the lowest equipment owning and operating costs while maximizing uptime across their operations. However, to counteract the growing threat of cybercrime across Finning’s international footprint and remain ahead of the curve, Chief Information Security Officer (CISO) Suzie Smibert has looked to place security at the forefront of every employee’s mind. Demonstrating effective leadership as Finning looks towards its long-term vision and digital strategy, Smibert has been key in transforming its image of a sole reseller and service provider to that of an innovative, technology led company. “My background is primarily in information security, which knows no sector boundaries. Finning was an interesting company to me when it was presented as an employment option as it was an industry I had never been part of previously. It’s an organization with impressive reach with of the potential to transform how heavy machinery is used on a global scale,” says Smibert. “One of the things that gets me the most excited about this company is that we are not afraid of thinking outside of the box, creating technology, thinking of
APRIL 2019
CLICK TO WATCH : ‘FINNING PERFORMANCE SOLUTIONS’ 107 how can we optimize our customers’
2021, it has been essential for a leading
fleets and how we can provide custom-
company such as Finning to take
ers with the best equipment,” she adds.
a closer look at updating its systems,
“When you are a CISO, oftentimes you
remove redundancies and streamline
have your recipe that you use in one
its operations, which will filter into
organization, move on to the next and
its long-term aim to promote digital
use the same recipe with slight modifi-
innovation and engage further with its
cations for that specific business. As
diverse customer base.
Finning represented an industry I’d never
“In information security there is a lot
worked in, I didn’t know if my recipe
of convergence happening. Currently
would work. So, it was more exciting
there are an unsustainable number of
not to just ‘rinse and repeat’, but push
products and tools on the market which
myself towards something new.”
make it difficult to manage budgets,
With damage related to cybercrime projected to hit US$6trn annually by
complexity and maintain the skills to manage, in some cases as many as 50 w w w.mi ni nggl o b a l. com
F I N N I N G I N T E R N AT I O N A L
108 platforms at a company. I’m also seeing
monetization of data is being seen
tools that are providing the right amount
across every industry, yet Smibert is
of security, but could be better utilized
driven, and rightly so, to ensure that
and leveraged, whether inside of outside
the business remains pedantic around
of the security portfolio, across multiple
how data is used, whether the right
stress factors,” explains Smibert.
level of consent has been granted,
“At Finning, our customers are
and whether the correct contractual
evolving. We are seeing a lot more
agreements are in place, all to guaran-
digitization, connected assets and
tee consumer trust and transparency.
abilities to enhance performance
“Security, compliance and regulation
solutions for how our customers
can be a necessary evil. It can take
manage fleets and utilize our equip-
time to explain and demonstrate that
ment,” she adds. “An example of this
having security controls to protect our
is, instead of just having a driver unit,
customer data, employees’ data, meet
now we can optimize how the machine
privacy regulations wherever we are
is functioning by leveraging data.” The
operating,” she reflects.
APRIL 2019
“Internally, it takes a lot of relationship
ROBUST SECURITY
building amongst teams to help them
The establishment of the General Data
realize that we’re not going to slow
Protection Regulation (GDPR) across
them down or prevent a product from
its European operations has seen
being launched. We’re going to make
Finning join the UK government’s Cyber
sure a product is not recalled because
Essentials scheme which supports
it was secured at the engineering stage
businesses in protecting themselves
and conception stage, as opposed to
against common cyber threats. However,
when it goes live. Reassurance that our
most importantly, it works to ensure that
role is not a showstopper to business,
the business adheres to what Smibert
but is a enabler and can help us win
coins as “the most stringent” framework,
more business by demonstrating to our
where the business has mapped each
customers that we are serious about
control it needs to follow, and has
their data, their privacy, and are taking
selected the hardest to achieve,
control that is above the industry
applying this to its operations not just
standard. Having these controls in
in Europe, but worldwide.
place is an incentive for our customers
“We figure that if we set the bar high
to consider us as a provider rather
and require ourselves to meet the most
than going elsewhere.”
stringent requirements everywhere,
E XE CU T I VE PRO FI LE
Suzie Smibert Suzie is a security practitioner with more than 18 years of experience and is currently Finning International Chief Information Security Officer. Working with the leadership team, Suzie provides leadership, vision, strategy and experience for all things security. Suzie and her team are responsible for managing information security risks, protecting information and technology resources globally for Finning.
w w w.mi ni nggl o b a l. com
109
TRY IT FREE FOR 15 DAYS SIGN UP FOR FREE TRIAL
ABOUT CROWDSTRIKE CrowdStrike is the leader in cloud-delivered next-generation endpoint protection. CrowdStrike has revolutionized endpoint protection by being the first and only company to unify next-generation antivirus, endpoint detection and response (EDR), and a 24/7 managed hunting service. OUR SITE
CONTACT US
“ Our role is not a showstopper to business, but is an enabler and can help us win more business” — Suzie Smibert, Chief Information Security Officer
ture, Smibert has looked to promote cross-collaboration and rework in-region management teams. Hiring “tremendous talent” predominately from Calgary, she has been leading the transformation of Finning’s security and enterprise architecture services and embedded next generation multi-tool sets, allowing the business to improve its response, detection and management capabilities. “We have security individuals assigned to squads in the DevOps team. While they don’t sit in DevOps, they do report into the management team and exist as
and by transforming our behavior,
a service provider to that group, and
thought process and policies, we will
continue to report into my organization.
be able to tell our users the same story
“We do security as code. A lot of our tasks
wherever they work in the world,”
and requests are automated, when they
states Smibert. “I travel to our operating
are deemed low risk, it goes straight
regions frequently, and many of my
into code.”
coworkers are also nomads, working from every one of our facilities,
PROMOTING COLLABORATION
different regions, different countries.
As the business continually evaluates
We can’t expect them to know which
emerging products and technologies
behavior to adopt wherever they travel.
which could drive greater value, Smibert
If we tell them one set of behaviors, one
explains that the business undertakes
set of policies to meet, it makes our job
whole-market evaluations in advance
easier in the back end, and makes it
of a product’s shelf life in order to remain
much easier on our workforce.”
resilient, and looks not only to long-
By harmonizing, centralizing and simplifying Finning’s digital infrastruc-
standing players in the market, but also to innovative startups that can bring w w w.mi ni nggl o b a l. com
111
F I N N I N G I N T E R N AT I O N A L
EXPERIENCEMATTERS
Transform your security initiatives with IMagosoft Identity Management Solutions Inc., a proven security partner that brings integrated “best of breed� Identity and Access Management tools to the enterprise through strategic partnerships and talented, experienced security experts. IMagosoft works within your unique requirements to help you reach a cost-effective outcome to your Identity Management needs. IMagosoft offers a team of Identity and Access Management specialists that can engage at any point in the lifecycle of your IAM program. Our services include business case development, IAM transformation, development of program/product roadmaps, proof of concept implementation/review, pilot projects, implementation of IAM solutions through our professional services model, and operational support of Identity Management products.
CONTACT US
APRIL 2019
LEARN MORE
113
something unique to the table. “Many big
and strengthen its security operations.
companies only work with organizations
Collaborating with cybersecurity leader
that are tried and tested. At Finning, we
CrowdStrike, for example, has allowed
take well-calculated risks and work with
the business to embed next-generation
startups, or we consider open source
antiviruses across all of its digital
products after careful evaluation so that
environments, and gain chip intelligence,
we can get the best return on invest-
security protection and detection at all
ment and efficiency in our protection
of its endpoints. Not only that, it has also
and detection capabilities,� she says.
helped Finning practice better internal
Partnering with established players,
collaboration with broader technology
as well as pioneering startups, is
teams, identify applications or software
something to which Finning remains
that are no longer used and manage
thoroughly committed, in order to drive
its license with more efficiency.
further growth across the business
“We were able to not impact the end w w w.mi ni nggl o b a l. com
F I N N I N G I N T E R N AT I O N A L
user, give them the visibility and tools they needed, but in the back end, save a significant amount of money not only with our security portfolio, but our data science team, employee productivity services team and networking teams. It’s been quite powerful for us. CrowdStrike’s main play is security, but we’re using it outside of what it’s normally known for.”
WELCOMING DIVERSE TALENT Additionally, observing technology as an enabler and not a sole tool in the creation of a thriving collaborative culture, Smibert 114
has worked alongside the communications team and change management group as the business continues on its transformation journey, providing exceptional support to employees as well as ample opportunities for personal and professional development. “As part of our awareness program, we’ve enlisted a psychiatrist to help us define how our people learn and how they retain information. Instead of having an article on our webpage every couple of months, we have videos, face-to-face, gamification, and a variety of approaches to reach and engage our employees. Not everybody learns in the same way, so with change management and APRIL 2019
C O M PAN Y FACT S
• Finning has accrued a world-class network of product support services across Canada, the United Kingdom, Ireland and South America. • Embedding next generation multi-tool sets has seen the business to improve its response, detection and management capabilities. • Finning looks not only to longstanding players, but towards start-ups that can bring something unique to the table. • Collaborating with CrowdStrike has allowed Finning to gain chip intelligence, security protection and detection across its endpoints.
psychology, we’ve transformed our communication to craft a message in a way that is not too techy, rather it is approachable and relatable,” she explains. At Finning, Smibert is keen to stress that its employees are its strongest assets, and so upskilling its workforce will not only benefit employees but will also protect the organization, leading the business to avoid common cultural pitfalls across its various geographies. “We are in different countries in South America, and for someone that’s not going very frequently, they might think
a Chilean and an Argentinian think the same and both speak Spanish, so everything should then be the same. In reality, it’s not,” she states. “There w w w.mi ni nggl o b a l. com
115
F I N N I N G I N T E R N AT I O N A L
1933
Year founded
12,000+
Approximate number of employees
116
are subtleties, even if they both speak
key focus has been behind the delivery
the same language, operate and retain
of science, technology, engineering
data. Our communications groups were
and mathematics (STEM) education.
fantastic in helping us avoid addressing
Across each of its operating regions,
employees or teams in a way that would
the business has sought to inspire the
not resonate with them. When you think
innovators of tomorrow by supporting
of awareness and how you can really
the growth in STEM-based roles.
reach and influence your employees, it
Partnering with leading STEM outreach
gives you massive return on investment.�
organization, Actua in Canada, Finning provides financial support, volunteering
LONG-TERM OPPORTUNITIES
and hands-on opportunities to those
With such a global footprint, Finning
interested in areas such as program-
remains committed to contributing to
ming and coding.
a number of charitable causes, but one APRIL 2019
“Finning wants to see more influx of
117
inclusive and diverse talent in the field
that they get attracted into the culture
of STEM, so we partnered with Actua,
and the field of STEM.”
which is a camp for students and young
Looking at further opportunities, the
children, hosting engagement events
business has also recently acquired
on university campuses. I volunteer to
100% of 4Refuel Canada and 4Refuel
help students understand the world
US. As a leading mobile on-site refueling
of technology and the world of cyber
company supporting customers across
security. In the past year, we did exercis-
the construction, transportation, power
es involving coding machines, allowing
generation and oil and gas sectors, it will
them exposure to technology,” says
provide a multitude of advantages for
Smibert. “Some of my coworkers have
Finning, as more than 95% of 4Refuel’s
invited students to come into a branch
profitability is generated in Canada.
to see the heavy equipment and what
“By having 4Refuel join us to serve
a power systems engineer might do, so
customers across the different geograw w w.mi ni nggl o b a l. com
F I N N I N G I N T E R N AT I O N A L
phies where our customers operate, we’re going to reduce their potential downtime because they will have access to fuel to keep their operation going, as opposed to having to wait for delivery, or having a site that might not have all of the fuel capacity that they need. This is definitely one element where this acquisition will help us ensure our customers are up and running as much as they want, allowing them to be more nimble and at the end of the day, profitable,” says Smibert. “Additionally, having 4Refuel will 118
allow us to expand in some of our customer fleets where we might not have a service contract, primarily non-Caterpillar equipment. This will give us visibility in terms of the other assets that are used by our customers, and how they’re utilizing the other
“ I volunteer to help students understand the world of tech– nology and the world of cyber security” — Suzie Smibert, Chief Information Security Officer APRIL 2019
equipment. It is our hope that by providing holistic service that customers will think of us as the first place to buy their next piece of equipment.” Finning’s continued drive to fully expand its product and service offerings across Canada will see the business work towards a goal of acquiring 100% connected assets to deliver further support, and allow its data science and analytics teams identify business
119
opportunities to partner with its
tremendous, and the willingness to put
vendors and customers and create
ourselves in uncomfortable positions
long-term opportunities.
to achieve greater good, and do better
“Our next aim is to connect everything
for our customers, is something I’ve not
and create new technologies that are
seen elsewhere. It’s an inspiring part
going to transform and empower our
of our culture and a big part of what
customers and their partners to build
keeps me engaged in working here.”
and power a better world,” adds Smibert. In many places, once you have your initial transformation things slow down. The leadership at Finning hasbeen w w w.mi ni nggl o b a l. com
120
SUSTAINABILITY, EFFICIENCY AND TECHNOLOGY: LARGO RESOURCES’ RECORD BREAKING YEAR WRITTEN BY
HARRY MENEAR PRODUCED BY
RICHARD DEANE
APRIL 2019
121
w w w.mi ni nggl o b a l. com
LARGO RESOURCES
122
PAULO MISK, COO AND PRESIDENT OF LARGO RESOURCES, DISCUSSES SUSTAINABILITY, EFFICIENCY AND THE COMPANY’S RECORD BREAKING 2018
W
hen a winning strategy is executed by talented, passionate professionals in favorable conditions,
the results can be spectacular. Last year, Largo Resources experienced just that. With headquarters in Toronto, Largo Resources is a strategic mineral company focused on the production of vanadium flake, high purity vanadium flake and high purity vanadium powder at the Maracás
APRIL 2019
123
w w w.mi ni nggl o b a l. com
LARGO RESOURCES
“WE’VE HAD GREAT RESULTS FROM A GREAT PERFORMANCE IN 2018. IT’S DOWN TO HAVING A GREAT DEPOSIT, EFFECTIVE TECHNOLOGY, AND AN EXCELLENT TEAM” — Paulo Misk, COO and President, Largo Resources
124
Menche Mine in Bahia State, Brazil. In 2018, the company reported revenues of CA$521.4mn – a 211% increase year on year – and four consecutive quarters of production growth. Starting in 2014, Largo has successfully ramped up its vanadium operations, building a strong team and incorporating state of the art technologies into its operations. “We’ve had great results from a great performance in 2018. It’s down to having a great deposit, effective technology and an excellent team,” APRIL 2019
CLICK TO WATCH : ‘LARGO RESOURCES LTD – CORPORATE VIDEO’ 125
says Paulo Misk, Chief Operating
make the car lighter, which saves fuel,
Officer (COO) and Corporate
shipping costs, etc... Vanadium means
President of Largo Resources. Misk
there’s less environmental impact
discusses Largo’s record breaking
along the whole steel chain. The whole
best year to date, and why vanadium
world should use vanadium to have a
promises a bright future for Largo
better environmental situation in the
Resources and the planet.
future.” The added strength that
“Vanadium is a ‘green metal’. When
vanadium provides to manufactured
you use approximately one kilo of
steel had significant benefits for Largo
vanadium in a tonne of steel, it
Resources in 2018 when, in November,
increases its tensile strength up to
China introduced new quality stand-
80%, which means you don’t need to
ards for rebar production. “There was
use as much steel when making a car,
higher demand, low supply and a
for example,” explains Misk. “You can
very low global inventory,” Misk says. w w w.mi ni nggl o b a l. com
LARGO RESOURCES
126
“That’s the perfect situation for increased
company entering 2019 with a cash
price and that’s what happened with
balance of $206.2mn.
vanadium.” Last year, according to
In addition to vanadium’s natural
Vanadium Price, the Chinese market
propensity for sustainably enhancing
price of Vanadium Pentoxide (V2O5)
the steel supply chain, Largo Resourc-
Flake rose from $11.50/lb in January, to
es is determined to marry its profitabil-
$32.00/lb in November. The combina-
ity with a sustainable approach that
tion of soaring prices and the high
benefits both the environment and the
quality of the Maracás Menchen Mine
communities surrounding the Maracás
resulted in the operation reporting
Menchen Mine. “We value and take
record production figures of 9,830
very seriously the ways in which we
tonnes of V2O5 in 2018 (2,595 of
contribute to our community,” says
which were mined in Q4), a 6%
Misk. “We must do our best to improve
increase over 2017, which led to the
and have a positive impact on the
APRIL 2019
$521mn
CA
Approximate revenue
1988
Year founded
800+
Approximate number of employees and contractors
127
E XE CU T I VE PRO FI LE
Paulo Misk is a mining engineer with over 33 years’ experience in operational management. He was responsible for some successful mining operations in Brazil such as RHI-Magnesita and AMG — Advanced Metallurgical Group N.V. (Niobium, Tantalum, Tin and Lithium Operation). Most recently, Mr. Misk ran Anglo American’s Catalão Project from 2011 to 2014 as Head of Niobium Operations doubling its EBITDA. Paulo has lead the Vanadium operation of Largo Resources since its start in 2014 implementing innovative policies and fostering a high-performance culture that greatly improved production and outstanding financial results. Paulo is also President of Sindimiba (a mining companies association in Bahia), Director of FIEB (Bahia Industry Federation) and responsible for mining chapter of CCBC (Commerce Chamber of Brazil-Canada). w w w.mi ni nggl o b a l. com
LARGO RESOURCES
C O M PA N Y FACT S
•N et income of $316.0mn and basic earnings per share of $0.61 in 2018 •R evenues of $521.4mn in 2018, a 211% increase over 2017 •C ash provided before non-cash working capital items of $403.2mn in 2018, an increase of $336.1mn over 2017 128
•C ash operating costs excluding royalties of $4.41 (US$3.38) in 2018 • $ 206.2mn in cash exiting 2018 •R ecord production of 9,830 tonnes of V2O5 in 2018, exceeding midpoint guidance of 9,650 tonnes by 2% and a 6% increase over 2017 •F our consecutive quarters of production growth in 2018 •E xpansion plan completion target of Q2 2019 with ramp up to follow in Q3 2019
APRIL 2019
129
w w w.mi ni nggl o b a l. com
GEA Solutions for Mining & Mineral Enhancing cost-effectiveness and environmental compatibility of the required production processes
GEA is the world leader in evaporation and all types of crystallization equipment design and technology. Our expertise includes thousands of installations worldwide. With this deep knowledge base, GEA is able to implement the R&D necessary to devise the process components which best meet the customer’s needs. By closely coordinating project protocols, our customers regularly meet and exceed quality and production targets. For more information please visit GEA’s website.
community. Largo Resources has very
footprint of the mine itself”, according
robust social programs, which focus
to Misk, where native species are
on professional vocations and providing
preserved on over 2,200 hectares of
support to local entrepreneurs. We
natural forest. Wild animals found in
also have other programs that support
the project area are captured and
local education, sports, culture and
released onto the reserve. A native
entertainment. We help our workers’
plant greenhouse with the capacity to
families have a better place to live.”
produce 20,000 trees is also being
Largo Resources is also committed
cultivated to reforest the surrounding
to limiting its environmental impact.
area. “I think mining has a lot of very
The company, through the Maracás
good options to contribute to the
Menchen Mine, owns and oversees the
planet’s future,” says Misk. “Not only
San Conrado farm and nature reserve,
by providing materials for new tech-
“an area 25 times larger than the
nologies, which reduce environmental
APRIL 2019
“THE WHOLE WORLD SHOULD USE VANADIUM TO HAVE A BETTER ENVIRONMENTAL SITUATION IN THE FUTURE” — Paulo Misk, COO and President, Largo Resources
131
impact overall, but by ensuring that our actions are creating the smallest environmental impact possible, and even improving the environmental situation if we can. We are here to do our best and to make our world better. That’s our responsibility.” With regard to its business ventures, Largo Resources is undoubtedly doing its best, utilising tier-one technology from innovative, world-class suppliers like GEA Group, in order to create a product that is superior to the company’s competition. “Largo has the best w w w.mi ni nggl o b a l. com
LARGO RESOURCES
132
APRIL 2019
“WE VALUE AND TAKE VERY SERIOUSLY THE WAYS IN WHICH WE CONTRIBUTE TO OUR COMMUNITY” — Paulo Misk, COO and President, Largo Resources
ore grade vanadium deposits in the world. It’s a fantastic deposit. World class. Also, we have very good technology, and an innovative, learning based approach,” Misk says. “Add that to our amazing team, and success is just a matter of time. When you look at plant performance, our recovery from the ore to flake to final product is 77%, which we’re looking to raise to around 80% in 2019. We have a very good ore grade; it is, on average, 1.2% V2O5, which is much higher than any of our competitors w w w.mi ni nggl o b a l. com
133
LARGO RESOURCES
134
“WE ARE READY TO BREAK NEW RECORDS IN 2019 AS WELL” — Paulo Misk, COO and President, Largo Resources
around the world. Also, after mining and ore treatment, the concentrate that’s generated is about 3.2%, more than 50% higher than any other competitor.” The high quality and efficiency of production ensure that Largo Resources is able to achieve increasingly lower costs. “We have been constantly improving our process,” says Misk. “High recovery is a big factor and we adapted our APRIL 2019
135
w w w.mi ni nggl o b a l. com
LARGO RESOURCES
136
“CONSIDERING THE CURRENT SUPPLY AND DEMAND, WE SHOULD SEE A VERY STRONG MARKET FOR VANADIUM OVER THE NEXT THREE TO FOUR YEARS” — Paulo Misk, COO and President, Largo Resources
APRIL 2019
137
process to yield the lowest amounts of
is expected to deliver an additional
raw materials like ammonia sulfate. This
200 tonnes of V2O5 per month. “We
way we get a very low cost and still have
expect to keep increasing our produc-
the best quality product in the world.”
tion. Considering the current supply
Misk is optimistic about the future
and demand, we should see a very
of Largo Resources. In November,
strong market for vanadium over the
the company announced a planned
next three to four years,” says Misk.
expansion to the Maracás Menchen
“We are ready to break new records in
Mine. Scheduled for completion in
2019 as well.”
June 2019, the project will focus on the milling, fusion, evaporation and filtering capabilities of the facility, and w w w.mi ni nggl o b a l. com
138
DSI: Local presence, global competence WRIT TEN BY
DA LE BENTON PRODUCED BY
RICHARD DE ANE
APRIL 2019
139
w w w.mi ni nggl o b a l. com
DSI UNDERGROUND
Carlos Leigh, Regional Chief Executive Officer, DSI Underground LATAM, discusses how DSI Underground brings international expertise to underground mining
I
n today’s mining industry, key traits required to succeed are service, safety, competitive cost and quality.
DSI Underground Group CEO, Michael Reich, understands this and drives it across the 140
company’s global operations. “At DSI Underground, we aim for excellence, leadership and profitable development in our underground markets around the world. We are committed to conducting our business with integrity everywhere,” he says. Founded in Germany in 1865, DSI Underground Group has firmly established itself as a global market leader, providing ground support products and systems for underground mining and tunnelling customers in more than 70 countries worldwide. The company has more than 1,700 specialised and experienced employees that work with customers to provide next-level services and support. “We approach every customer in every market with the same mindset: local presence combined with global APRIL 2019
141
w w w.mi ni nggl o b a l. com
PROFESSIONAL MANUFACTURER OF SELF DRILLING ANCHOR SYSTEM • Sinorock is an experienced manufacturer of anchoring products with over 10 years’ production experience. • Sinorock self drilling anchor bolt size range from R25 to R51, T30 to T200. • All products are traceable.
View Our Website Website: www.sinorockco.com E-mail: info@sinorockco.com Tel: 86-379-60105687 Mob: 86-15225506324
®
Luoyang Sinorock Engineering Material Co., Ltd.
CLICK TO WATCH : ‘DSI UNDERGROUND TUNNELING’ 143 competence,” explains Carlos Leigh,
Leigh notes that underground tunnel-
the company’s Regional Chief Executive
ling is currently a growing market,
Officer. “We’ve been successful in this
meaning that it has quickly become
approach and as we increase our service
a crowded marketplace for companies
support, we have created trust with our
like DSI. This is where the company’s
customers. They trust in DSI and the
approach to support services makes
support we provide with our products.”
it stand tall above the competition. “DSI
It is this trust and brand recognition
delivers higher quality products in the
that DSI has established over decades
market,” says Leigh. “But it’s the
in operation that will support the com-
technical capability of our teams that
pany’s continued growth plans in the
makes the difference. We have tech-
Latin American (LATAM) markets.
nical sales teams, and mining and
The firm has a strong presence in
engineering professionals in all of our
Mexico, Chile, Argentina, Brazil,
markets. They are right there at the
Colombia, Peru and Ecuador, and
work sites, communicating and working w w w.mi ni nggl o b a l. com
DSI UNDERGROUND
“ We approach every customer in every market with the same mindset: local presence combined with global competence” — Carlos Leigh, Regional Chief Executive Officer, DSI Underground LATAM 144
APRIL 2019
with customers directly.” Communicating
end though, we see that specific product
with the customer and understanding
for that specific problem can be applied
the evolving needs of their mining
to other customers in other mines.
operation is key for any service prov-
Tunnelling customers have the same
ider to be able to offer products and
or similar problems and so over time
support that enables them to operate
we build this net of expertise and con-
successfully and safely. Leigh believes
tinue to improve our support around
that the evolution of the company’s
that expertise.”
products and capabilities comes directly
For Leigh, this net of collaboration is
from working with such a vast network
what separates DSI from other service
of global customers. “We find that when
providers as its support to each customer
a customer shares their needs with us,
in each market comes from its work
they join us to develop new products
with previous customers. But how does
specifically for them,” he says. “In the
the company measure success? The
E XE CU T I VE PRO FI LE
Carlos Leigh Carlos Leigh holds both Finance Engineer and MBA qualifications, having studied at Diego Portales and Barcelona Universities in Chile and Spain. After six years as a bank executive, in 2002 Leigh joined a family-owned business called Soprofint, where he led the company’s negotiations — this was sold to DSI in early 2007, and Leigh became Managing Director at the new DSI Chile office. For three years, he worked to develop and grow the South American business, before joining Jennmar International in mid-2009. Following a successful six years developing Jennmar’s business across Latin America, he returned to DSI as part of a new business acquisition through the region in 2016. In 2018, Leigh became Regional CEO at DSI LATAM.
w w w.mi ni nggl o b a l. com
145
HEAVY DUTY SOLUTION HIGH QUALITY SERVICE Hot dip Galvanizing | Cable Tray | Galvanized Steel Santiago | Chile CONTACT US
ventas@gymsa.cl www.gymsa.cl
a partner of
customer is at the centre of everything
it just cannot work that way and so we
it does and so DSI ensures it not only
have to be right there in the trenches
listens to its customers from a product
with our customers.”
perspective, but also looks at how the
Safety is paramount to any com-
company can improve its relationship
pany and DSI works towards a very
with them. Market intelligence proves
specific goal of achieving zero acci-
key here and Leigh explains that DSI
dents in its own production plants,
has the best possible market intelligence
and then works with customers to
at its disposal. “The work site is every-
develop the best product and the best
thing,” he says. “We have our profession-
support possible in order for custom-
als at the work sites on a weekly basis,
ers to achieve their own safety goals.
working directly on the operation to
In the Latin American mining market,
see what’s happening in real time. It’s
the topic of mine safety is a particu-
very difficult to follow your customer’s
larly pertinent one and Leigh looks
needs sitting at a desk. In tunnelling
at the evolving mining landscape and
APRIL 2019
how significant improvements have been made to enable a growing marketplace for DSI. “The improvements over the last 20 years have been incredible. If you compare with the past, it’s much better, but not enough yet,” he says. “I believe this because the market as well is changing. More and more professionals are studying; miners, engineers and technical engineers are all coming from universities with a different view as well. That is improving professionals in the
“ We find that when a customer shares their needs with us, they join us to develop new products specifically for them” — Carlos Leigh, Regional Chief Executive Officer, DSI Underground LATAM
147
w w w.mi ni nggl o b a l. com
DSI UNDERGROUND
148
APRIL 2019
“It’s very difficult to follow your customer’s needs sitting at a desk… we have to be right there in the trenches with our customers” — Carlos Leigh, Regional Chief Executive Officer, DSI Underground LATAM
w w w.mi ni nggl o b a l. com
149
DSI UNDERGROUND
150
work site, it’s improving our own cap-
evolving needs, so that’s what we
acities to support our customers, and
have to do,” he says. “This is continu-
everything as a package is improving
ous work, and every day is a new
what is meant by safety in mines.”
challenge to create a much better
DSI is a recognised leader and with
product, a much better system, and
that position comes a responsibility
to be at a level that our customers
to define and develop this evolving
demand from us.”
marketplace. Leigh understands this
As the LATAM market continues
responsibility. “Our customers expect
to grow, Leigh hopes that DSI can
the best product, the best support,
continue to deliver its internationally
the best service, and the best product
recognised success. One of the
development catering for their
company’s key strategic goals over
APRIL 2019
151
the next five years is to maintain its
needs and this will only become more
leading position and Leigh under-
demanding in the future. I believe we
stands that in order to achieve this,
have the best people in the market
DSI must continuously evolve,
and that net of international expertise,
challenge itself and always be there
coupled with our customer base,
for the customer. “Our approach will
which is everything. To be a leader is
to be there for the growing market.
our responsibility and working with
If we can actually drive that growth,
these experts allows us to be more
perfect – but to be there is the most
than prepared for that.”
important part for us,” he says. “In order to do that, we need to improve every day for the changing customer w w w.mi ni nggl o b a l. com
152
APRIL 2019
EMMERSON: DISRUPTING THE GLOBAL POTASH MARKET WRIT TEN BY
DA LE BENTON PRODUCED BY
RICHARD DE ANE
w w w.mi ni nggl o b a l. com
153
EMMERSON PLC
HAYDEN LOCKE, EXECUTIVE DIRECTOR OF EMMERSON, EXPLORES HOW THE COMPANY LOOKS TO DISRUPT THE BOOMING POTASH MARKET WITH THE KHEMISSET PROJECT
154
I
n the mining industry, location is not only a competitive advantage – it can
also be the difference between success and failure. This is particularly the case in the global potash market, one that has a number of barriers to entry meaning only a handful of operations have been built over the last 50 years. “There’s a reason why there’s been only one new potash mine built in the last 50 years outside of Russia and China and that is primarily the astronomically high capital cost to production for most potash mines,” says Hayden Locke, Executive Director of Emmerson. “That mine was built in Canada, cost over US$4bn, and was built at a time where potash prices were more than double what they are today. In today’s market, that mine would never have been built.”
APRIL 2019
155
w w w.mi ni nggl o b a l. com
EMMERSON PLC
156 Emmerson is a potash company focused on the development of its flagship Khemisset Potash Project, located in Northern Morocco. The project has significant exploration potential with an accelerated development plan that is targeting a low capital expenditure (capex), high margin potash operation which will produce around 800,000 tonnes per annum. One of the key highlights of the project is its very low capital cost to production by potash industry standards. In the opinion of Locke, this is the first hurdle to be cleared in order to have any chance APRIL 2019
“ I F YOU’RE CLOSE TO YOUR END MARKET, YOU WILL LIKELY ALWAYS BE COMPETITIVE, JUST THROUGH THE COST SAVINGS IN THIS KEY AREA” — Hayden Locke, Executive Director, Emmerson
CLICK TO WATCH : ‘EMMERSON PLC ON TARGET WITH LOW CAPEX POTASH PROJECT’ 157 of entering this extremely protected
through the cost savings in this key
market. Its location in Morocco, with
area. Khemisset’s location is second
a number of export ports accessible
to none, and with the negligible royal-
from the project site and close proxim-
ties payable in Morocco it has a huge
ity to the deep European, Brazilian
advantage over competitors.”
and US markets provides the second
Morocco is fast becoming a signifi-
competitive advantage –one which is
cant player in the global potash market
unerodable. “The majority of existing
and has been identified as one of the
potash production is located in Canada
top five fastest growing import markets
and the Former Soviet Union, and by far
for potash in the world. This has seen
the biggest costs for these producers
potash demand grow at over 140% per
are incurred through royalties, trans-
year over the last five years. “That’s
port and logistics,” Locke explains. “If
basically 70 times faster than the
you’re close to your end market, you
global market,” says Locke. “That’s a
will likely always be competitive, just
real strategic advantage to this project w w w.mi ni nggl o b a l. com
EMMERSON PLC
158
APRIL 2019
and something that gets me excited
will prove key in attracting investment
about what we can achieve.” Over the
as it looks to advance development.
course of his career, Locke has worked
“Having worked for the best part of a
in senior executive roles for a West
decade in the commodity space and
African gold developer and a potash
dealing with commodity cycles, you
development company based in both
hear of people getting lucky and timing
London and Spain. This experience
their investment in the cycle perfectly,”
has provided him with a unique view of
says Locke. “But that is not easy to
the potash market, as well as the chal-
do, so you need to bulletproof yourself
lenges of working in the African market
against the cycle by being among the
and attracting investment. Khemisset
lowest delivered costs to your custom-
benefits from an incredibly attractive
er and in potash: that’s largely driven by
location, but Emmerson also looks
location.”
to create an operation with very low
The Khemisset project is less than
capex by industry standards, which
150km from an operating port that is
E XE CU T I VE PRO FI LE
Hayden Locke Hayden is an experienced mining executive with over 15 years’ experience in mining, private equity and investment banking. Most recently, Hayden was Head of Corporate and Technical Services (Geology, Mining and Processing) at ASX listed potash developer Highfield Resources. Prior to this, Hayden was Head of Corporate for ASX listed Papillon Resources which was sold to B2Gold in 2014 for $650mn. Throughout his education, Locke studied engineering, commerce and geology.
w w w.mi ni nggl o b a l. com
159
THE PROFESSIONAL DRILLING EXPERIENCE Drillon is a newly established drilling company with a globally experienced, highly focused and motivated multinational team from the drilling industry. With a success-oriented team our aim is to give our clients “the professional drilling experience”.
DRILLING
CONSULTANCY
EQUIPMENT SUPPLY VISIT OUR SITE CONTACT US
161
already accessible from existing logis-
It’s certainly a leader in Africa from an
tics infrastructure, and is 90km and
infrastructure standpoint, even when
130km respectively from two additional
compared to South Africa, and we
ports, which are also easily accessible.
benefit from that massively with amaz-
Having this infrastructure already in
ing roads to and from our location and
place, with limited invest-ment required
general infrastructure at the mine site.”
by the company, means a significant
Around 95% of potash produced
reduction in overall capital costs. It
around the world is used in fertiliser
does not need to invest in upgrading
for agriculture. It has a direct impact
or building the infrastructure. “The
on the global food supply, and with the
transport and logistics infrastructure
UN expecting the world population to
to get to the export stage is first class,”
reach 9.8bn by 2050 the demand for
says Locke. “Morocco is a trading
potash will only continue to increase.
nation with incredible infrastructure.
Locke feels that as the global agriculw w w.mi ni nggl o b a l. com
EMMERSON PLC
ture space looks to increase its yield and production by around 70%, it will both control and protect the potash market. “For the last hundred years this market has been dominated by a handful of suppliers who have shown themselves to be very disciplined when the price fluctuates. When prices rise, they increase production to bring the price back down,” he says. “When you combine this price discipline with the traditionally high barriers to entry – in the form of capex – you can understand why there have been virtually no new entrants to the market in the last five decades. The only way to guarantee entry to this market is through lower capital cost production, which is what Khemisset will bring.” The traditionally controlled potash
has tried on three separate occasions
market has allowed companies like
to enter the potash market, all of which
Emmerson to look at existing and
have proven unsuccessful. “This is the
successful potash operations in great
world’s largest mining company and
detail. In particular, Locke has been
they could not get past those barriers
able to better understand the structure
to entry, so you really need to take a dif-
of the market in order to see whether
ferent viewpoint,” he says. “We spent
Emmerson could compete – and in-
a lot of time looking at our competitors
deed whether it should compete with
and those existing operations to ana-
incumbents in the first place. He points
lyse the cost structures and what does
to BHP as an example: the company
and doesn’t work before embarking on
APRIL 2019
“IT’S A FAIR AMOUNT OF WORK TO GET THROUGH BUT WE’VE GOT LOFTY AMBITIONS” — Hayden Locke, Executive Director, Emmerson
163
this journey.” This approach allowed Locke and
Orleans, Louisiana (NOLA). “I call it the Atlantic corridor,” says Locke. “It
Emmerson to identify two clear pre-
accounts for around 65% of global
requisites to success: capital cost
potash consumption. This is where we
to production, and location relative
will focus our attention because of our
to customer and end prices. With
strategic conclusion on where we can
Khemisset he believes that the com-
compete and where we can maintain
pany has “ticked both boxes” and can
our competitive advantage against our
focus on its key markets of north-
incumbent peers.”
west Europe, South Africa, Brazil and North America accessed through New
An international mining operation, regardless of the attractiveness of its w w w.mi ni nggl o b a l. com
EMMERSON PLC
cost structure and location, requires local partnerships in order to succeed. Locke believes this is absolutely fundamental as local partners can provide crucial input regarding local market economics. Emmerson is currently identifying and streamlining its supplier network and Locke approaches this with a knowledge sharing mindset. “Having local partners of size and scale to be able to support you and give you the right answer and provide you unfettered service and access to whatever 164
it is you need is fundamental to success,” he says. “It’s very, very difficult to succeed in Africa without strong local partnerships.” Locke says another area which is fundamental to success is identifying partners with strong technical expertise. “Technical expertise is hard to come by, especially in potash. It is important to identify those groups and work with them as early as possible. One example is our drill contractor, Drillon, who has proven itself to be an exceptionally professional and technically competent partner for our current drilling campaign”. The next 12 months will be pivotal for APRIL 2019
“THE TRANSPORT AND LOGISTICS INFRASTRUCTURE TO GET TO THE EXPORT STAGE IS FIRST CLASS” — Hayden Locke, Executive Director, Emmerson
Emmerson and the Khemisset project as the company is currently working to acquire its mining licence, deliver an environmental social impact assessment (ESIA), and conduct and complete a definitive feasibility study (DFS). The company has commenced a drilling programme to upgrade its resource estimates and, according to Locke, “cement the confidence that we have in the numbers and technical characteristics of the ore”. “Ideally we will have delivered on most of that this year,” he adds. “It’s a fair amount of work to get through but we’ve got lofty ambitions.” Khemisset looks set for a mid-2022 production phase, when Emmerson will cement itself as a key driver of a broader African fertiliser story. Locke believes that the company will achieve its targets because of the time it has invested so far in getting it right. “Achieving that will be a testament to the work that we’ve put in,” he says, “and because we’ve been through the process a number of times we know exactly what we need to do.”
w w w.mi ni nggl o b a l. com
165
First choice for the sand and aggregate industry We supply: Trio® crushers Trio® vibrating screens Enduron® vibrating screens Trio® feeders Trio® washers Trio® conveyors Sand washing solutions For more information contact us on +971 4 8080244. Get more from your quarry with Trio®. Visit www.trio.weir today
TRIO® Minerals www.minerals.weir
Copyright © 2015, Weir Slurry Group, Inc.. All rights reserved. WEIR is a trademark and/or registered trademark of Weir Engineering Services Ltd.