Mining Global Magazine – April 2019

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

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03

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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

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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

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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

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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.”

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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.

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23

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“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.

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“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.

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Mining With our experience in many different types of geological terrain SGC’s personnel will provide the guidance and solutions you need.

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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.”

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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

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SAFETY PRODUCTIVITY PRIORITY FOLLOWED BY

IS OUR

A MEMBER OF THE

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2012

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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

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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

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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

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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

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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.”

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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

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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

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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

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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.”

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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

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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

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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.”

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O P E R AT I O N A L E X C E L L E N C E

CHAMBER OF MINES:

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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

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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

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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

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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

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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.�

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T O P 10

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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

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T O P 10

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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.�

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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.”

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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.

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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.

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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.

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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.�

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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.”

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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.

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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.

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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

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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

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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.

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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.

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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 ]

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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

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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

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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.

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109

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“ 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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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.

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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.”

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165

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