Spwgbusinessplan by Workforce South Pacific

MARKET OPPORTUNITIES: Business Capability Report

November 2012

• Business planning • Diagnostic analysis • Resource needs assessment

• Global strategic management • Multiple site operations • Cultural engagement

• Global marketing strategy • Market entry options • Maketing mix

International Planning

Market Strategy

International management

Export / Import Facilitation • Export/import planning • Export/import development • Intermediary services

Special focus on South Pacific enterprise developments

Table of Contents 1.0 EXECUTIVE SUMMARY .......................................................................................... 4 1.1 1.2 1.3 1.4

Background and description of the business ..................................................................... 4 Business Mission Statement .............................................................................................. 6 Market Analysis .................................................................................................................. 7 Competitive Strategies ..................................................................................................... 10

2.0 PRODUCT/SERVICE & MARKET ANALYSIS ...................................................... 11 2.1 2.2 2.3 2.4

Product/Service ................................................................................................................ 11 Market Analysis ................................................................................................................ 16 Industry Description and Outlook ..................................................................................... 20 Competitive Strategies ..................................................................................................... 23

APPENDICES ................................................................................................................. 26

1.0 EXECUTIVE SUMMARY 1.1 Background and description of the business

Workforce Group of Companies Ltd (WGCL) is comprised of two companies, South Pacific Workforce Ltd based in Cairns, Australia and Workforce South Pacific Ltd based in Tabubil, Papua New Guinea (PNG). Its Australian business services its client bases located in South Africa and Asian mining operations and the PNG business provides contract services to the PNG mining sector. Workforce Group of Companies Ltd (WGCL) provides management and operations support to these two businesses and is located in Port Moresby the national capital of PNG. WGCL through its two businesses provides life cycle services for shutdown maintenance on sag and ball mill-relining operations for which WGCL is a specialist. The Group also provides maintenance and servicing on gyro, cone and jaw crushers, rubber relining and re-coating maintenance on other high wear process plant including apron feeders, flotation tanks and structures.

WGCL company structure

Workforce South PaciDic Ltd (PNG)

South PaciDic Workforce Ltd (Australia)

Workforce Group of Companies Ltd (PNG)

This merger has come about to provide added capabilities to meet the demands of WGCL’s growing reline maintenance market in PNG, Asia and Africa. WGCL provides cost-effective and comprehensive heavy maintenance including crushing, grinding and flotation maintenance needs. As a specialist reline contracting firm, WGCL also is involved in the development and delivery of reline maintenance training and associated risk and safety reporting to its clients. The Group has established market growth in PNG having secured two thirds of the mining reline business and have built this using cost-effective labour and efficient reline planning and controls. Recently the Group added labour hire services to its business portfolio and have experienced strong growth in its labour force to around 12,000 registrations. WGCL have enhanced their capabilities through having solid mining experience among all its core personnel along with a broad range of technical and trades certifications.

WGCL maintenance focus areas

Flotation process

Crusher process

Grinding process

1.2 Business Mission Statement

It is our business strategy to build and sustain a long term ‘cooperative relationship’ with our clients by: §

Dedicating key resources to our clients to guarantee service excellence

§

Providing innovated and cost effective solutions

§

To enhance and accomplish company visions to meet the ever-growing demands for business in PNG today.

§

Enhance and improve better government services through decent infrastructure development programs.

§

Maintain our level as a world-class company.

§

Strive to sustain our vision and mission by constantly seeking renewal through training and the application of new work methods, culture and best work practices

WGCL key business mission components

Service Excellence

Best Work Practices

Long-‐Term Client Relationships

Meeting Business Demands

Cost-‐Effective Solutions

1.3 Market Analysis

Mill relining market The mill relining market is characterised by three tiers of participants, mill and crusher manufacturers, reline machinery manufacturers and specialty reline contractors which makes the competitive structure dense and constrains long term growth for those in the lower tier. Large market leaders like Metso (Finland) form the top competitors in the reline industry and have a distinct advantage in early mover access to new mining projects typically during the procurements phase. Second tier participants are manufacturers of reline machinery who also offer reline maintenance including TME Group (Australia). Third tier is representative of firms like WGCL that predominantly offer reline maintenance as their core focus. The PNG reline maintenance market is estimated at around K24 million p.a. and is represented by five large scale minerals-based mining operations (OK Tedi, Porgera, Lihir, Hidden Valley, Ramu) and WGCL has secured all bar Ramu as its current share. WGCL has secured this level of market share through adoption of cost-leadership and effective job planning and controls, resulting in a contract cost around a third the industry average.

WGCL PNG relines market

OTML

Porgera

WGCL

Hidden Valley

Lihir

Much of the growth for reline maintenance is expected to come from South and North American markets with forecasted increases of 80% and 50% respectively for copper and gold processing. For WGCL the other strong growth region is Africa with large investments in new mining operations underway in South and West Africa. West Africa in particular is undergoing major expansion in minerals-based mining growth and is forecasted to supply around 10% of global iron ore by 2025. For the PNG market there is scope for continued growth for the PNG reline market with three world-class mines (Walfi-Golpu, Frieda River and Yandera) forecast to commence operations within the next few years. Collectively the current contracts for WGCL-serviced mine sites based on remaining life represent a market potential around K250million (2012 costs) over the next 20 years.

Labour hire market There are three identified participant groups in the PNG labour hire market, Representative Landowner Companies (Rep Lancos), PNG general construction firms and specialist recruitment firms. Both the Rep Lancos and recruitment firms have been engaged through the recent PNG LNG construction phase but are seeking to target other project opportunities as the LNG construction winds down over 2013. Construction firms in PNG provide a reliable source of skilled and general labour resources to support infrastructure developments. Broadly there are three market channels for securing labour hire contacts within the PNG market, through key government delivery agencies, mining operators and mining trust companies. The recent PNG development budget appropriation for infrastructure developments amounts to K5.3billion over the next five years (2012 â&#x20AC;&#x201C; 2016) with the Department of Works securing K3billion mainly for the national road infrastructure programs. The Independent Public Business Corporation (IPBC) oversees a K600million investment for Port Moresby (POM) sewerage and Lae Port developments. Mine operators under their MOU/Development obligations provide community infrastructure investments with Oil Search reporting around K50million p.a. for local development projects like road works and other civil construction. Lastly the mining trust companies like the Papua New Guinea Sustainable Development Program (PNGSDP), which receives around K500million

royalty payments from OTML, has invested around K320million to date on community and infrastructure development projects.

PNG labour market channels

Mining operators-‐Oil Search K50m p.a.

Royalty Trusts -‐ PNGSDP K320m nationally

PNG budget-‐Medium Term Development Plan -‐ K1.3b

1.4 Competitive Strategies

It is recommended that WGCL will need to consider strategic alliances to grow both its heavy plant maintenance, training and labour hire business portfolios. Strategic alliances will provide WGCL with added certainties around access to expertise, experience, greater resources and access to global client bases of its chosen partnerships. Global leaders bring excellence and required scale to WGCL to enable it to grow its reline and training business and therefore firms like Metso (Finland) and REM (Australia) would enable WGCL to access latest technologies for crusher, mill and reline machinery processes and training to boost the capabilities for WGCL. Ultimately such alliances will allow WGCL to access a greater global network through these firms and gain first mover competitive advantages with these firms as they seek markets with major mining operators globally. Such an alliance will strengthen WGCL as a premier training provider for the Asia / South Pacific region and enable it to boost its labour crews for major growth.

Adopting the same strategy for its labour hire business will enable WGCL to align with key levels in the PNG labour market including peak infrastructure delivery agencies for the government like IPBC and the Department of Works who provide the bulk of national budget appropriations and have extensive industry networks. Seeking registration as the preferred supplier to these agencies will be a critical success factor for this strategy. Mining operators like Oil Search will provide WGCL to make stronger connections with their community development projects programs and participate in the royalty-funded developments offered through agencies like PNGSDP.

2.0 PRODUCT/SERVICE & MARKET ANALYSIS 2.1 Product/Service

Mill relining maintenance Workforce Group of Companies Ltd (WGCL) is comprised of two companies, South Pacific Workforce Ltd based in Cairns, Australia and Workforce South Pacific Ltd based in Tabubil, Papua New Guinea (PNG). Its Australian business unit services its client bases located in Africa and Asia and the PNG business provides contract services to the PNG mining sector. Workforce Group of Companies Ltd (WGCL) provides management and operations support to these two businesses and is located in Port Moresby the national capital of PNG. WGCL through its two businesses provides life cycle service contracts for shutdown maintenance to the minerals-based mining industry. This includes sag and ball mill relining operations for which WGCL is a specialist. The Group also provides maintenance and servicing on gyro, cone and jaw crushers, rubber relining and re-coating maintenance on other high wear process plant including apron feeders, flotation tanks and structures.

Grinding media fundamentals: WGCL maintenance Typical grindingoperations circuitsfocus

SAG Mills

HPGR

Rod Mills

Ball Mills Source: Moly-Cop

In addition, WGCL provides specialist-relining maintenance training programs, undertakes relining-related job safety assessments and job reporting. The Group provides a depth of mining and relining strengths with their crews averaging over five years experience in all relining operations and have broad trades and technical skills and a total commitment to safety. The core features WGCL provides to its mining operator clients are a highly efficient maintenance capability, minimising shut down time, reducing operating costs and lost revenues. WGCL ensures minimal shut down and disruptions to its relining service through management of the planning/scheduling and job related controls in close consultations with the mining operators. Cost-efficiency is also managed through utilisation of lower labour overhead provided by its Papua New Guinea (PNG) trained and certified relining and maintenance crews, combined with optimised management. This labour /management ratio combined with an operating environment where most of the specialised relining machinery and equipment is provided by the mining operator, ensures that WGCL maintenance and servicing costs are minimised.

WGCL contractor capabilities

Relining maintenance & servicing

Training/safety services

Labour services

• Sag/ball mill relining • Gyro/cone/jaw crushers • Rubber lining/re-‐ coating • Mill relining training • Issue based risk assessment • Safety JSA's

• Project Managers • Trade qualiDications • Operator certiDied • General labourers

Mill relining services are a highly specialised maintenance program requirement for the mineralsbased mining industry and form the critical path for shut down schedules due to the potential cost impacts through delayed operational disruptions. New mill relining technology like the Russel Twin 8 (RME-Australia), which uses two relining machines in one unit, has enabled a 12

reduction in average mill relining time to below 50 hours per mill, which is providing costeffective benefits to mining operators. This technology has been adopted mainly by the South American minerals-based mining industry and with one operator in Australia to date. Modern liner materials are also incorporating more rubber like ‘poly-met’ or metal-faced rubber linings, which offer benefits for higher throughput, lighter, weight for relining operations and make less noise. Other technology enhancements reducing costs and improving mill performance are specific software packages like Milltraj and MillSoft, which provide detailed mill performance analysis to enable optimised mill processing outcomes.

WGCL service dimensions

Technical capabilities

Cost-‐ effective services

Safety and training management

Heavy plant & equipment maintenance

Relining training / safety management WGCL combines its specialist mill relining contracts with added training capabilities in all operational and management aspects for heavy plant relining processes. In this capacity WGCL has partnered with its principle mine operator OK Tedi (OTML) to develop and deliver this program to both existing crews and to induct new labour participants from PNG into this specialty focus career. This practice is common for specialist reline firms with Pacific Relines (Australia) and TME Group (Australia) both offering training as part of their business lines focus. Other participants in the mill relining industry including Metso (Finland) the global leaders in mill and crusher manufacturing as well as firm like RME (Australia) who specialise in manufacture of all relining machinery. These firms incorporate this service aspect into their core business in order to provide client and user support for their installed plant and machinery. WGCL is also required to comply with existing OHS regulations to develop and implement safe work practices throughout its maintenance operations and has developed comprehensive safety management plans and reporting outputs to provide protection for its crews and assurance to its mining operator clients (Refer Appendices â&#x20AC;&#x201C; 2.1 WGCL Safety Management & Reporting).

WGCL relining training program

Labour hire WGCL has recently added a labour hire service to its business portfolio with a growing database of general trades and technical skills offering project, construction and general labour services to clients throughout PNG. This business is managed through its operations centre located in Port Moresby, PNG. Although PNG is a small labour market it is still a highly competitive one due mainly to the current PNG LNG construction phase that has increased the labour demand in PNG and consequently drawn many international recruitment firms to service this project. The PNG business environment is currently experiencing severe labour shortages due to the demands of the PNG LNG project, however this also has been identified by many CEO’s in PNG as being a systemic issue due to the low participation rates in higher education and technical skills training throughout the local population. Due to the projects National Content Plan there have also been numerous Representative Land Owner Companies (Rep Lancos) that have also established a presence in the labour market in PNG to service the project. These companies target the labour hire market for both PNG LNG project works and other local area construction projects. In addition it is also common for PNG general construction firms to compete in this market. This effectively creates three labour hire providers within the PNG projects industry, Rep Lancos, general construction firms and dedicated recruitment companies.

PNG labour hire market providers

Recruitment Dirms: JD Wokman PaciDic Manpower

Rep Lancos:

Hides Gas Development Laba Holdings

Construction Dirms: Curtain Bros Hornibrook

2.2 Market Analysis

Mill relining market The mining mill reline market is characterised by four broad levels of industry participants starting with the heavy mill and crusher manufacturers like Metso (Finland), who also provide relining and associated maintenance services to support their installations. The second tier participants are both specialist mill-relining firms who also manufacture relining machinery like TME Group (Australia). Lastly there are the purely specialist relining contractors like WGCL who focus on the relining of the mill interiors and associated crusher and related process. Also a part of the relining industry but not a direct competitor in the mill relining contracts market are the relining machinery specialists like RME (Australia) who manufacture mill relining machines and line handlers and provide both training and site based maintenance to support their installed products.

Mill relines market participants

Mill relining maintenance / training

Mill plant manufacturer (Metso)

Mill relining maintenacne / training

Mill relining specialist & relining machinery manufacturer (TME)

Mill relining maintenance / training

Specialist mill reliner (WGCL)

PNG relining market Workforce Group of Companies Ltd (WGCL) supports the minerals-based mining operators throughout Papua New Guinea (PNG) in providing full lifecycle services to their client’s mills, crushers and other high wear plant and equipment relining and maintenance needs. Specifically WGCL targets the processing operations phase for mineral extraction within the mining infrastructure assembly including crushing (gyro, cone, jaw), grinding (SAG /Ball mills) and flotation (tanks) plant. The mining operators form the client side customer base for WGCL relining contract business and in particular the processing plant facilities management award and oversee the relining and maintenance services. This level of the mining structure is operational and production focused as opposed to higher management levels. WGCL in this interface with the mining operators also liaise closely with safety and project controls functional teams as these contracts occur during planned shut downs which form the critical path scheduling program and require total safety compliance and reporting. WGCL currently dominates this market having replaced competitor Pacific Relines from all existing PNG mining relining contracts. The other former competitor in the mill relining market in PNG is TME Group and with Pacific Relines also has a base located in Cairns (Australia).

WGCL customer segments

Mining Operators: Overall customer management focus for WGCL (OK Tedi, Porgera, Lihir, Hidden Valley)

Grinding Operations

Crushing Operations

Main customer management area for WGCL Liaise with grinding and crushing operations supervisors Undertake reliing and associated maintenance Conduct relining trainnig Safety Provide job risk and JSA reporting

Project contols

Liaise with shut down planners

Implement job controls

Mill relining is estimated to occur once annually with a typical contract lasting 4 days at a cost around K3million per SAG mill and estimated K1.5million per Ball mill. There are currently five large-scale minerals-based mining operations in PNG (OK Tedi, Porgera, Lihir, Hidden Valley, Ramu), which provides an estimated contract base around K24million annually (exc. Ramu) (Refer Section 2.3 Table-WGCL relining market estimates). WGCL has secured relining and heavy maintenance contracts with four of these operations which it has total market share and this is estimated to be around K8million in annual contract business based on WGCL costefficiencies which has lowered their total relining costs per mine site to around K1million p.a. per SAG mill and estimated K0.5milion p.a. per Ball mill.

WGCL –PNG relining market

WGCL K8m

Total PNG K24m

(Refer Table Section 2.3)

PNG labour hire market PNG infrastructure development (Public Investment Program) budget for 2012 provides K5.27 billion over the next five years (2012-2015) with nearly K3 billion allocated to the Department of Works programs. This agency represents the bulk of national infrastructure project opportunities mainly through their road works maintenance and construction programs with 2013 allocation around K800 million. (Refer Appendices – 2.2 Tables – PNG Development Budget 2012). Other notable allocations are for Port Moresby sewerage and Lae Port development (K600 million project -China Harbour Engineering) through the Independent Public Business Corporation and K180 million for the 2015 Pacific Games. 18

This presents significant labour hire opportunities over the next five years (2012-2015) for construction, project support and general labour provision to the EPC’s and other delivery agents. The labour hire market in PNG is comprised of three overlapping providers, traditional recruitment companies, Rep Lancos enterprises and PNG general construction firms (Refer Section 2.1 –PNG labour hire market providers). WGCL has developed its labour hire business line to participate in the national infrastructure development projects and private sector construction opportunities across PNG and in the Western Province in particular. With the PNG LNG construction phase nearing completion in 2013 the bulk of these labour hire opportunities will come from the PNG governments Public Investment Program (PIP) that spreads township and rural infrastructure development opportunities across the national government portfolio (health, roads, schools). Another source of labour hire opportunities in PNG is with the mining industry and in particular through their sustainability programs where companies like OTML are obliged under the MOU conditions, to invest in community infrastructure developments for the affected communities. These include contracts for road transport, road maintenance, camp maintenance, catering and camp operation, provision of security services, plant hire and civil works construction. Peak mining-funded investment agencies like Papua New Guinea Sustainable Development Program (PNGSDP) form another market avenue for labour hire opportunities as these bodies implement broad ranging local and regional community infrastructure development projects.

PNG labour hire channels

PNG government • PNG Mid-‐Term Development Plan (2012-‐2015) K 5.27b • Dept of Works -‐ Allocated large portion -‐ K 3b (K 800m -‐Roads) • K180m -‐SP Games 2015 • K333m -‐ POM sewerage • K246m-‐ Lae port development

Mine operators • MOU/Development Agreements -‐Oil Search K50m p.a.-‐road works, civil works/constrction • OTML 2011-‐ K500m to local PNG contractors

Royalty investments • PNGSDP -‐ OTML royalties-‐K500m 2011 • PNGSDP -‐ PNG wide infrastructure projects -‐ K318m to date

• OTML 2011 -‐K18.5m for community development projects

• OTDF -‐ K680m since 2008 -‐ development projects -‐affected communities

• MMJV-‐ 5 Yr Community Development Plan-‐ spent K18m to 2010

• Lihir MOA -‐ K90m to New Ireland development projects

2.3 Industry Description and Outlook

Global relining market Relining maintenance is driven by the minerals-based mining industry where mills and crushers are used to process ore to extract precious minerals like gold and copper. Global mineral processing from copper mining operations are forecasted to increase over 80% from 2011 to 2017 with most of this increase occurring in South America predominantly and the rest in North America. Gold processing is forecast to grow around 50% for the same periods with the same nations driving this growth. Currently the global minerals-based mining production is concentrated across Australia, South America, Africa and North America with extensive mining operations underway and being developed for processing iron ore, copper, gold, bauxite amongst the notable metals. For the relining market this current decade 2010-2020 presents major growth opportunities in servicing this mining expansion as the processing phase especially mill maintenance is a critical operational performance area. African based mining operations especially have cited mill performance and associated disruptions as having major impacts on overall mine outcomes recently.

PNG minerals-based mining Currently there are five large scale minerals-based mining operations in PNG which present the entire market for the crusher and mill maintenance business which WGCL has the dominant position, having secured all bar Ramu nickel mine (exc. Simberi). Currently WGCL has ongoing relining and associated maintenance contracts with its original client OK Tedi Mining Ltd (OTML) that it secured around 2010 and has since added Lihir, Porgera and Hidden Valley mine operations to its PNG contracts portfolio. Each of these operations has different remaining life spans with OTML scheduled to cease operations around 2013 subject to mine continuation plans which will extend the mine life to around 2022. All these mines process copper and gold predominantly with Ramu mining mainly nickel and all have long mine lives and world-class deposits.

The PNG minerals-based mining operations currently has a combined estimated remaining life of 45 years and based on known number of mills per mine site this represents at 2012 costs (unadjusted) a potential market around K253.5 million in mill relining business over the next 20 years. WGCL has gained majority market share in the mill relining market in PNG based on cost leadership strategy through lowering significantly its labour overheads in conjunction with operational/planning efficiencies which has enabled WGCL to lower its per mill maintenance times, adding further to lower contract costs. This represents a potential market for WGCL valued at around K79 million over the remaining life of the existing mining operations and based on their lower contract costs around a third of the industry standard (K253million).

WGCL relining market estimates

Current mining operations

Process mills

Current market value (K mill) p.a.

WGCL contract value (K mill) p.a.

Remaining life

Potential value (K mill)

OK Tedi(PNGSDP)

1 SAG; 2 Ball

6.0

2.0

2013 – 1 yr.

6.0

Porgera(Barrick)

2 SAG; 3 Ball

10.5

3.5

2023 – 11 yrs.

115.5

Lihir(Newcrest)

1 SAG; 1 Ball

4.5

1.5

2044 – 22 yrs.

99.0

Hidden Valley(MMJV)

1 SAG

3.0

1.0

2023 – 11 yrs.

33.0

Ramu (Ramu NiCo)

(unknown)

Simberi (St Barbara)

1 SAG

(unknown)

TOTAL: Notes:

K24m

K8.0m

45 yrs.

K253.5m

1. SAG mill K3m p.a. Ball mill K1.5m p.a 2. SAG mill: estimated relining cost K1million p.a. for WGCL Ball mill: estimated relining cost K0.5million p.a. for WGCL 3. Unadjusted gross nominal costs -2012

There are other significant gold and copper mining operations currently under various stages of pre-construction development all with long life expectancies and significant mineral resources, which will add to the market growth for mill and crusher maintenance opportunities for the next twenty years in PNG.

PNG market growth - potential mine sites

Proposed mining operations

Province

Operator

Estimated start (from 2012)

Estimated life

Wafi-Golpu

Morobe

Newcrest/ Harmony (MMJV)

2019 – 6 yrs.

2045 – 26 yrs.

Frieda River

West/East Sepik

Xstrata/ Highlands Pacific

(Pending BFS/ Govt Approvals)

20 yrs.

Yandera

Madang

Marengo

(Proceeding to FS)

20 yrs.

Mt Kare

Southern Highlands

Indochine

2015 – 2 yrs.

2022 -8 yrs.

Woodlark Island

Woodlark

Kula Gold

(Ending FSnearing EPC award)

5 yrs.

Imwauna

Milne Bay

PNG Gold

2015 – 2 yrs.

(unknown)

African mineral market African minerals-based mining outlook presents significant opportunities as this region has strong growth across all metal mining production and therefore will remain a highly targeted market for the mill relining contracting sector. As a region Africa ranks one of the largest minerals-based mining markets with extensive operations throughout South Africa and West Africa and between these regions supply around 20% of global gold and forecasted to provide 10% of world iron ore by 2025. (Refer Appendices- 2.3 - Table African mineral miners).

2.4 Competitive Strategies

Mill relining market WGCL has benefited from a business strategy focused on cost-leadership enabling lower than industry average labour costs through utilising predominantly PNG crews in both labour and increasingly supervisory roles. This has provided the Group with a major competitive advantage allowing it to secure reline contracts in other markets including Asia and Africa. The other source of the groups competitive advantage comes from its global learning acquired through its exposure to different markets and mining operations that has enabled WGCL to incorporate technical and process advantages in its maintenance and training business lines. The mill reline market faces density due to the multiple layers of competition that exists with mill plant manufacturers, reline machinery manufacturers and reline-specific contractors making up the competitive structure. This constrains the market growth potential for lower tier participants like WGCL as the top tiered participants like Metso (Finland) or REM (Australia) have strong competitive advantages due to their scale and diverse business lines across heavy plant and machinery. Metso is the global leader for mill and crusher manufacturing with plant installations across the globe for minerals-based mining operations. REM is the global leader in specialised reline machinery and tools with sales across the mining market. Metso and REM are able to place their reline plants and machinery into different markets and back this up with specialist user training including relining procedures. For WGCL to grow its reline maintenance business it is recommended that the Group seek to forge strategic alliances with identified participants like Metso or REM to grow its mill relining and training business. Strategic alliances like this will provide WGCL with ease of market entry to their minerals-based growth regions of Africa in particular. Partnering with market leaders like Metso / REM will ensure early mover access to the mining operator who normally negotiates its process infrastructure requirements at the early procurements planning phase. Aligning with globally recognised firms such as these will allow WGCL to benefit from their experience, resources and expertise in all aspects of the mill and crusher processes including training resources/facilities, access to required machinery, plant and their global mining client base. In turn WGCL is able to add value to the alliance using its lower cost labour force that is trained and experienced, to provide the alliance with competitive advantages for reline maintenance 23

contracts. WGCL is also able to provide its global learning advantages to the partnerships in their detailed understanding of different mill and crusher maintenance requirements amongst their client base that would enhance the manufacturing designs or training programs that Metso /REM may incorporate into their operations. A second component to the alliance is for building competitive strengths around training collaborations which will provide WGCL with access to world class techniques and resources to strengthen its reline training provider capabilities in the broader Asia/South Pacific region. Partnering with Metso will provide WGCL with opportunities to add crushing maintenance processes to its training capabilities and partnering with REM adds the ability to incorporate cutting-edge reline machinery (Russel Twin 8) to its training programs. Ultimately such strategic alliances could enable WGCL to position itself throughout the Asia/South Pacific region as the premier provider of mining- process maintenance training programs. Ultimately through its training business WGCL is able to boost its skilled reline maintenance crews as it prepares for major growth.

METSO: Advanced training/ global reach

REM: Reline machinery training/ markets WGCL: Labour advantages/ Sth PaciDic markets

WGCL Strategic Alliance

Labour market Forming similar strategic alliances or local partnerships with the other market participants in the PNG labour hire sector will increase the reach for WGCL as it enters infrastructure development opportunities. Seeking qualification as preferred supplier or to nominate for the governments tenders will enable WGCL to directly compete with other participants for project business. The government has privatised agencies like the Independent Public Business Corporation (IPBC) that WGCL could seek to form such an alliance with to increase their market reach for investment project business and to leverage from the stronger financial and industry base of this type of partner. Another channel to consider aligning with are Rep Lancos like Laba Holdings who represent Gulf Province and are an umbrella company who would provide WGCL with increased industry access to their established networks and client base. Rep Lancos like Hides Gas Development Corporation (HGDC) are seeking alternative enterprises to ensure continuity especially for their workforce and this will provide WGCL with a labour resource experienced in PNG project environments. Strategic alliances provide business synergies like shared risks for entering new projects, shared learning from past operations, shared experiences and expertise, all of which WGCL and its selected partners could provide to strengthen the prospects for success. Entering into alliances with other mining operators and explorers who provide for community investments like Oil Search or Royalty Trusts like PNGSDP also provides WGCL with strong networks for access to their development projects. Seeking to nominate on their preferred supplier lists will be essential to enabling such an alliance. Short term WGCL may need to focus purely on labour hire provisions to these partnerships however WGCL has advantages of a large list of registered skilled labour force to provide the alliance with.