BE.Mining

INCLUDING

goldcorp cerro negro: cerrejÓn: kpmg: ISSUE No.12

Special issue:

The Investment edition including insight from the mining industry’s leading members

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event showcase: mines & money london 2013

SCHAEFFLER Schaeffler, with its INA, LuK, and FAG brands develops and manufactures precision products for everything that moves—in machines, equipment, and vehicles as well as in aviation and aerospace applications.

Innovations from Schaeffler make an important contribution to saving energy and conserving resources and, at the same time, increase performance and competitiveness of customers’ assets across the globe.

Heavy Industries (Subaru) and Nissan.

Toyota Motor Europe expressed their high level of satisfaction by awarding Schaeffer with “Certificate of Recognition”, whereas in the Ford Motor Company in the USA honoured Schaeffler for excellent cooperation between the two companies. By presenting the World Excellence Award 2012, Ford recognized Schaeffler’s ceaseless efforts towards achieving excellence that significantly contributed to their success. In For example, FAG split spherical roller Japan, Schaeffler has received the Nissan bearings simplify and speed up bearing Global Supplier Award for development of replacement, particularly in areas that the LuK multi-link chain for continuously are difficult to access such as shafts with variable transmission (CVT). Among the multiple supports. With over 20 validated series of awards received in China is the coating solutions—down to just a few Excellent Supplier Award from Shanghai’s microns—Schaeffler’s Centre of Competence Sanden Behr Automotive, which recognized for Surface Technology has developed a Schaeffler for high technological expertise, modular system to offer bearings with longer excellent quality and service. In South life for every type of requirement.

America, our INA and FAG brands ranked among the best suppliers for Brazil’s The Aerospace business operates under automotive replacement parts market by extremely high safety requirements. When receiving the Best of the Year Awards from it comes to engine bearings, leading aircraft Sindirepa. With a global footprint matching manufacturers place their trust in Schaeffler. customer requirements across the world, Schaeffler supplied the main shaft bearings for Schaeffler made its mark in Africa as well the Airbus 380’s engines as well as numerous by securing the first prize in General Motors rotationally symmetrical components, which South Africa’s Drive Train prize category. feature up to five different coatings.

These numerous awards around the Schaeffler received numerous awards world testify to Schaeffler’s power from customers all over the world. These of innovation, quality of service, and awards serve as a constant incentive for performance that helps the company Schaeffler to remain the top supplier of offer the best products and solutions to high-quality precision products for global customers around the world. customers. Among this year’s achievements are recognitions from Toyota, Ford, Fuji www.schaeffler.com

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Issue No.12

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FEATURES: 12 operations

How to build a mine for the Highest Return

Examining Gerald Whittle’s approach to optimizing a mining operation for the highest return on investment.

16 interview

The M&A environment in Mining

Rama Ayman, has been enjoying his new role as Partner and Global Head of KPMG’s Metals & Mining Corporate Finance practice.

22 mining

Growth in a time of scarcity The mining industry faces its most challenging set of problems for a decade: participating companies need to be a lot smarter and ready to take advice from the specialists, emphasizes a new guide from KPMG.

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contents

event showcase: mines & money london 2013 26 investment

Opportunities on the horizon With 2013 fraught with uncertainty, several recent developments provide cause for optimism about what 2014 may bring.

32

32 event preview

mines & money london 2013 Join over 3,000 investors, financiers, brokers and mining developers.

36 Potash Ridge Growing green

Potash Ridge’s Blawn Mountain deposit is being pushed forward by the market and an enthusiastic team in a supportive jurisdiction.

46 Coastal Gold Grade is king

Coastal Gold’s Hope Brook property located in Newfoundland is rapidly developing towards becoming a very significant producer.

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MORE >>> BE Mining

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Issue No.12

Continued >>>

56 Mariana Resources Leading South American exploration

58

The work of Mariana Resources’ highly experienced team is allowing it to transform its developing discoveries into robust projects.

58 21st North

The prospect of partnership Greenland is a territory long on interest but short on experience – experience is exactly what this company brings to the party.

68 standard bank

68

setting the standard

How Standard Bank plays a key role within Africa’s emerging markets and its ongoing commitment to the continent.

78 Base Resources

The path to production

Base Resources’ Kwale mineral sands operation is a game changer for both the company and the Republic of Kenya.

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contents

90 gold: 90 Goldcorp: Cerro Negro Cerro Negro ready to yield

Goldcorp is the fastest-growing, lowest-cost senior gold producer. Its Cerro Negro gold and silver mine in Argentina is on the cusp of producing its first gold.

108

108 Caledonia Mining Corporation The golden touch

Stefan Hayden, Chief Executive of Caledonia Mining Corporation, explains how a combination of exciting assets and a highly-skilled, passionate workforce and management team have created one of Africa’s leading low-cost gold producers.

coal: 122 Cerrejón

The maximum possible

122

A mantra of Cerrejón is we do the maximum possible not the minimum necessary: in the matter of CSR and environmental management the rest of the world has little to teach Colombia.

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Issue No.12

138

service providers: 138 Lubritene (PTY ) Ltd Growing on goodwill

Lubritene is a South African registered company, specialising in the manufacture of high performance greases, compounds and oils: a statement that barely describes a company that enjoys remarkable symbiosis with its clients.

150 Global Sourcing & Supply (GSS)

Delivering quality of life where it’s needed most

150

Global Sourcing & Supply (GSS’s) multi-disciplined approach to business has allowed it to become one of the foremost providers of complete site support services and operations in all of Africa.

160 Allied Mining Services Limited Bringing the world to East Africa

With a history of 13 years in the mining industry and two generations of experience in the procurement sector, Allied Mining Services Limited continues to be a key contributor to East Africa’s growth.

172

172 ADP Group

delivering engineering expertise For the past 16 years ADP Group of Companies (ADP) has played a meaningful role in some of Africa’s most interesting mining projects.

182 Pesco

The tools for the job

Over little more than a decade Pesco has emerged as a major player in the Chilean economy, supporting mining and a host of different industries.

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196

regional focus: peru 196 Antamina

Reaching new heights

Operations Vice President, Jorge Ghersi discusses the continuing development of Antamina, site of the largest mining investment programme in the history of Peru.

208 Sociedad Minera El Brocal Powering the growth of Peru

Sociedad Minera El Brocal’s activities and achievements are prime examples of what makes Peru such an exciting and important epicentre for mining in South America.

228 SRK Consulting – SVS Ingenieros Prospering in Peru

208

Since merging with SRK Consulting in 2011, SVS Ingenieros has consolidated its Peruvian market share and diversified its range of technical services.

mining Directory: 236 Cardno BEC

shaping the future

236

238 kengas

Reliability in transport

240 planet projects engineering service

242 princeco

mining suppliers BE Mining

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How to build a

Highe$t

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A

s we recently explained, the practice of “high-grading” where a miner extracts only the high-grade ore from a deposit has been widely adopted in the mining industry over the past 10 years.

The method increases short-term cash flows, but can harm the profitability of a mine over its lifetime.

As an investor, you want the miners in your portfolio to deliver the highest overall return possible.

On this subject, we received a helpful response from reader Mark Jones, a Partner at mining consulting firm Whittle Consulting. He says many mining companies fail to optimize operations for the highest return on investment.

The damage can be caused by wellintentioned, highly proficient technical experts who are applying a narrowfocused approach to the overall mining operation.

They may focus on the individual technical challenges, sometimes destroying part of the shareholders’ value in the process.

In a paper titled Misguided Objectives that Destroy Value, Gerald Whittle, the

“The fact is that most planning decisions are linked in terms of the consequences they have on the overall outcome, so many complex trade-offs must be considered” 14 |

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Managing Director of Whittle Consulting, explains how this happens. He makes some useful points for investors in mining companies. Designing a mine involves a lot of ‘moving parts,’ he explains: “The fact is that most planning decisions are linked in terms of the consequences they have on the overall outcome, so many complex trade-offs must be considered.” These include the time value of money, the opportunity cost of a decision and planning for a depleting resource.

So what should you look out for? To paraphrase Mr. Whittle: The mine plan generally attempts to extract as much economic ore as possible; reduce the total expenditures of building the mine; maximize the lifetime of the mine; and minimize the amount of metal lost during the recovery process (where the metal is separated from the host rock).

The problem is that a mine engineer might take on these technical challenges as ends in themselves, instead of maximizing cash returns. As shareholders, our ultimate concern is our return on investment.

• Size of the deposit: The size of an ore deposit generally means the amount of tons that contain a certain percentage of base or precious metals. The problem is that the total number of tons that are worth mining is not necessarily the same as the optimal number for the best economics. Sometimes the overall return will be higher without retrieving certain portions of the mine.

But the idea of 60% or 80% retrieval of economic tons can be disconcerting to management.

Operations

• Mining costs: Lowering operating costs can damage the overall economics of a mine. For instance, larger equipment can make mining cheaper per ton, but won’t be as discerning of what portions of the ore is worthwhile to extract. Simple pit shapes can make operations run more smoothly and cheaply, but also can result in mining useless portions of the mine. In addition, mining operations account for only 15% of the total cost of the value chain, so mining companies should take into account the effects on the costs of the downstream activities.

• Maximizing the life of the mine: Extending an operation means the engineers and workers will be employed longer, and governments will enjoy royalties over a longer period. But, especially taking into account the time value of money, extracting the ore quickly can be preferable in order to maximize shareholder returns.

• Maximizing recovery: Getting the maximum metal from the ore seems to make sense, but there are issues to consider. Increasing recovery for certain types of host rock can increase costs faster than the increase in revenues from the higher recovery. Increasing recovery usually involves leaving the ore at the processing plant longer. This ‘residence time’ can worsen what is often already the main bottleneck in the operation.

The key take-away from these points is that maximizing metal or profit per ton is not the objective – maximizing the cash margin produced per day is.

Another point is that operations

“Shareholders should make sure that technical challenges and operational ease alone aren’t driving management’s decisions” engineers prefer to keep everything steady over the life of the mine. It’s easier to run if the same amount of ore comes out each day, and the same amount is processed. But these are not ends in themselves. As Mr. Whittle explains: “Any mining/processing plan that has constant stripping ratio, mining rate, cut-off grade, or plant configuration cannot be optimal, and is therefore subject to improvement.”

“Using simplified, seemingly wellmeaning local objectives is not satisfactory, as these can be counterproductive to the overall outcome.”

If you invest in companies who are building or designing a mine, beware if management decides to structure the operation to attempt to address one particular technical consideration.

Shareholders should make sure that technical challenges and operational ease alone aren’t driving management’s decisions. Returns can suffer substantially if management forgets the end goal is to make money for shareholders. You want to see big cash flows early in these capitalintensive projects.

Contact For more information about Sprott Global visit: www.sprottglobal.com

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Interview

The environment in Mining Since his appointment as Partner and Global Head of KPMG’s Metals & Mining Corporate Finance practice Rama Ayman, a vastly experienced investment banker and M&A specialist has been enjoying his new role Words by John O’Hanlon Research by Richard Halfhide

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O

ver the past four years, KPMG firms have successfully emerged as a leading force in mid cap M&A, having built up a significant network of local M&A teams and investment banking professionals, hired from major investment banks around the world. Says Rama Ayman: “I joined KPMG because it has an extensive presence in metals and mining globally across many functional areas, with a strong commitment to build out its M&A advisory capabilities in this sector.”

Rama Ayman is the author of the section entitled M&A and financing: replenishing a diminishing asset base in KPMG’s recently published guide Growth in a time of scarcity, the first in a series that will discuss how mining companies can best navigate the asset life cycle. Over the last 20 years the common thread uniting his work has been mergers and acquisitions in the mining and metals sector, and he shared with us some of his personal insights into the market.

No reader of this article will be in much doubt as to the current state of affairs.

“Commodity prices have come down over the past few months – I can’t think of an exception. For a while gold bucked the trend but even that followed the others this year. Costs on the other hand have continued to rise. I am not just talking

“The squeeze in margins has made the credit markets nervous about the mining sector in general” 18 |

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about labor, energy and equipment costs: compliance to ever more stringent regulations on environmental and social performance and the rise of resource nationalism have not helped. The sector has faced soaring cash costs leading to significantly reduced cashflows and weakened balance sheets. Over the last year, five trends have emerged – trends I can see continuing in 2014.”

The first of these is that the junior mining companies are no longer finding it so easy to get cash to develop their projects. “The squeeze in margins has made the credit markets nervous about the mining sector in general, so credit is not easily available, and that has resulted in a change in ratios the lenders will accept. They want more equity, more potential cash flow, so the ratio of debt to cash flow has come down and the ratio of equity to debt has gone up.” Companies have to show more cash flow generation than before and put in more equity than before, he says, and at the same time the IPO market for mining companies is pretty much closed as investors have become much more cautious about participating in mining sector offerings.

Interview

With very few exceptions, junior mining companies are finding it a challenge to fund their projects. Their stock price is on the floor, credit is not available and any share issue has to be heavily discounted. So what can they do? “The only realistic solution most of them have is the M&A market. Basically, bringing in a strategic investor to help them develop their project.”

This, he says, touches on the second trend that he has identified: namely that the ‘usual suspects’ are not in the game as much as they were previously.

The large mining groups like Rio Tinto, Barrick, BHP, Vale, Glencore and others are themselves struggling with reduced margins. “They themselves made a lot of acquisitions in the good times, frequently through leverage, and they are having to focus on margins, cost optimization and the like; and on the other hand, to de-leverage they are selling non-core and high cost assets. They have focused on portfolio management and the cost issues and they are not putting management time and resources into making acquisitions.

“The well-tried model whereby a

Five trends in minerals and mining 1. A squeeze on access to development finance 2. The majors are divesting 3. Asset undervaluation attracts new entrants 4. Offtakers are thinking long 5. Megaprojects are becoming collaborative

“I think the private equity investment groups and captive funds are forming an important group of buyers” company would obtain a license, and develop it before selling it on to a larger company and so on until it came to the attention of an owner with the resources to take it into production is now in question, I think. I do not see many big mining companies going out and buying junior miners’ assets at a time when the big guys are thinking hard about what could be put into that non-core asset basket and basically making it as large as possible so they can de-leverage even more.”

The third big trend is where we depart from the depressingly familiar. New players are watching this scenario. “They are thinking this could be a good time to buy assets that are so much cheaper than they were before. So there has been a rise in the number of new entrants.

These are captive investment funds and private equity funds focused on mining - and the number of those is increasing.

On the other hand some of the more traditional large private equity funds are thinking opportunistically this might be a good time to come back to the metals and mining space and start making acquisitions. So I think the private equity investment groups and captive funds are forming an important group of buyers.”

Fourthly, the offtakers are changing their spots, observes Ayman. “The large trading companies from Japan, Korea,

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China, and Switzerland have developed a strategy over the last few years of going long on assets. Originally they were just traders and gradually they realized that the added value of just trading was diminishing. That trend is still continuing and I see them continuing to buy shareholding in the assets in order to get attractive long term offtake agreements.”

Finally, the very large projects – the kind that are vital to regional GDP – are being approached more cautiously.

“Because of the environment we find ourselves in there are a number of very attractive mega projects with capex well above US$1 billion. Previously a big mining company would do it by itself but now the costs are getting too high, the risks more significant. I think that going forward more of them are going to look for joint venture partners and other strategic partners or financial backers to develop the mine.” He expects to see the model that has worked well in the O&G sector becoming more common in mining.

All of these trends are driven by the tightening margins thanks to reduced commodity price and higher costs.

However Rama Ayman identifies another

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“The large trading companies have developed a strategy over the last few years of going long on assets” factor which has its own impact on M&A plans. That is the evident rise in many jurisdictions of resource nationalism.

“Many mining companies in several countries are witnessing backlash from governments and communities who want a greater share of perceived profits. Their demands are becoming louder around four things. One is insisting of tighter environmental standards. Two is that they are requiring adequate CSR. In some cases a big mining project will form 20 or 30 percent of the country’s GDP or exports and they are demanding proportionate levels of social engagement.

“Of course these things come at a cost.

Additionally they are demanding a higher level of shareholding in the operation either for the government directly or for local parastatal or private enterprises.

And fourthly they are looking to secure more of the downstream value chain but insisting on local beneficiation.”

These demands come at a difficult time for mining companies who are suffering from much lower margins and cash flows. Rama Ayman sees that during the coming one or two years we will see a marked increase in transparency for companies to show exactly how their money is being spent, and how much of their profits are being shared in various ways with the local governments in the form of taxes, royalties, dividends, CSR

Interview

expenditures and other investments in local infrastructure.

Rama Ayman also believes that there would be a far greater need for multistakeholder approach to developing large mining projects – this will require far greater consultations between companies, governments, communities, employees and shareholders.

The short term may be dire, the medium term uncertain, but in the long term Rama Ayman remains bullish about the industry he has been engaged with for so many years. “I think what is happening now is actually good for the mining industry in the longer run! It is having to get more cost efficient and better set the stage around local partnerships and their various stakeholders. Subsequently, they will be more successful in the upcoming cyclical recovery.

The long term supply-demand balance continues to point towards a bullish scenario for most mining commodities.

The raw materials for steel, iron ore, coking coal, and manganese are closely linked to construction and construction is at last beginning to recover in the USA and other economies. Copper is linked to

“I think what is happening now is actually good for the mining industry in the longer run!” infrastructure. China for example wants to be 70 percent urban by 2040. Achieving that goal will require an increase supply of copper!” China, he points out, has a long way to go to reach parity with the west, and then there is India, which may be on slower burn but is showing an upward trend.

Never in one place for long, Rama Ayman is clearly revelling in the access to clients across the world as they grapple simultaneously with falling commodity prices, higher cash costs, lack of easy access to traditional sources of funding and rising resource nationalism. “Developing successful major mining projects in most countries on a timely basis and on budget while adequately addressing the conflicting requirements of their various stakeholders has become much more complex. I think that is where advisers with a local presence in these mining jurisdictions like KPMG can add a tremendous amount of value.”

Rama Ayman Following 12 years investment banking experience including Bankers Trust [later acquired by Deutsche Bank] in New York, Barents Group in Central Asia and BNP Paribas in London where he was Director of Corporate Finance, Rama Ayman joined Arcelor in 2002, becoming Corporate Vice President of M&A, and playing an active role in many acquisitions, divestitures, and JVs including the merger of Arcelor and Mittal in 2006 to create the world’s largest steel company.

Over the past six years, Rama has been Managing Director of Hatch Corporate Finance and Senior Advisor to The National Investor, where he led numerous metals and mining M&A advisory mandates across most regions of the world before joining KPMG as Partner and Global Head of Metals and Mining in October 2012.

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Growth in a tim

The mining industry faces its most cha participating companies need to be a from the specialists, emphasi Words by

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John O’Hanlon

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Mining

me of scarcity

allenging set of problems for a decade: lot smarter and ready to take advice izes a new guide from KPMG

Research by

Richard Halfhide BE Mining

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I

f the title is a nod to Gabriel García Márquez examination of how love can adapt in a time of ‘cholera’ KPMG International’s July 2013 guide, subtitled Managing transactions in the mining sector if less literary, seeks to focus on some of the strategies companies could adopt in managing their relations with the global trading realities, the investor community and the stock market.

A combination of demand from the east, dwindling mineral resources and rising costs is reshaping the mining sector. As mining companies attempt to manage their asset life cycle in this new landscape, their three main strategic priorities are growth, performance and compliance. “Whether organically or (increasingly) through mergers and acquisitions, growth is a perennial objective in an industry where assets continually erode, however, in the current context of falling commodity prices and rising costs together with scarcity of available cash for acquisitions, mining companies are forced to consider portfolio management and cost optimization as their top priorities over their traditional growth objectives,” says KPMG’s Global Head of Metals and Mining Corporate Finance.

Few would disagree. The guide addresses issues frequently faced by readers of this magazine: geographic expansion, M& A and financing (written by Rama Ayman, KPMG’s

“Growth is a perennial objective in an industry where assets continually erode” 24 |

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Mining

“As mining companies seek targets in unfamiliar parts of the world, they will need strong local knowledge to form relationships and cope with foreign regulations and cultures” Global Head of Mining and Metals Corporate Finance, who expands his analysis in an exclusive interview for this issue) tax structuring, the key role of due diligence, and one frequently neglected area, the need for companies involved in M&A activities to manage integration – and indeed separation – issues in a planned and proactive way instead of tackling them post-event.

Authored by a picked group of KPMG’s country and sector leaders it demonstrates the global reach and depth of experience that the global professional service group can command. Underlying the practical advice it contains is the message that things are definitely not getting simpler in the way the world’s commodities markets work and interact.

It is getting increasingly difficult for the majors, with all their financial and IP clout, to navigate the international cross currents and local shoals they encounter: how much more perplexing is it, then, for junior companies to find their way?

The conclusion? They need someone with local knowledge, global reach, and real depth of understanding to support them in assessing financial risk and help them avoid expensive – and potentially fatal – mistakes. “As mining companies seek targets in unfamiliar parts of the world, they will need strong

local knowledge to form relationships and cope with foreign regulations and cultures,” KPMG warns. “A flexible financing package can help hedge against a volatile commodities market to achieve positive margins and improve shareholder value.”

Shareholders are increasingly asking mining companies to pursue a disciplined portfolio approach in line with their core competencies whether in exploration, mine development, or managing mature cash flow generating assets to enhance value for investors.

KPMG member firms often act as a long-term advisor to mining companies to help them optimize their acquisition and divestiture programs in order to leverage the client’s core competencies.

This guide is the first in a series that discusses how mining companies can best navigate the asset life cycle, and covers the five key elements of the transaction phase: geographic expansion, financing and mergers and acquisitions, tax structuring, due diligence and integration.

Full report To download the full report, Growth in a time of scarcity: Managing transactions in the mining sector.

Click here

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event showcase

mines & money london 2013

in association with:

Opportunities

Over the last twelve months the min turbulence and uncertainty. However, cause for optimism abou Words by

28 |

Event Showcase

Wil

Investment

s on the horizon

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W

ith more than 3,000 investors, financiers, brokers and developers set to gather at London’s Business Design Centre for Mines and Money London 2013, Europe’s leading mining investment and capital raising conference and exhibition, never will there be a better time to reflect on the state of the industry at present. More importantly how is the state of mining influencing investment in one of the world’s biggest and most economically influential sectors?

Few would argue against the view that the global mining industry has softened in recent times, an even perhaps best evidenced by Caterpillar’s recent announcement of redundancies at its Wisconsin based mining equipment factories. The truth is of course that it is just one of a number of mining companies to announce job losses in recent months.

To many, what we are witnessing are the results of the comedown from the global boom in metals and energy prices driven by the growth of emerging markets such as China. With high prices comes investment and sure enough the commodities boom brought with it the trend for companies to spend millions of dollars on opening new mines, expand old assets and upgrade equipment in

order to increase production. With such a whirlwind of activity occurring in a relatively short space of time it was inevitable that production would overshoot demand before long, the effects of which are now evident in the price of metals.

On the face of things there appears to be little to relish when it comes to the immediate future of the mining sector.

Indeed, for some the outlook for the mining industry in 2014 is one of limited activity. Nevertheless, there is evidence emerging that gives cause for optimism.

Effective cost-cutting policies being implemented by large multinationals across their project portfolios are starting to bear fruit by producing stronger balance sheets.

Perhaps most significant was the recent announcement by Anglo-Australian mining giant BHP Billiton that it had raised its iron ore production forecast in the wake of achieving record output in Western Australia between July and September of this year.

BHP’s statement came after that of its rival Rio Tinto, which posted better than expected third-quarter production across its commodities, with strong growth in energy coal and copper and record output at its flagship Australian iron ore operations.

“With such a whirlwind of activity occurring in a relatively short space of time it was inevitable that production would overshoot demand before long, the effects of which are now evident in the price of metals” 30 |

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African Barrick Gold’s Bulyanhulu mine

“Most significant was the recent announcement by Anglo-Australian mining giant BHP Billiton that it had raised its iron ore production forecast in the wake of achieving record output in Western Australia between July and September” Similar good news in the last month has come from African Barrick Gold, whose shares surged by more than ten percent after the company announced that gold output rose eleven percent year on year to 164,719 ounces in the September quarter. The company’s chief executive, Brad Gordon, added to the positivity by proclaiming that it now expects to exceed the upper end of a production guidance

range of 600,000 ounces for 2013.

The contrasting fortunes of Caterpillar and the aforementioned mining giants perfectly capture the state of the mining industry today. That of 2013 is one of volume and costs, but that is not to say that future investment opportunities do not exist, particularly for the right company, in the right place, at the right time and with the right business model.

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Mines and Mon

Join over 3,000 investors, financier Mines and Money London 2013 1-5 December 2013 Business Design Centre, London Mines and Money London is Europe’s leading mining investment and capital raising conference and exhibition, bringing together over 3,000 investors, financiers, brokers and mining developers, for up to five days of business matching, knowledge sharing and deal-making.

With 260 mining companies on display, some of the world’s largest natural resources fund managers in attendance, and a

packed programme of keynotes, market analysis, company presentations, panels and workshops, Mines and Money London 2013 is designed to reinvigorate the industry, with fresh investment and capital raising ideas and opportunities.

In 2013, the conference and exhibition expands to a 3-day (Mon-Wed) format, with a specialty investor day on Sunday (Canada & Australia Day) and optional workshop on Thursday (Practical strategies for cost cutting and efficiency). The newlook format provides attendees with more time to meet with industry colleagues and more chances to identify capital raising and mining investment opportunities.

New for 2013 …

• Exhibition extended by an extra half day to allow for additional vital networking time • Three day conference programme with a new ‘Commodities Summit’ on Monday • Enlarged exhibition with 260+ mining companies on display • Enhanced online meeting planner with a range of meeting spaces to meet your 1-on-1 meeting requirements • Structured networking with investor roundtable sessions and breakfast briefings

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ney London 2013

rs, brokers and mining developers

As always, Mines and Money London 2013 will provide: • Keynote presentations from mining’s leading investors, financiers and entrepreneurs • Dedicated investor invitation and vetting team to ensure maximum attendance from high quality mining investors • 100+ company spotlight presentations over four days

• In-depth panels and analysis sessions providing high-value market intelligence helping you find -growth opportunities in today’s volatile market • Great networking opportunities with drinks receptions hosted every night, plus the black-tie Mining Journal Outstanding Achievement Awards Dinner on 4 December 2013 Event Showcase

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events

KEYNOTE SPEAKERS James G. Rickards

Managing Director, Tangent Capital James Rickards is the author of the national bestseller, Currency Wars: The Making of the Next Global Crisis and a Partner in Tangent Capital Partners, a merchant bank based in New York. He is a counselor and investment advisor and has held senior positions at Citibank, LongTerm Capital Management and Caxton Associates.

In 1998, he was the principal negotiator of the rescue of LTCM sponsored by the Federal Reserve. His clients include institutional investors and government directorates. He has been interviewed in The Wall Street Journal and has appeared on CNBC, Bloomberg, Fox, CNN, BBC and NPR and is an Op-Ed contributor to the Financial Times, New York Times and Washington Post. Mr. Rickards is a visiting lecturer at Johns Hopkins University and the School of Advanced International Studies, has delivered papers on risk at Singularity University, the Applied Physics Laboratory and the Los Alamos National Laboratory and has written numerous articles on risk management. He is an advisor on capital markets to the Director of National Intelligence and the Office of the Secretary of Defense. Mr. Rickards holds an LL.M. (Taxation) from the NYU School of Law; a J.D. from the University of Pennsylvania Law School; an M.A. in economics from SAIS and a B.A. from Johns Hopkins.

John Hathaway

Senior Managing Director, and Co-Portfolio Manager, Tocqueville Asset Management Mr. Hathaway is a co-portfolio manager of the Tocqueville Gold Fund, as well as other investment vehicles in the Gold Equity Strategy.

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Mr. Hathaway also manages separately managed accounts for individual and institutional clients.

He is a member of the Investment Committee and a limited partner of Tocqueville Asset Management (www.tocqueville.com). Mr. Hathaway began his career in 1970 as an Equity Analyst with Spencer Trask & Co. In 1976, he joined investment advisory firm David J. Greene & Co., where he became a partner. In 1986, he founded Hudson Capital Advisors and in 1988 became Chief Investment Officer of Oak Hall Advisors. He joined Tocqueville as a Senior Partner in 1998. Mr. Hathaway has a BA degree from Harvard College and an MBA from the University of Virginia.

Michael Belkin Author, The Belkin Report Michael Belkin is President of Belkin Limited, a financial and economic forecasting firm, which counsels prominent hedge funds, pension funds, investment banks, mutual funds, institutional money managers and highnet-worth investors throughout North America, Europe and Asia. Mr. Belkin’s institutional advisory services are furnished via the weekly Belkin Report, which provides strategic forecasts for international stock indexes, industry groups, interest rates, currencies, commodities, emerging markets and economic indicators.

Mr. Belkin was a Vice President in the equity department of Salomon Brothers until 1992. His role was strategist in global macro proprietary trading, developing and applying innovative statistical forecasting models in a four man unit that managed the firm’s global proprietary trading equity book. Mr. Belkin studied finance and statistics at the University of California at Berkeley.

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Randy Smallwood

President and CEO, Silver Wheaton Randy Smallwood holds a geological engineering degree from the University of British Columbia, and is one of the founding members of Silver Wheaton. In 2007, he joined Silver Wheaton full time as EVP of Corporate Development, primarily focusing on growing the company through the evaluation and acquisition of silver stream opportunities. In January 2010 he was appointed President, and in April 2011 he was appointed Silver Wheaton’s CEO. Randy originally started as an exploration geologist with Wheaton River Minerals Ltd., and in 2001 was promoted to Director of Project Development, his role through its 2005 merger with Goldcorp. Randy was an instrumental part of the team that built Wheaton River/Goldcorp into one of the largest and, more importantly, most profitable gold companies in the world, and he is now focused on continuing to add to the impressive growth profile of Silver Wheaton.

Rick Rule, Chairman

Sprott US Holdings Rick Rule has been active in natural resource investing for thirty-five years. He is well recognized for his knowledge of the mining, energy, water, forest products, infrastructure, and agriculture sectors. A popular public speaker, Mr. Rule is a featured presenter at investment and industry forums and conferences around the world.

Mr. Rule is particularly active in private placement markets, having originated and participated in hundreds of debt and equity transactions with private, pre-public and public companies.

Mr. Rule founded Global Resource Investments in 1994. Global provides brokerage and

investment banking services to high net worth individuals, institutional investors and corporate entities worldwide. In 2011, Global was acquired

by Sprott, Inc., a public company based in Toronto, Canada that has in excess of $10 billion in assets under administration in the resource and commodity sectors.

Sprott, Inc. is a leading independent asset manager dedicated to achieving superior returns for its clients over the long term. The company currently operates through four business units: Sprott Asset Management L.P, Sprott Private Wealth L.P., and Sprott Consulting L.P. and Sprott US Holdings Inc.

Robert Friedland

Executive Chairman, Ivanhoe Mines For more than 20 years, international financier Robert Friedland has been a recognized figure among the leaders of the global financial sector and mineral resource industries who have influenced investment decisions and contributed to economic growth in established and emerging markets in Asia, the Asia Pacific Region, Sub-Saharan Africa and the Americas. Mr. Friedland is Executive Chairman of Ivanhoe Mines, focusing on advancing and developing three major mining projects in SubSaharan Africa. He led its successful initial public offering in October 2012 that raised CDN$306 million (US$308 million) from international investors in what was the largest Canadian IPO since 2010.

For more information about Mines and Money London 2013 visit: www.minesandmoney.com/london

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potash ridge

Growing green

Potash Ridge’s Blawn Mountain deposit in Utah has got everything going for it, pulled forward by the market and pushed forward by an enthusiastic team in a supportive jurisdiction

written by: John O’Hanlon research by: Richard Halfhide

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potash ridge Ross Phillips, COO and Jeff Hillis, CFO at the Blawn Mountain Project

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here’s a sense of purpose at Canadian junior Potash Ridge – and the tone is set by its President and CEO Guy Bentinck a Chartered Accountant who has devoted the 20 years he has spent in the mining sector to finding smart ways of securing finance. He is not a man whose head can be turned by specious arguments: every step in the development of a project has to be considered, and realistic contingency planning built in.

Still, it’s impossible to miss the excitement and real passion behind his proposals for the company’s Blawn Mountain potash deposit. At first glance the pace seems to have been a breakneck one since he joined the company two years ago, at a point where Potash Ridge had done no more than acquire the rights to the property, in which it has a 100 percent interest.

There’s a good explanation for this fast track development. In two years the project has come from virtually nothing to being a project with 40 years’ worth of reserves and a pre-feasibility study (PFS), completed November 7, that demonstrates its technical and economic viability. It has a lot to do with the fact that this is a well-understood resource, explains Bentinck: “This deposit was extensively evaluated in the 1970s, not for the potash but for alumina.” At the time, potash was of little interest compared to the alumina that the alunite ore also contains.

The equivalent of $100 million at today’s values was spent in proving the resource and getting it ‘shovel ready’, and a pilot plant based on well understood technology

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Potash Ridge has offices in Milford and Salt Lake City, UT and in Toronto, Ontario

ran satisfactorily for three years before the market for alumina collapsed, and with it the prospects for financing Blawn Mountain.

In April 2011, Potash Ridge gained ownership of all the historical data that had been amassed: “Boxes and boxes of drilling results, engineering reports, test work, permitting applications and the like fell into our lap and allowed us to develop the project very quickly,” he says. “And we expect to be able to continue to use the historical data from the remaining part of the resource,

which does not, however, form part of the basis for the PFS.” Development has been helped by other factors too. For one thing, all of the property is on land owned by the State of Utah. It is a lot harder to get a project permitted if it is on federal land and has to go through agencies like the Bureau of Land Management, the Corps of Engineers or the EPA, which are notoriously restrained where resource developments are concerned and very slow to take decisions. Utah, whose resources

“Drilling results, engineering reports, test work, permitting applications and the like fell into our lap and allowed us to develop the project very quickly” 40 | Event Showcase

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645,000 tons

Annual SOP production play a major part in the State economy, on the other hand takes a very ‘can do’ approach to mining.

It is not hard to see why the state would want to support Potash Ridge. The land that hosts the deposit is owned by the School and Institutional Trust Lands Administration (SITLA), whose land holdings are all designated for development in one form or another. “The basic business proposition is that the revenue derived is earmarked for education in Utah. We are going to be paying the School Fund around $30 million a year in royalties when we are up and running,” says Bentinck. Add to that more than a billion of capital investment in this remote part of the state, and the creation of around 500 full time jobs and the case for development is unassailable.

As long as it does not go the same way it went in 1980, that is. Well that is where Guy Bentinck shows his crusading side. He is looking for every opportunity to make understood the distinction between MOP and SOP. Let us get it straight from the start: Potash Ridge is focused on sulphate of potash (SOP), a premium potassium source that is used in crops that are sensitive to chloride

Guy Bentinck, CEO of Potash Ridge

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or fertiliser burn. Tobacco, pineapple, soft chloride in many cases will reduce yields. fruits, salad crops, apples oranges and If the chloride content isn’t managed, it can avocado are all examples and there are lead to low quality crops and inhibit plant plenty more. Growers of these crops have growth in dry soils and saline areas. two choices – SOP or nothing.

That SOP is a separate product, not a niche Muriate of potash (MOP) is the most subset of regular potash has been graphically common potassium source used in demonstrated over the course of 2013. MOP prices slumped from over agriculture, accounting $400 a tonne to close to $300 for about 90 percent of following the collapse of a all potash fertilisers used Russia/Belarus cartel, but worldwide. A few plants like sugar beet actually like over the same period SOP chloride; many tolerate it prices in North America rose.

“The tenuous link between including leaf crops and Full time jobs created MOP and SOP in people’s soya, but the presence of

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Drilling was completed in 2013 in support of Potash Ridge’s Prefeasibility Study, which was released in November

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“We are going to be paying the School Fund around $30 million a year in royalties when we are up and running” minds really does not seem to be there any more. The supply dynamics of regular potash don’t exist with SOP and the market impact on regular potash has not affected SOP one iota: that is the competitive advantage of our project as against many other regular potash development companies.”

2013

The PFS that is currently giving Potash Ridge a warm glow is in fact a very conservative document. It does not take into account any potential alumina by product credits, and the closer one looks at it the lower the risk appears. Contingency elements of around 15 percent have been built into capex and opex estimates; the jurisdiction is friendly, the infrastructure available and the deposit is a surface one, unlike so many potash resources.

The fundamentals of potash are sound, as the world strains to get more productivity from less agricultural land, and the product gets an additional fair wind from the growing recognition of sulphur as a plant nutrient.

“When legislation was enacted to require scrubbers to remove SO2 emissions, crop yields started declining!”

When the alunite ore is roasted as part of the SOP process, SO2 is driven off, captured, and converted into sulphuric acid. That will provide an additional revenue stream, as will the alumina, which was after all what the deposit set out to produce 40 years ago, so there’s quite a bit of it. The residue from the leaching process is alumina rich, and though it does not form part of the current business case for the mine this could yield significant tonnage of material suitable for sale as a substitute for bauxite in smelting

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“Too many projects today get stalled because management did not think through the financing arrangements early enough�

Areas 3 & 4 seen in the distance have had little exploration work to date

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potash ridge plants – there is a strong demand for this material, he says, especially from China.

Another potential market is to sell the material as an ingredient in manufacturing ceramic proppants used to keep hydraulic fractures open. With shale gas deposits taking a front seat in global energy markets, this is a growing procedure, and these proppants are an essential part of it because they perform much better than sand.

Potash Ridge is expecting to produce 645,000 tons of SOP each year, and 1.4 million tons of concentrated sulphuric acid. The company now plans to embark on a full feasibility study (FFS) early in 2014, permitting activities are already underway and offtake arrangements for sulphuric acid production are going well, with an agreement already signed with a purchaser to take 20 percent of acid production. “We are currently negotiating with third parties on build, own and operate contracts to provide gas, power and water assets at the site.”

He is confident he will be able to start construction in 2015, to start commissioning the process plant in 2017 and reach full production in 2019. “My primary focus here is on expediting the project. Too many projects today get stalled because management did not think through the

Core sample

financing arrangements early enough.” This is not a trap that Guy Bentinck will allow Potash Ridge to fall into: however he does have one big remaining challenge, and that is to bring on board a joint venture partner to take a good proportion of SOP production, to share the capital cost of development and maybe also smooth the way to borrowing such sums as may be required along the road to sustainability and profitability in the future. Discussions are already under way, and with the PFS out of the way, these will gain momentum in the new year.

For more information about Potash Ridge visit: www.potashridge.com

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Coastal Gold

Grade is king Coastal Gold’s Hope Brook property located in Newfoundland is rapidly developing towards becoming a very significant producer

written by: John O’Hanlon research by: Marcus Lewis

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Mine site looking north

coastal gold

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he market has a lot to answer for, and so do investors in search of a quick buck. Where gold mining is concerned, it is a wellknown fact that as the price on the international metal exchanges fluctuates the viability of higher cost mines comes into question. There are properties all over the world that have been put into mothballs either because all the high grade material has been taken or because they can’t any longer sustain a decent margin.

In many cases this is not the whole story, however. The President and CEO of Coastal Gold Dr Bill Pearson is a geologist with a stellar track record in exploration, specialising in resurrecting mines that had been thought expired. He explains his apparent instinct for divination as merely a result of 40 years of learning and applying geological principles but what is not in question is that he has done it before. “Over the years I have developed a speciality in taking old and unloved mines and reassessing them giving them a new look and getting them back into production.�

As VP for Exploration at Desert Sun Pearson directed exploration programs that increased the overall resource base at the Jacobina mine in Brazil by 1.4 million ounces of gold and discovered a major new extension to the Canavieras deposit that is now being developed by Yamana - with a projected mine life of 30 years. And for Central Sun he and Peter Tagliamonte discovered new zones at the Santa Pancha mine and at Orosi (now Libertad) in Nicaragua as well as significantly expanding mineral resources in the region of Limon and laying the foundations of what is

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now a $1.6 billion company. Team building from top to bottom is one of Bill Pearson’s strong points. This summer he welcomed a new chairman to the board of Coastal Gold – Justin Reed is that rare animal, a banker trained as a geologist.

When his company Castillian Resources first looked at the Hope Brook deposit, discovered in 1983 by BP-Selco, and mined from 1987 to 1997 with total production reported to be 752,153 ounces of gold plus a copper

concentrate, he felt immediate recognition.

Others thought the prospects were too low grade and had no potential because everything significant had been found, but they were wrong. It was a familiar picture, he explains: “It was the technical work that was lacking. It needed proper geological work and engineering work. Once it got into production the geological work took a back seat, and of course this deposit was producing during a very low gold price era.” Any exploration was

“The people here are a pleasure to work with: they love working on ‘The Rock’”

New camp infrastructure

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coastal gold

Mine site looking south

limited to the immediate area economic assessment (PEA) round the mine, but Pearson on Hope Brook. The work is has since shown that it is now progressing well with remarkably wide open.

Newfoundland contractor Castillian changed its New Valley Drilling, and the support of local communities name to Coastal Gold in which make up the bulk of June this year following the workforce. Even Dave a merger with Ridgemont Drilling campaign under way Iron Ore and reflecting the Copeland the Chief Geologist company’s confidence that is a Newfoundlander, though with global experience. it can now focus all the energies of its experienced team on Hope Work is progressing well on all fronts. As Brook, properties outside of Canada have well as drilling, further attention is being paid been disposed of. The merger and the $2.7 to the old tailings. Preliminary work carried million funding it released, paved the way to out last year showed recoverable gold at about achieving its immediate milestones, a 4,250 one gram per tonne – in tailings produced metre resource definition diamond drilling when the old plant was running at maximum programme and competing a preliminary efficiency. Metallurgical, geotechnical,

4,250 metres

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“We have weathered the storm over the last 18 months and are ready to take Hope Brook forward” environmental and engineering work under technical manager Allan Polk is progressing apace and the results of this work will form a key part of the PEA. In every way, Newfoundland is a great jurisdiction to work in, and he clearly appreciates the lack of political and regulatory issues compared with many gold mining countries. Power is a case in point. Before he spent $14,000 on a line to link the camp

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with the grid he was spending $5,000 a week on diesel; now the camp, and eventually the production plant, can enjoy reliable supply for a quarter of that cost. “We have an airstrip, a wharf, existing tailing ponds, a ramp to 350 metres below surface, and we can bring all we need in by boat,” he enthuses.

“Newfoundland’s main shipping port, Port aux Basques, is just a 70 kilometre sea journey to the west and the town of Burgeo is only 30

coastal gold

kilometres to the east.” However the greatest advantage Newfoundland offers is its skilled workforce. “The people here are a pleasure to work with: they love working on ‘The Rock’ having worked on forestry, fishing and mining all their lives. They fix things before they are broken!”

The results of the drilling programme will be out by the end of this year and the PEA completed early in 2014. Drilling is currently taking place in two areas known as the Footwall and South West Pit Extension. Next year attention will move to the longer term potential of the property, a large area to the west of the historical mine called the 240 Connector Target. “We won’t be able to drill it in the current program but if we can establish the bridge from the South West Extension into that

target the potential expansion is tremendous.”

This is more than just a gut feeling. With significant past production, he feels that there is a lot of misunderstood geology going on.

“The key thing is that if you want to find a big mineral deposit you need to get into a big system and that is what I always liked about this project – it is a very big system, also very under explored.”

An important discovery he has made is that some of the old drill holes on which people were assessing the area were simply in the wrong place, or had failed to go deep enough. Drilling and geophysics have identified a major fold structure that closes below surface in the Connector Zone, he says, which explains why shallow historical drilling failed to intersect the gold bearing

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Core analysis program

coastal gold rock. Understanding these fold structures, he adds, are the key to unlocking the potential of Hope Brook. And Hope Brook is far from being the whole story. “It is part of something much bigger. It is not rocket science to realise that if we have some success here we are looking at a very substantial pit here, all of it open down dip and along strike!”

He also believes that the historical grade analyses are seriously flawed. “I believe historical drilling seriously underestimated the grades because of problems of grinding but also because they were only looking for higher grade material.” In the circumstances prevailing in the 1990s mid-grade and lowgrade samples never even got analysed, so they show up as zero in the database. “We are busy filling in gaps in the old drilling, eliminating historical holes we don’t think fit the picture. I am very confident we will see a big increase in grade in the next resource assessment. Naturally we want to expand ounces but right now getting the grade up is our prime focus.”

Coastal gold is a company to watch. It has strong investor support and will attract those investors who believe the gold price will recover going forward. Bill Pearson at any rate is optimistic. “I think now we have weathered the storm over the last 18 months and are ready to take Hope Brook forward – just watch what happens over the next half year!”

For more information about Coastal Gold visit: www.coastalgold.ca

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Leading South American exploration The work of Mariana Resources’ highly experienced team is allowing it to transform its developing discoveries into robust projects

mariana Resources

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ariana Resources Ltd is an AIM quoted South American gold, copper and silver exploration and development company focussed on advancing mineral rich projects up the resource development curve. Mariana has an extensive project portfolio in southern Argentina poised to generate value uplift in the long-term; however it is the company’s transformational leap into Peru which has excited investors, and where the company believe that significant economic opportunities exist in the near-term.

Mariana’s Peruvian opportunities consist of two highly prospective and potentially company-making gold/copper/ silver projects optioned from TSX-V quoted Condor Resources Inc. The 102 sq km Condor de Oro prospect in Northern Peru, where Mariana can earn 51 percent , is situated along the Cordillera del Condor corridor, one of the most significant emerging gold and copper belts in the world.

Importantly, extensive geophysics and sampling work conducted at Condor de Oro points to the prospect containing a highly mineralised intrusive related porphyry system with the potential to host a multimillion ounce gold and base metal deposit.

With this in mind Mariana has commenced an initial 1500m drilling programme with assay results due Q4 2013. The company believes these results will confirm the

mineralisation, economic and companymaker potential of the project.

Mariana’s can earn a 70 percent interest in the second project in Peru being the advanced Soledad gold-copper-silver project located in the Cordillera Negra metallogenic province in Central Peru, 34 km south of the Pierina gold-silver mine operated by Barrick Gold Corporation. This project complements the company’s diversification strategy into Peru and offers excellent exploration upside which the company plans to drill in the first half of 2014.

In addition, Mariana has assembled an impressive 200,000 hectare portfolio of gold, copper and silver projects in the prolific epithermal gold-silver district of Santa Cruz province, Argentina. The area has seen considerable corporate activity as companies seek out these major discoveries. Mariana has proved its ability to advance projects from discovery to resource phase; the Las Calandrias project was taken by the team from an initial discovery to a maiden Gold Equivalent resource of 519,000 ounces. Due to the current political climate, Argentina forms a longer-term delivery strategy for the company from which to deliver value for shareholders for the future.

For more information about Mariana Resources visit: www.marianaresources.com

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21st North

The prospect of partnership 21st North develops mineral projects in Greenland, a territory that is today long on interest but short on experience – experience is exactly what this company brings to the party, along with some very advanced technology

written by: John O’Hanlon research by: Richard Halfhide

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Channel sampling of Ni-Cu mineralisation on Ammassalik Island, Southeast Greenland

21st North

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t was in 2009 that two senior geologists with the Greenlandic exploration company NunaMinerals decided that there was no question that Greenland was on the verge of transforming from a fisheries-based economy to a major player in key minerals.

An exploration company, they reasoned, that really understood the regional geology as well as the most advanced technologies available would be urgently needed.

So Claus Oestergaard and his partner Anders Lie, both based in the ‘mother country’ Denmark decided to set up 21st North to really optimise mineral exploration, whether on its own behalf or for clients. In between the two of them, Oestergaard and Lie had more than 30 years’ experience of working in all parts of Greenland, Oestergaard has also worked directly within GEUS, the Geological Survey of Denmark and Greenland, which has amassed almost all the available historical data on which more specific modern work has to rely.

Lie and Oestergaard were among the first in the exploration business to realise and apply the potential of digital satellite imagery In Greenland, as well as remote sensing capabilities, hand held XRFs and hyperspectral technologies which use different wavelengths to identify alteration features and rock types even before you go into the field. “Remote sensing is helpful because it is something you can do at home from your desk!” says Oestergaard. Applying 21st century techniques to develop resources gave the company its name, and today it has a well-established partnership with the British remote sensing, image processing, GIS

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and digital mapping services company HME Partnership.

Getting established was not that easy though, says Oestergaard: “We knew it was a tough place to start, which is why we included several extra legs to stand on, so we offer contract exploration services and consultancy to firms wanting to get involved in Greenland as well as developing our own licences.” However these properties, most of them owned through a subsidiary company Greenland Gold Resources, take up 75 percent of 21st North’s energies. “Our core business is the exploration and development of projects,” he explains.

However it is quite a unique potential partner for anyone wanting to develop

new grassroots exploration projects in under-explored regions of Greenland and Scandinavia. The way forward for this company will be via joint ventures says Oestergaard. “Whether our key projects will be listed at some point or remain private is an open question – but at some point we would welcome partnerships that allow us to conduct exploration projects on a more regional scale, supported by investors, with a focus, probably, on east or south Greenland.

There are some really interesting regions in Greenland which require grass roots exploration but further development requires financing.”

21st North’s most advanced project so far is its Akuliaruseq graphite deposit, between

Nickel prospecting in the Ammassalik region. Southeast Greenland

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21st North

“We would welcome partnerships that allow us to conduct exploration projects on a more regional scale, supported by investors” the towns of Sisimiut and Aasiaat on the west coast of Greenland and close to the airport at Kangerlussaq. Greenland has a long history of small scale graphite mining, he explains. Knowledge of the Akuliaruseq deposit goes back as far as 1912-1916 where sporadic mining took place. No further work was done until the 1980s, but by 1986 geological and geophysical exploration work

had outlined and test drilled four favourable blocks defining an open-ended indicated resource of 5.34Mt grading 9.5 percent C. Bulk sampling indicated that a significant volume of the deposit consists of large and giant size graphite flakes without impurities, the most important criteria for flake graphite deposits.

The company has recently applied for extension of the property and will conduct a surface exploration programme this year to outline additional resources. In addition, a €1.85 million, 5,000 metre drilling campaign is proposed to establish the depth and extent of the Akuliaruseq deposit as well as further testing the flake size, leading to test mining in order to be certain that this is not just a large scale resource but also one that can be successfully exploited. “Though we are an exploration company and generally not interested in mine building or beneficiation as such, we always have an eye to these matters early on,” he says. Once it has done the preliminary work and taken the project up to feasibility or pre-feasibility stage, the company wants to attract partners who will buy in to the project and take it forward to production. At his point 21st North’s interest will start to dilute or may be sold outright.

Less well known till 21st North came

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“Looking at reflections from different wavelengths over a wide spectrum gives you a great deal of geological information”

Lunch break . Sinarsuk Ti-V project, Southwest Greenland

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21st North on the scene was the Ikertoq Prospect, a 151 square kilometre nickelcopper licence in the same general area of Greenland, strategically located 60 kilometres from the international airport in Greenland and eight kilometres from a deep water fjord. In partnership with Northern Shield Resources, a Canadian junior, 21st North will drill up to 2,000 metres this summer at a cost of €1,000.000. It could be a very exciting project.

Greenland and Canada were once joined together and Fly camp set-up within the Ikertoq region prospecting for Ni-Cu for years mining companies have been searching in Greenland for the also gold bearing rock in this region. continuation of Quebec’s Raglan Nickel Belt Titanium and vanadium are among and the structure that hosts the Voisey’s the many metals that are in increasing Bay Nickel Deposit. The Ikertoq property demand round the world. They are present could well be it. in a highly accessible surface deposit at Another nickel-copper deposit in the Sinarsuk near Fiskenæsset just 125 miles portfolio has already seen some test drilling, south of the capital Nuuk – there’s virtually and more is to be carried out. Though its no overburden at all so once 21st North has principal town Tasiilaq is easily accessible by completed its validation of the site it should sea and has daily flights to the west coast be very attractive to an investor. and Iceland, the island of Ammassalik off Though GEUS has done a huge amount of the south east coast of Greenland has seen work, and a sporadic amount of development limited exploration activities and early testing and exploration has taken place in recent up to 2005 missed the best deposits. Now years, there are still many parts of Greenland 21st North has exclusive mineral rights over that have only seen limited exploration activity an 84 square kilometre area that it considers but where there are a lot of interesting finds has great potential for copper, nickel and to be made, says Oestergaard. “We rely very platinum group elements (PGEs). There is much on that historic information to decide

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“We know how to operate in all parts of Greenland with a sure hand!” that any particular area might be interesting to go into and work on, in fact we have done that with most of our projects.”

Remote sensing technologies give excellent results in Greenland.. “Looking at reflections from different wavelengths over a wide spectrum gives you a great deal of geological information. Another wonderful thing about Greenland is that there are no trees and excellent exposure due to the historic

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glaciation. You can see a lot of information you can’t in other parts of the world.”

The centre of Greenland, 83 percent of its surface area, is inaccessible because of the ice cover, but its uncovered part is larger than France, he points out. He prefers to work in the southern and central part of the country.

Though there are great deposits in the north, he feels that investors are less likely to be captivated by projects that are hard to access

21st North

Mobilising camp and fuel by barge in the fjords of West Greenland

from a logistical point of view, and more importantly whose production can only be shipped out for a few months of the year, Below the Arctic Circle, warmed by the Gulf Stream, pierced by numerous deep water fjords, the southern coasts are a miner’s dream compared with many parts of the world.

And Greenland is one of the most secure and investment-friendly countries in the world, backed by Denmark though jealous of its independence and always vigilant on behalf of its population and its land and marine ecology. The biggest drawback is the lack of infrastructure, but this can be costed into any venture and may be offset by so many positive features that it becomes less

significant. It does require deposits with good grade and tonnage to be economic, though.

“When new companies start to consider Greenland they get anxious, naturally enough. That is why most of them quickly realise they need a local partner,” says Claus Oestergaard. “That is where we see ourselves.

We give the companies the confidence that their investment is in safe hands. We know how to operate in all parts of Greenland with a sure hand!”

For more information about 21st North visit: www.21stnorth.com

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standard bank

the Setting

standard How Standard Bank plays a key role within Africa’s emerging markets and its ongoing commitment to the continent

edited by: will daynes research by: richard Halfhide

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A gold wagon outside an early Johannesburg branch of the bank in 1895

Standard Bank

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he First Quantum Minerals (FQM) story began in the late 90s and spans humble beginnings from a tailings retreatment process at Bwana Mkubwa in Zambia, to its present day achievable aspiration to be one of the world’s leading copper producers. The financing and development of Kansanshi marked the transition of the company to a fully fledged miner and the beginning of a spectacular growth story for the company over the last decade. Following the Kansanshi success, FQM expanded their footprint through the African Copper belt, the African continent and then on an international scale as the company diversified into Nickel and acquired Kevitsa and Ravensthorpe. Acquisitions continued with the Antares, Haquira Project in Peru and the most recent widely publicised Inmet acquisition, including the large scale Cobre Panama Project.

FQM growth story and Standard Bank support Standard Bank has partnered with the company throughout this story with a relationship dating back to the initial financing of the company’s flagship Kansanshi Project – Africa’s largest copper mine and the world’s eighth largest copper mine today. In December 2003 Standard Bank, as a Co-Lead Arranger and Underwriter, signed a $120 million export credit and commercial debt facility for the development of Kansanshi. Vaughan Wickins an Executive in the bank’s Mining and Metals teams comments, “the Kansanshi financing was a landmark transaction as it was the first

mine financing in Zambia done on a project finance basis. Standard Bank was confident to underwrite the senior loan which included the Export Credit Insurance Corporation of South Africa. The financing structure also incorporated an asset finance, overrun and power line cost element, however the senior loan facility was ultimately awarded the Project Finance Magazine Mining Deal of 2003 – Africa”. In addition to the senior loan support, Standard Bank signed a $6 million short term facility to finance the company’s capital contribution to ZESCO (the Zambian power utility), providing for the construction and installation of a transmission line and new substation to connect Kansanshi to the ZESCO power grid.

In October 2006, Standard Bank was a lender to the $400 million corporate facility that enabled the refinancing of the Kansanshi facility and financing for the company’s additional projects and general corporate purposes. By the end of 2006, FQM had four African assets including Kansanshi, Bwana Mkuba/Lonshi, Frontier Copper in the DRC and Guelb Moghrein in Mauritania.

2008 was a busy year for FQM. The company acquired Scandinavian Minerals and the Kevitsa nickel-copper-PGE project in Finland - one of the world’s largest undeveloped, sulphide nickel deposits at the time - and later in the year announced the acquisition of BHP Billiton’s Ravensthorpe nickel operation in Western Australia. FQM was advancing its plans to become one of the world’s leading nickel producers. Following a decision to commence development of the Kevitsa Project, Standard Bank was again

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mandated as a lead arranger on a $250 million debt facility to fund development.

Standard Bank Growth Story Standard Bank is the largest bank in Africa with over 150 years of operating history on the continent and employs more than 50,000 people worldwide. The bank operates in 18 countries in sub-Saharan Africa and is building Africa’s leading financial services organisation.

Africa is expected to benefit from sustained economic growth in the decade to 2020.

Standard Bank with its on-the-ground presence and unmatched knowledge of Africa’s economies, resources, clients and communities, is uniquely positioned to ride the wave of the African growth story.

Standard Bank operates around 550 retail branch outlets outside of South Africa and

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plans ongoing investment in its operations across the rest of Africa. Including South Africa the bank currently operates around 8,500 ATMs across the continent.

The strategic partnership with its 20 percent shareholder, the Industrial and Commercial Bank of China, has proved rewarding. In 2008 the $5.5 billion investment was the largest foreign investment into South Africa and largest foreign investment by a Chinese bank internationally. The transaction marries China’s appetite for commodities with Africa’s vast resources and Standard Bank’s expertise on the continent.

Standard Bank’s achievements have been acknowledged across the industry, with the bank recently being named as Best Investment Bank in Africa by Euromoney. The award adds to Standard Bank Group’s list of accolades received in 2013, including winning eleven

Standard Bank ‘EMEA Finance Achievement’ awards; the ‘African Deal of the Year’ award for Konkola Copper Mines financing in the 2013 Project Finance Deal of the Year Awards; ‘Commercial Deal of the Year’ in the 2013 Trade & Forfaiting Review; and being named ‘Best Trade Finance Bank in Africa’ by Global Finance.

Mr David Munro, Chief Executive of Standard Bank Corporate and Investment Banking said, “Our clients are at the heart of everything we do. We have a unique footprint and physical presence across Africa, global connectivity to serve Africa, unique sector expertise with a specialisation in natural resources and a talented team, all of which reinforce our position as the leading financial services organisation on the continent.”

Standard Bank’s mining and metals expertise Standard Bank’s focus on resources is supported by the vast potential of the African continent. It is an institution steeped in mining history with its head office situated in the South African gold region of the Witwatersrand in the Gauteng Province. There are not many institutions that can have their employees look out of the head office windows and see mining headframes in the distance.

Commenting on the bank’s support for First Quantum and its mining pedigree, Mr Wickins says “FQM’s experience and track record in successfully developing and operating complex projects has set them apart from other miners. It remains a key aspect that has underpinned Standard Bank’s ongoing support for the company.

It is a similar focus on technical expertise along with our track record that has seen Standard Bank finance the majority of new copper mine developments in Africa over the last decade, this includes financing for FQM, KCM, Equinox, Discovery Metals and Metorex. “ The mining and metals sector is high risk with the challenges only exacerbated in the current climate of falling commodity prices. At times like these it’s important for companies to partner with banks that have

“Standard Bank’s focus on resources is supported by the vast potential of the African continent” Event Showcase | 73

a long term commitment to the sector and the continent. Mining and metals remains a core business for Standard Bank and its comprehensive service offering includes providing innovative and flexible financing, advisory, trading, ECM and treasury solutions to clients. The bank’s mining and metals team includes extensive technical expertise with individuals ranging from the various disciplines of mine engineering, geology, metallurgy and process engineering. We are able to leverage this in-house technical expertise and track record of successfully executed transactions to assist clients achieve their development objectives. The Bank’s network of offices in all the major mining regions of the world enables it to provide analyses of global commodity trends and to stay abreast of local developments.

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As part of the bank’s expertise in supporting the mining sector, Standard Bank is currently the leading ECM platform in Africa, closing twelve transactions in 2012 with a deal value in excess of $2 billion and being awarded Euromoney’s 2013 award for Best Equity House in Africa.

Additional product support to FQM While the funding support Standard Bank has provided to FQM has been an important aspect in assisting the company’s growth plans, the bank has also been a long standing provider of day to day banking support in Zambia, including provision of new ATMs and branches as well as situating bank staff on the client’s premises. The Bank’s FX trading teams situated in Lusaka, Johannesburg, NY and London offer real time market views and

Standard Bank

“Standard Bank is currently the leading ECM platform in Africa, closing twelve transactions in 2012 with a deal value in excess of $2 billion” trading solutions to mitigate currency risks and ensure efficient operational management.

In addition to transactional and FX support, the bank has an established capability in commodity trading, notably in the African copperbelt. Steve Reece Head of Base Metals Trading at Standard Bank commented on the physical trading environment in the region: “Standard Bank has actively supported mining companies in the region and established an impressive physical commodity capability over the last ten years. Our support to miners includes the ability to act as an offtaker and take physical Cu metal in a variety of forms including everything from concentrate through to LME grade copper cathode.

In addition we have provided short term working capital support linked to physical offtake solutions. In the case of FQM and various other miners, providing short dated QP hedging lines has assisted the miners in managing their near term commodity price exposure, whilst the provision by Standard Bank to many miners of longer dated lines has helped those miners provide their debtholders and shareholders with price security in extremely volatile times” FQM has a good understanding of commodity sales and marketing, following the acquisition of the trading company,

Republic House in 2010. The marketing and sale of the company’s copper production is handled by Metal Corp Trading, the separate entity it established following the acquisition.

Standard Bank’s strength in global commodity trading is supported by 24 hour coverage of spot, forward, options and other derivative instruments in precious and base metals as well as capability in iron ore and other metals.

Standard Bank in Zambia In Zambia, Standard Bank trades as Stanbic Bank and was established in 1992 offering Personal and Business Banking, Corporate and Investment Banking and Wealth Management.

The Bank has 22 branches spread across the country, including the Copperbelt and North Western Province, with 48 ATMs all equipped with VISA facilities. The bank has invested significantly in growing its capacity in Zambia across both these provinces.

Standard Bank’s Corporate and Investment Banking business in Zambia serves a wide range of client requirements across banking, finance, trade, risk management and advisory services. The division has built a deep understanding of the market dynamics in Zambia and maintains a specific focus on industry sectors that are

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“The work done in Zambia, South Africa and the UK has added significant value to the client and increased the strength of the relationship” most relevant to Zambia and have a strong local value proposition, including mining and metals, telecommunications, power and infrastructure, agribusiness and financial institutions. The local team is able to provide clients with relevant experience and deep insight into the local commercial and regulatory environments.

For both FQM and Standard Bank, Zambia remains an important country of focus.

Standard Bank’s strong presence in Zambia means the bank is well positioned to continue supporting FQM’s Zambian growth strategy.

FQM’s current assets in-country include a strategic investment in Mopani Copper Mines (whose assets include the Mufulira mine, smelter and refinery and the Nkana mine, concentrator and cobalt plant), the expanding Kansanshi Project, construction of a copper smelter at the mine, and the Trident Project incorporating Sentinel (Copper), Enterprise (Nickel) and Intrepid (Uranium).

In terms of location, the flagship Kansanshi mine and Project Trident are situated in the North Western Province of Zambia some 15 kilometres and 150 kilometres west of Solwezi, respectively. Solwezi has quickly grown into a major mining centre serving the aforementioned projects as well as Barrick Gold’s Lumwana mine. The area is

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capable of producing well in excess of 1 M tonnes per year of copper as well as other by-product metals including gold. The region has become an increasingly important province for the country.

The Trident Project will be built around a new urban development, Kalumbila, in the North Western Province and the Bank has been at the forefront of providing financial services and support to FQM, notwithstanding the relative infancy of this particular initiative.

We are providing a temporary drop-down ATM solution whilst the town and mine are being constructed. Once operations begin in earnest, the Bank shall open a full-service branch at the mine to ensure access by the company to the best commercial banking services possible and minimal disruption to operations at the mine.

Over the last two years, Zambia has introduced significant and far-reaching regulatory changes. Several of these have presented challenges to businesses including FQM, as one of Zambia’s largest tax payers.

Statutory Instrument 55 (Monitoring of Balance of Payments), introduced in July 2013, has required significant operational planning and adjustments. Standard Bank set about understanding the implications of the new regulations and in collaboration with

Standard Bank

FQM and the regulator, formulating solutions and human capital support to guide the client through the process. The work done by the Bank in Zambia, South Africa and the UK has added significant value to the client and increased the strength of the relationship.

Particularly noteworthy, underlying the unique relationship that exists between the two businesses is the decision to commit part of the Bank’s headcount solely to FQM at Kansanshi as a result of SI55.

Stanbic Zambia continues to service a number of the other major miners in-country, including Barrick Gold and Vedanta Resources.

More recently the Standard Bank Group won Project Finance magazine’s 2012 African Mining Deal of the Year for the $700 million project funding for Konkola’s development of the Konkola Deep Mining Project.

Paul Richards, Head of Corporate and Investment Banking at Stanbic in Zambia said, “We are African in ethos and culture. I personally take much pride and comfort from

one of our more recent strap lines, which I think describes in two short sentences the essence of our Bank. “They call it Africa. We call it home”. We aim to build the leading African financial services organisation using all our competitive advantages to the full. We will focus on delivering superior sustainable shareholder value by serving the needs of our customers through first-class, on-the-ground operations in chosen countries in Africa. We will also connect other selected emerging markets to Africa and to each other, applying our sector expertise, particularly in natural resources, globally” It is a testament to the Zambian Government’s commitment to supporting the mining sector that FQM has had the confidence to commit to its large scale development plans in the country. Following commissioning of Sentinel and further Kansanshi expansions, FQM will initially be targeting annual copper production in Zambia of approximately 700,000 tonnes per annum. Planned capital expenditure in-country will be in the order of $3.4 billion.

Africa is a key focal point for growth within the emerging markets and Standard Bank plays an important role in continuing to support development, leveraging its people, expertise and track record. Standard Bank’s commitment to the continent and the sector is evident - “They call it Africa.

We call it home”.

For more information about Standard Bank visit: www.standardbank.com

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Charting a path to production Base Resources’ Kwale mineral sands operation is a game changer for both the company and the Republic of Kenya

written by: John O’Hanlon research by: Richard Halfhide

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Base Resources

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Tim Carstens

Base Resources

I

n 2008, after a career spent “being dropped into things that had to be turned round and fixed”, Tim Carstens founded Base Resources. The MD’s intent was clear - to build from scratch a meaningful resource company - and he has accomplished precisely that.

Base listed on the ASX in October, 2008, with a portfolio of Australian iron ore projects. Carstens and his team, recognising that these assets would not produce any company-makers, “set sail round the world looking for the right opportunity we could build the company around”. In July, 2010, Base acquired its 100 per cent interest in the Kwale minerals sands project in Kenya.

By the time the company dual-listed on London’s AIM bourse in January, 2013, it was clear that this project was rapidly emerging as the company-maker Carstens had set his sights on.

Situated just 10 kilometres inland and 50 kilometres south of Kenya’s principal port of Mombasa, Kwale had already undergone investment surpassing $60 million to progress the project through resource definition, government approvals and Definitive Feasibility Studies (DFS) when Base took the reins. This meant the project was well advanced, allowing its new owner to fast track financing and development. “It was the ideal project to build our business model round, get our team in place, the capital base, the reputation to move to the next project and beyond,” Carstens says.

His is a sentiment encapsulated by Base’s development model for Kwale. Instead of delegating project execution to a single

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ECPM contractor, Base engaged best-in-class specialists in port construction, dam building, process plant design and construction, and power land access infrastructure. “We have our own integrated management team that knits the whole thing together,” Carstens explains. “That model has worked well. It enables us to anticipate issues before they become reality and get engaged with the contractors very early, while we have plenty of options for dealing with those issues, supplementing the horsepower when we need to and keeping the project ‘on the rails’.”

Kwale is of genuinely strategic importance to Kenya’s future mineral production and the sector’s role within the nation’s economic wellbeing. As well as proving up Base’s company mettle as an explorer, developer, and producer, the project heralds the dawn of a significantly enhanced mineral sector in Kenya. Kwale is Kenya’s first large scale modern mining operation and is poised to have a huge impact on GDP: income from titanium mining at Kwale will see mineral exports displace coffee as the fourth highest foreign exchange earner and contribute an estimated $225 million in royalties and taxes over the 13-year life of the mine.

Beyond the numbers underpinning Kwale’s medium-term beneficial impact, the project is seen as a poster child for future large-scale resource development in Kenya. According

to Kenya’s Vision 2030 framework, Kwale is a long-term development blueprint to create a globally competitive and prosperous nation and transform Kenya into ‘a newly industrialising, middle-income country providing a high quality of life to all its citizens by 2030 in a clean and secure environment.’

There is collateral benefit for the government, Carstens emphasises, in terms of Kwale being a catalyst for future inward investment and development of the mining industry. “The government has been enormously supportive

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Base Resources

Pushing first ore to DMU

and has played its role.” company does business.” The So it’s important for ‘establishment’ phase of the Kenya, but it’s a blueprint to project involved the relocation of some 500 households. the future of Base Resources too, wherever it goes next.

While most of these Workers on site at peak Reaching this point has taken households were squatting more than paying lip service on the land, Base treated all to CSR, Carstens says. He as if they were landowners in sees CSR more as the language of obligation the relocation and compensation process. This whereas, Base engages with the community on relocation was completed in compliance with a more transactional basis as a core function The World Bank’s Equator Principles. Roads of its business. “We give them what they need were re-routed, all infrastructure replaced so we get what we need” he says. Base wants and enhanced. Mosques, churches, schools, the communities to be satisfied with the value community hall and a new regional health and benefit the Company’s activities deliver centre have been built. to them. “In exchange, we have a proud “Employment is obviously very important workforce and a supportive community that is in a situation like this,” Carstens explains. an active and positive referee for the way the “During our peak construction phase, we

2,400

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had 2,400 people working on site, of whom 1,000 were from the local community – many had never had a job before.”

Currently, 1,600 Kenyans are working onsite at Kwale and, for a country that has a very underdeveloped mining sector, Kenya has a good skills base, Carstens confirms.

“71 percent of our operational workforce comes from the coastal province. There’s a good general level of education. And at a more advanced level, we have three or four comparatively young geology graduates working in the business; according to our exploration manager the guys coming out of Kenyan universities are as good as the guys coming out of Australia!”

On the ground, Kwale has progressed with amazing efficiency and speed for a

DMU & process plant

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country new to mining. An eight kilometre access road, a 700 bed camp, a 16 kilometre 132 kVA power line and substation and the tailings facility have all been completed as well as the eight million cubic metre Mukurumudzi Dam that will provide water for the project while giving reliable year-round supply to the communities downstream. And the finishing touches have been put to Base’s dedicated Likoni Port facility, just across the channel from Mombasa itself, complete with a 65,000 tonne storage shed from which ilmenite and rutile is loaded onto ships via a conveyor system and a 1,000 tph shiploader on the wharf.

Kwale’s infrastructure is in place. Its mining unit and concentrator are running well in the ramp up process ahead of commissioning of the ilmenite and rutile separation circuits at

Base Resources

“Zircon has very similar physical Properties to the remaining minerals in the concentrate and requires as much art as science in the separation process” the end of November. Commissioning of the zircon circuit will follow in January. “The key milestone for me is going to be in January, when we wave goodbye to our first bulk shipments,” Carstens says. “We will ramp up the ilmenite and rutile fairly quickly, so by May both will be producing at the full run rate. Zircon always takes a little longer. We will be most of the way to our target run-rate for zircon by mid-2014 but achieving the full

30,000 tonne per annum rate will most likely take all of 2014.”

Mineral sands concentrate production is largely straightforward from a technical standpoint, Carstens explains. Ilmenite’s magnetic qualities, courtesy of its iron content, mean it can be extracted using powerful rare-earth magnets, while rutile, as a conductor, is amenable to electrostatic separation. “Zircon is different. It has very similar physical properties to the remaining minerals in the concentrate and requires as much art as science in the separation process.

It is always the hardest part of a mineral sands plant to get your arms around.”

Base has offtake agreements in place for all of Kwale’s production of rutile, ilmenite and zircon for the first year and most of the first 5 years of production. Ilmenite and rutile are predominately used as inputs in the production of titanium dioxide (TiO2) pigments used in paints, papers, ink, plastic and a huge array of other applications. Zircon is mostly used in ceramics and has many high-tech applications. China is the world’s largest consumer of all these chemicals: its demand for them has grown steadily and will certainly continue.

As Kwale’s production profile is established, Base is also mindful of leaving a beneficial

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Process plant

Base Resources legacy in Kenya beyond Kwale’s 13-year mine life. Base Titanium, the parent company’s wholly-owned operating subsidiary in the country, is not just getting behind its in-house training programmes but also a scholarship programme for talented youngsters. It is also exploring a partnership with Business for Millennium Development (B4MD), an Australian not-for-profit organisation founded to build awareness and provide market insights on inclusive business opportunities in developing countries, to establish a agricultural development programme to get people efficiently growing selected crops that can be marketed globally to B4MD’s programme partners, among them the world’s largest food groups.

In the near-term, Base remains fully supportive of its partner, the Government of Kenya, and continues to discuss ways in which changes to the nation’s mineral legislative frameworks can drive national economic prosperity and build a globally competitive destination for mining investment.

“The real challenge at the moment that the Kenyan government is wrestling with – like many others in Africa and elsewhere – is getting in place the right fiscal and regulatory settings to balance the need to attract investment and at the same time maximise local benefit and participation,” Carstens says. “That’s something we really want to contribute to.”

For more information about Base Resources visit: www.baseresources.com.au

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COMING SOON

Tanzania special Tanzania is serious about making the best use of its mineral resources, and its governing bodies are determined to be seen beyond its borders as an investment friendly jurisdiction for the benefit of its citizens.

To be part of this authoritative report promoting Tanzania and showcasing its investment opportunities contact us today.

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BEST PRACTISE IN MINING

Cerro Negro ready to yield Goldcorp is the fastest-growing, lowest-cost senior gold producer, and its Cerro Negro gold and silver mine in Argentina is on the cusp of producing its first gold

written by: John O’Hanlon research by: Candice Nice

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Goldcorp Cerro Negro

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Inside the Eureka mine

Goldcorp Cerro Negro

T

he Canadian company Goldcorp Inc acquired the Cerro Negro project in late 2010 through the acquisition of Andean Resources.

Cerro Negro is a camp-scale compilation with at least 6 veins – Eureka, Mariana Central, Mariana Norte, San Marcos, Bajo Negro and Vein Zone - already identified and located near surface which allow for development of relatively shallow ramps which will reach depths of 300 metres, on average. Acquired as an advanced stage exploration and development project, Cerro Negro is quickly being transformed into one of the largest gold mines in Argentina. Located in the southern Province of Santa Cruz, Cerro Negro is currently one of the largest mining construction development projects in the country with over 3,000 workers developing 3 underground mines with ramp access and one centralised processing plant.

A year ago when we spoke to Project Director Alastair Still, work at the site was still focused on exploration. That exploration potential still exists, but today there’s a good deal of underground activity as well as the mine, or rather mines, get into initial production.

Underground ore production from the Eureka mine started on April 1 this year, and initial ore development commenced at the Mariana Norte and Mariana Central mines during June. “Ore is being stockpiled on the surface, while mine development continues with ramp access, vertical raises, and horizontal stope development,” he explains. He is pleased with the initial analysis of the first ore produced and stockpiled: “Estimated gold and silver grades are in-line with modelled reserves and

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Goldcorp Cerro Negro resources at all three deposits currently being developed. The Eureka mine ramped up to approximately 500 tonnes per day of ore by mid-year and we expect that to increase to approximately 800 tonnes per day during the third quarter of 2013 and grow further as the mine increases to reach full production of 1,600 tonnes per day in 2014.”

As part of the overall project development, Goldcorp is building a processing plant that will treat 4,000 tonnes of ore per day.

Construction of access roads, a power line with connection to the national grid, camps for the workers and workshops is progressing

Plant construction – Vein Zone area

SONDA AS A KEY TECHNOLOGICAL PARTNER IN MINING INDUSTRY During 2010, GoldCorp selects SONDA as a strategic IT solutions provider to accompany the development of the Cerro Negro project. Due to its capabilities and many years of experience, SONDA is in a position to offer the full range of SAP products and integrated services in addition to a broad portfolio of Professional Services, Integration Field Services for IT, Infrastructure and Applications.

The relationship between SONDA and GoldCorp began during the feasibility study of the Cerro Negro mining project. GoldCorp needed a partner to implement the ERP system. SONDA provided their experience in the mining industry, and its proven experience in planning, executing and maintaining IT solutions customized to their clients’ needs. A business need was identified and a solution was suggested. SONDA and GoldCorp then launched the SAP ERP

implementation project, including Financials, Controlling, Asset Accounting, Materials Management and Project Systems. After the successful completion of this project, SONDA defined together with GoldCorp the best model to support the solution. The execution of this model has been underway for the past few years. The growing needs of the business for GoldCorp and the positive outcome of the SAP implementation project leverage a change of scope in the ERP landscape and different projects appeared. Thanks to the constant communication, continuous solution support and the proximity to the customer, SONDA was able to proactively understand the needs of the business and become a true strategic partner for IT solutions.

E. contacto.argentina@sonda.com www.sonda.com

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GOLDER ASSOCIATES Established in 1960, Golder is a global, employee-owned organisation driven by our purpose to engineer earth’s development while preserving earth’s integrity. We help our clients find sustainable solutions to the challenges society faces today including extraction of finite resources, energy and water supply and management, waste management, urbanisation, and climate change. With Golder, clients gain the advantage of working with highly skilled engineers, scientists, project managers, and other technical specialists who are committed to helping them succeed by embedding sustainable development principles and practices in their projects.

We serve our clients as a globally connected community that shares knowledge to

find the answers to technical issues requiring innovative approaches. Our skills at developing client relationships and understanding their business needs enable us to help clients achieve their short- and long-term financial, social, and environmental goals. We are recognised by our clients for our technical expertise and service excellence. The success of Golder’s culture can be seen through our steady growth. Our knowledge of local cultures, languages and regulatory requirements, combined with our global resources, makes it possible for us to help our clients achieve their business objectives around the world and at home.

E. ilopez@golder.com www.golder.com

www.golder.com Golder is a respected, employee-owned, global organisation providing a wide range of independent consulting, design and construction services in our specialist areas of earth, environment, and energy.

Golder office San Juan (Argentina): Iván Lopez E: ilopez@golder.com T: +54 264 4229050 ENGINEERING EARTH’S DEVELOPMENT, PRESERVING EARTH’S INTEGRIT Y

Goldcorp Cerro Negro

Eureka Camp

well. In the three years since the property was without a lost time injury. “This is a great acquired, gold reserves and resources have achievement by the team and it demonstrates nearly doubled. “New discoveries support our that we can continue to work with all of our expectation that Cerro Negro will be a long- personnel to ensure that they return safely lived, high quality asset with low production home to their families at the end of each shift. costs,” says Still. Based on a throughput of People and Safety are core values of Goldcorp 4,000 tonnes per day, annual gold production and this is expressed by our slogan: Safe in the first five years of full production should Enough for our Families!” With the workforce average over 500,000 ounces. now expanded to more than The plant will ramp up to 3,400 people, of whom full production during 2014, 640 are directly employed: that’s a lot of families! which is consistent with last Cerro Negro is a year’s stated expectations.

Safe production remains challenging location. In a fundamental pillar for all the 2012 Fraser Institute activities, and Cerro Negro Annual Survey of Mining successfully completed over Companies, the president 2014 production target 2.5 million hours of work of one producing mining

1,600 tdp

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Goldcorp Cerro Negro company noted: “In the last three years Argentina has BSI is a global organization that equips businesses with the gone from being a place that necessary solutions to turn standards of best practice into welcomed mining investment habits of excellence. Formed in 1901, BSI was the world’s and protected it to one first National Standards Body and a founding member of where nothing is certain, ISO. Over a century later it continues to facilitate business other than the country’s improvement across the globe by helping its clients drive performance, reduce risk and grow sustainably through the and province’s desire to take adoption of international management systems standards, an ever-increasing amount many of which BSI originated. Famed for its marks of of the investment returns. excellence, BSI’s influence spans multiple sectors including Inflation, currency controls, aerospace, construction, energy, engineering, finance, union activism, changing healthcare, IT and retail. laws, corruption, and www.bsigroup.com.mx unwillingness to acknowledge the negative aspects of the changes has made Argentina one of the most difficult places to invest: the country has plummeted from ‘desirable’ to ‘not a chance at the moment’ even though the minerals are largely untapped and the economic benefits to the poorest regions of the country could be enormous.”

Though Chile remains the top-ranked mining jurisdiction in Latin America, Argentina’s attractiveness as a mining jurisdiction has improved, though in Santa Cruz concern over resource nationalism,

BSI

500,000 ounces

Estimated annual gold production over first five years Geologist inside the Eureka mine

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“New discoveries support our expectation that Cerro Negro will be a long-lived, high quality asset with low production costs� and mining opposition in some areas, has stunted investment in the region. The Cerro Negro property is 70 kilometres from the town of Perito Moreno, traditionally a

100 | BE Mining

ranching community. Unlike the northern part of Argentina, the people have not had a long history with mining or metals processing, but this is now changing with

Goldcorp Cerro Negro

Panoramic view of plant construction in Vein Zone area

the development of Cerro Negro and several other mining projects in the district as the town becomes an important source for the supply of goods and labour alike.

As we reported a year ago, Goldcorp’s social policy is something Alastair Still is passionate about and should go a long way to mollify the local nay-sayers. Much of the mine development is being built by a local JV which recruits its own staff. “The idea is that they carry on with the initial underground development work, and at the same time we

work with them to hire and train our own employees, who will become the miners for the extraction phase and continue with the long-term mine development once the main infrastructure is in place.” And as the community will be aware, technology transfer is a major focus for Goldcorp in this region where little in the way of mining skills existed previously. The courses the company has established at the Perito Moreno Trade School are an essential feed of trained people for both the extraction and processing

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TRONADOR is one of the leading companies providing project cargo services to the construction, oil and mining sectors with a strong presence in the Mercosur.

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Goldcorp Cerro Negro Modular Homes SRL

Operator at work inside the mine

functions and a boost to employment in Santa Cruz Province as a whole.

The company is also working with local institutions to identify socially sustainable areas of investment, with the emphasis on partnership. In a recent achievement, Goldcorp has been able to bring a recent Argentinian law graduate into its legal team. “That young lady happens to be from the local Town of Perito Moreno where she was able to obtain a scholarship from Goldcorp to complete her university degree. Now that she has graduated, she has been hired to work at Cerro Negro giving hope for the youth of Perito Moreno that they can obtain a higher education and still come back to work in their home town. She is a great role model for the local community,� explains Still.

This example of a woman entering into the mining profession, which has traditionally been dominated by men, is one area where

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BE Mining | 103

Equipment operating inside the mine

Goldcorp Cerro Negro

3,400 Expanded workforce of Cerro Negro Goldcorp is working to develop personally and professionally the under-utilised female segment of the workforce as an objective of a highly successfully program initiated by Goldcorp called, “Creating Choices”. The program has been delivered successfully throughout Goldcorp’s projects and operations by providing mentoring and coaching to women to empower them to grow and develop their full potential. “Another thing we have done in our search to generate sustainable value for the community”, says Still, “is to partner with the Development Agency of Perito Moreno, a local authority that will work together with leaders in the community continuing to evaluate projects, increasing our participation in developing sustainable development projects.”

But he never loses sight of the business objective: “Our challenge now is to finalise construction of the processing plant so we can begin producing gold as soon as possible. We want this to be a flagship mine for Goldcorp and a world-class mine for the people of Argentina!”

For more information about Goldcorp Cerro Negro visit: www.goldcorp.com

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company in brief Goldcorp Inc. (Goldcorp) is a gold producer engaged in the operation, exploration, development and acquisition of precious metal properties in Canada, the United States, Mexico and Central and South America. As of December 31, 2011, its producing mining properties were consisted of the Red Lake, Porcupine and Musselwhite gold mines in Canada; the Penasquito gold/silver/lead/zinc mine, Los Filos and El Sauzal gold mines in Mexico; the Marlin gold/silver mine in Guatemala; the Alumbrera gold/copper mine (37.5% interest) in Argentina; the Marigold (66.7% interest) and Wharf gold

mines in the United States. As of December 31, 2011, its development projects included the Cerro Negro gold project in Argentina; the Eleonore and Cochenour gold projects in Canada; the Pueblo Viejo gold project (40% interest) in the Dominican Republic; the El Morro gold/copper project in Chile; the Noche Buena and Camino Rojo gold/silver projects in Mexico, and the Cerro Blanco gold/silver project in Guatemala.

MANAGEMENT AND DIRECTORS Ian W. Telfer

Charlene A. Ripley

Chairman of the Board

Executive Vice President, General Counsel

Charles A. Jeannes

Russell D. Ball

President, Chief Executive Officer, Director

Executive Vice President Capital Management

Douglas M. Holtby Independent Vice Chairman of the Board, Lead Director

Lindsay A. Hall Chief Financial Officer, Executive Vice President

George R. Burns Chief Operating Officer, Executive Vice President

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David L. Deisley Executive Vice President - Corporate Affairs

Timo S. Jauristo Executive Vice President Corporate Development

Colette Rustad Senior Vice President, Corporate Controller

goldcorp stock watch

Office Argentina Office Buenos Aires Av. Leandro N. Alem 855, 27th floor Buenos Aires City Argentina, C1001AAD Tel: (54 11) 4323-7000 Email: info@goldcorp.com

Exchange NYSE

Shares 812.23M

Symbol GG

Market Cap. 19,461.07M

Currency USD

Div/yield 0.05/2.53

cerro negro highlights Since acquiring the property gold reserves and resources have nearly doubled, and new discoveries support our expectations that Cerro Negro will be a long-lived, high quality asset with low production costs. Cerro Negro’s ideal physical setting and easily accessible veins will result in near-term, cash flow-accretive gold production. An updated feasibility study in 2011 dramatically expanded the production profile at Cerro Negro. Based on expected throughput of 4,000 tonnes per day, annual gold production in the first five years of full production is expected to average 525,000 ounces. First gold production is expected in mid-2014.

www.goldcrop.com

products • Gold

operating territories • Canada • United States

• Mexico • South America

Key stats and ratios

Q3 (Sep ‘13) 2012 Net profit margin 0.54% 32.18% Operating margin 0.43% 38.62% EBITD margin - 52.36% Return on average assets 0.07% 5.77% Return on average equity 0.10% 7.95%

Financial information from Google Finance and Thomson Reuters

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The golden

touch

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Caledonia Mining Corporation Stefan Hayden, Chief Executive of Caledonia Mining Corporation, explains how a combination of exciting assets and a highly-skilled, passionate workforce and management team have created one of Africa’s leading low-cost gold producers

written by: Will Daynes research by: Robert Hodgson

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No 2 Conveyor discharging onto stockpile at twilight

Caledonia Mining

W

ithout beating around interest in the Blanket mine in Zimbabwe, the bush, the gold which produced over 45,000 ounces of gold in industry as it stands 2012, and a 100 percent interest in the Nama in mid-2013 is under base metals exploration project in Zambia.

The Blanket gold mine re-started pressure and not just when it comes to the recent falls in gold price. production in April 2009, following a This pressure also stems from issues including temporary six month shut-down during the resource nationalism, labour concerns, testing times before Zimbabwe changed political and legislative uncertainty, and its currency to the US dollar, and has been increased environmental requirements. With expanded since to significantly increase these factors having an increasing influence production capacity to 48,000 ounces on the financial performance of gold mining of gold per annum last year. Last year operations in core markets like Africa it is Blanket was the first mining company to all the more important to comply with the Zimbabwe Indigenisation Legislation. recognise the achievements of those businesses that are Meanwhile the recently not only weathering the reconstituted Blanket board have also approved a four storm, but prospering in difficult conditions. year growth strategy for Ounces of gold per “While the drop in the the mine. Estimated to annum achieved by gold price we have seen in cost a total of $37 million Blanket in 2012 recent times now appears the investment programme will be funded from to be recovering slightly, we have remained profitable at these Blanket’s internally generated cash considerably lowers levels, this at a time is expected to result in progressive when much of the industry has been sub- increases in gold production to approximately economic,” states Stefan Hayden, Chief 76,000 ounces in 2016.

Executive of Caledonia Mining Corporation.

As it stands at the time of writing the “We have done so by controlling our costs Blanket mine extends over three kilometres. and the efficient use of labour we have Current work on the asset includes the sinking trained and been able to retain. This has of the new No. 6 Winze shaft. This shaft will allowed to maintain our position as one travel down to the mine’s current production of the lowest, if not the lowest cost listed level of 750 metres and continue down to producer on the African continent and one approximately 1,080 metres below surface. of the lowest cost producers in the world.” While the No. 6 Winze will allow for more As an exploration, development and rapid access to the mine’s ore bodies below mining company focused on Southern Africa, 750 metres, it is only an interim measure, Caledonia’s primary assets are a 49 percent one that will remain in place while the

48,000

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Caledonia Mining company assesses its plans to sink a central shaft that could eventually descend to 2,000 metres.

“One of the major advantages of our operations at Blanket is that we have 18 satellite properties all within trucking distance of our main plant,” Hayden continues.

“Ever since we purchased the mine from Kinross Gold eight years ago we have been continuously investing capital to the point where our metallurgical plant now has a very substantial over capacity for what we are currently producing. Rather than this being a negative issue, we are now starting to take up

Blanket miners on their way to their workplaces

that over capacity by bringing these satellite properties into production as planned.”

Work currently ongoing around the main Blanket mine includes shaft sinking and underground development on one property

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Caledonia Mining

Underground loading a Granby car

and the dewatering of an older mine that also saw Caledonia complete a comprehensive ceased production in the late 1950s. While drilling programme at its Nama Base Metals all of this is ongoing Caledonia continues to Projects in Zambia. This involved drilling some stockpile ore from these operations, rather 10,903 metres over 20 holes, the results of than truck it to the plant, the reason for which confirmed the existence of the copperwhich Hayden goes on to clarify. “At Blanket bearing mineralised zone identified in 2011. we run a huge, highly efficient metallurgical The 2013 drilling programme on the asset plant where we recover gold at better than will include shallow drilling on the identified 93 percent. With this in mind we are simply zone to improve resource definition. Initial not prepared to jeopardise exploration work will also be carried out on additional that recovery by simply throwing ore into it without zones of mineralisation having first carried out that have been identified to extensive test work to ensure the west and south of the that we can adapt a blend mineralised zone. of that ore so that we don’t Turning back to Zimbabwe, Gold recovery at Blanket affect our overall recoveries.� while Hayden does agree that metallurgical plant The 2012 financial year the market there does pose

93%

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several unique challenges, it also possesses considerable benefits which often do not get the coverage or recognition they deserve. “The biggest advantage of working in Zimbabwe is that we are dealing with a very well educated labour force who collectively boast a strong work ethic in everything they do. What we have found as a result is that we are able to utilise this labour efficiently, to the point where we employ around a third of the amount of labour that one of our neighbours employs in order to produce four times as much gold. It goes without saying therefore that we have found it to be an absolute pleasure dealing with labour in Zimbabwe.�

Leaving a positive legacy behind for Zimbabweans is also something that is at

Caledonia Mining

Aerial view of the Blanket operations

the forefront of Caledonia’s thinking when it comes to its operations in the country.

This commitment runs right through the business right down to the fact that it is the only African signatory of the Cyanide Convention. By putting less than 30 parts per million of cyanide onto its tailing dams Caledonia is reaffirming that not only is it safeguarding the welfare of its employees,

but also that of surrounding communities and the region in general.

In accordance with the Indigenisation and Economic Empowerment Act ten percent of the Blanket mine is actually owned by the local Gwanda community, with a further 16 percent held by the Sovereign Wealth Fund of Zimbabwe and ten percent by all of Blanket’s employees. Over and above its holding in the

“The recently reconstituted Blanket board have also approved a four year growth strategy for the mine” BE Mining | 117

“Leaving a positive legacy behind for Zimbabweans is at the forefront of Caledonia’s thinking when it comes to its operations in the country” mine the Gwanda community has also been the recipient of $1 million donation from Blanket, which has also provided it with an advance dividend of a further $4 million to enable it to proceed with various community projects such as clinics, schools and the drilling of boreholes for water.

Other projects that highlight the corporate social responsibility aspect of Caledonia’s business include the building and rehabilitating

118 | BE Mining

of approximately 130 kilometres of hard top and dirt roads around the mine, and the ongoing support the company lends to local schools located within a 20 kilometre radius of its operations. Additionally, Caledonia has to date donated $2 million towards Zimbabwe’s Presidential Scholarship Fund. This fund enables Zimbabwean students based outside of the country to continue their studies at various international institutions.

Caledonia Mining

Panorama view of the Blanket mine and surrounding area

“Skills generation is something we are equally dedicated to facilitating in Zimbabwe,” Hayden enthuses. “As well as the six engineers we graduate on average each year through the country’s School of Mines we also operate a training school at Blanket from which we run more than 1,000 courses per quarter for our employees.”

It isn’t just the company’s employees who Caledonia have incentivised to improve their quality of life. Their dependents have also been encouraged to become more selfsufficient by growing vegetables. In order to help facilitate this the company pumps water from one of its smaller, out-of-use shafts to irrigate crops.

“All the aforementioned work we are doing is being done because we want to

improve the quality of life of our employees and neighbouring communities,” Hayden concludes. “Our employees can see this and a measure of their satisfaction when it comes to working for Blanket can be seen in the fact that our staff turnover figure is low at 0.01 percent per annum. This means that not only are we developing talent but we are retaining it, and that is crucial for any successful mining operation, particularly one that like ours is actively looking to expand, both in Zimbabwe and further afield.”

For more information about Caledonia Mining Corporation visit: www.caledoniamining.com

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company in brief Caledonia Mining Corporation (Caledonia) is an exploration, development and mining corporation focused on Southern Africa. Caledonia holds four, contiguous large scale mining licenses covering approximately 800 square kilometers on the Zambian Copperbelt. The Company’s primary assets are an operating gold mine in Zimbabwe the Blanket Mine, which is a base metals exploration project in Zambia (the Nama Property) and two platinum and base metal (PGE) projects in South Africa (Rooipoort and Mapochs). The Company operates in four segments: Corporate, Zimbabwe, South Africa

and Zambia. During the year ended December 31, 2012, drilling programme at the 100% owned Nama Base Metals Projects in Zambia, comprised 10,903 meters over 20 holes and confirmed the existence of the copper-bearing mineralized zone identified in 2011.

MANAGEMENT AND DIRECTORS Leigh Alan Wilson

Trevor Pearton

Independent Chairman of the Board

Vice President - Exploration

Stefan E. Hayden

Caxton Mangezi

President, Chief Executive Officer, Executive Director

General Manager, Zimbabwe

Steven Curtis

Non-Executive Director

Chief Financial Officer, Vice President - Finance, Executive Director

Dana Roets Chief Operating Officer

Mark Learmonth Vice President - Corporate Development and Investor Relations

120 | be mining

Richard J. Patricio James Johnstone Independent Director

Johan Andries Holtzhausen Non-Executive Independent Director

caledonia mining stock watch

Office Corporate Office 24, Ninth Street, Lower Houghton JOHANNESBURG, ON 2198 South Africa Tel: +27-11-4472499 Fax: +27-11-4472554

Exchange TSE

Shares 52.12M

Symbol CAL

Market Cap. 39.61M

Currency CAD

Div/yield 0.05/6.58

financial highlights •G ross profit for Q3 2013 (i.e. after deducting royalties, production costs, on-mine administrative expenses, depreciation and amortization from gross revenue, but before administrative expenses incurred outside the Blanket Mine) was $7,719,000 compared to $8,631,000 in the preceding quarter and $12,602,000 in the comparable quarter.

• At September 30, 2013, the Company had gross cash and cash equivalentsii of $25,099,000 compared to $22,475,000 at June 30, 2013 and $24,615,000 at September 30, 2012.

www.caledoniamining.com

products • Gold • Cobalt

operating territories • Zimbabwe • Zambia

Key stats and ratios

Q2 (Jun ‘13) 2012 Net profit margin 23.33% 10.52% Operating margin 31.89% 28.96% EBITD margin - 34.28% Return on average assets 20.23% 11.85% Return on average equity 19.76% 17.90%

Financial information from Google Finance and Thomson Reuters

be mining | 121

A mantra of Cerrejón, one of the world’s b do the maximum possible not the minim environmental management the rest of

written by: John O’Hanlon | r

122 | BE Mining

Cerrej贸n

biggest coal mining concatenations, is we mum necessary: in the matter of CSR and f the world has little to teach Colombia

research by: Richard Halfhide

BE Mining | 123

Cerrejón

C

Once mining has ended, the area is rehabilitated

errejón is an integrated mining and transport complex in the La Guajira region, jutting out into the Caribbean Sea from the north of Colombia. The mine is independently operated, but belongs in three equal parts to subsidiaries of BHP Billiton, Anglo American, and Glencore Xstrata: between them these partners approved investment of $1.3 billion in 2011 for an expansion project that will increase Cerrejon’s production and export capacity by 8 million tonnes per annum (mtpa) in 2012 - 2014 to reach a 40 mtpa production by 2015.

The complex includes the open-pit thermal coal mine, a railroad that is 150 kilometres long, and a maritime port at Puerto Bolivar able to receive ships of up to 180,000 tonnes dead weight. The company employs more than 10,000 people, of whom over 99 percent are Colombian nationals, many of these from the La Guajira region. It is the largest private exporter from the country and one of the most important taxpayers in Colombia.

Known for its social and environmental programs, Cerrejón has earned international recognition and awards in these fields. In 2012 the company invested $13.3 million in social engagement projects including education, health, basic infrastructure, culture, entertainment, sports, job creation and fostering programmes of livelihood, productive and entrepreneurship projects aimed to the communities in its area of influence.

T he Cer rejón Fo u n d a t i o n s System comprises four distinct foundations, Water, Institutional Strengthening,

BE Mining | 125

Indigenous Development and Progress – all in La Guajira. Through these, it works closely with the Colombian government and with national and international bodies to promote and accelerate sustainable, fair development for La Guajira and its people. “Over the course of three decades of operation, we have worked hard to make mining compatible with sustainable development concepts,” says Eduardo Lozano, Manager of Cerrejón’s Department of Social Responsibility.

Cerrejón’s commitment to sustainability is reflected in the formulation of its corporate culture and identity model, known as The Cerrejón Way. This sets out its approach to the community, the environment including wildlife and its own employees.

Forming part of the Guajiro, Colombian, and global communities, Cerrejón aspires to be recognised as a company engaged in responsible mining and in this process, which has been applied since the start of mining in the early 80s , it has established itself as a benchmark for comparable largescale projects right across the globe.

The principal facets of this policy are environmental performance and corporate social responsibility, and these are co-ordinated with the local authority in La Guajira through

the foundations. “Our responsibility to the neighbouring communities goes far beyond the role of generating employment and royalties,” says Lozano. “Widespread social engagement and a relationship with the inhabitants of the department of La Guajira are what we aim for.”

Over the past decade the core of the concept of corporate social responsibility has been in

“Our responsibility to the neighbouring communities goes far beyond the role of generating employment and royalties” 126 | BE Mining

Cerrejón

Direct loading of the coal onto the ships, an environmental friendly measure at the port

progressive construction, in conjunction with all the communities and their stakeholder groups, throughout the mine’s area of influence, states the CSR manager in an attempt to depict the participative dimension of the subject. “The organisational structure has then adapted to the findings we encounter.

In our area, as an example, we have around 70 staff professional members dedicated to CSR activities,” says Lozano.

Lozano starts with the Cerrejón Foundation for Water in La Guajira. Established in 2008, its mission has been to work on water supply solutions, promote basic sanitation and hygiene practices, and the environmental sustainability of water sources in an area badly affected by water scarcity. None of

the La Guajira provinces have continuous access to a treated water supply; half its 902,000 inhabitants live in rural areas and of those nine out of ten live in poverty. As one of the most arid parts of South America, temperatures can reach 45 degrees Celsius, and rainfall averages 500 millimetres each year. With up to 2,500 hours of sunshine per year it is also the sunniest part of Colombia.

By 2007, water mains had reached just over half of the province, but only 16.3 percent of the rural areas. The statistics are worse for sewers, which cover just 39 percent of the region and drop to a scant 7.9 percent in the countryside. Areas such as Media and Alta Guajira are so arid that conventional solutions to water and sanitation are simply

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not feasible. This explains why rural La Guajira is so vulnerable to disease and why it presents a considerable challenge to the local authorities. “This Foundation focuses on rural communities that have difficulty accessing water. It researches sustainable alternatives that can be developed and used in the future,” says Lozano. “Training in water conservation is also of the utmost importance,” he adds.

The Foundation for Indigenous Guajira

works to improve conditions for the local people while respecting their culture. There’s a large indigenous population, mainly Wayúu, who form 40 percent of the population, Wiwa and Kogui. These communities face many challenges, among them the invasion of the modern world, the division of their ancestral lands, unemployment and poverty. “As the major employer Cerrejón needs to ensure that the rights of the indigenous

“As the major employer Cerrejón needs to ensure that the rights of the indigenous communities are met”

Kamüsüchiwo>U school located at High (Alta) Guajira, where Cerrejón has devoted resources and support to the Bilingual Intercultural Programme

128 | BE Mining

Cerrejón

Eduardo Lozano leads a health brigade at one of the communities in Puerto Bolívar

communities are met,” he says. “Among the things the Foundation can do is to promote sustainable initiatives and innovation focused on the areas of education, community development, and healthcare.”

The Foundation for Institutional Strengthening exists to ensure better social investment of public resources. One initiative it has launched is Tecnocerrejón, whose objectives include education opportunities for people living in the mine’s area of influence, giving Cerrejón employees skills they need to keep up with changes in mining technology.

“The training offered by Tecnocerrejón is designed to allow them to enter the labour market, start their own business, continue their higher education or combine study with work until they earn a technical or

professional degree.” Tertiary education is guaranteed to qualified candidates by several Colombian universities.

Though the mine will continue to drive the economy of La Guajira for many years to come, no resource lasts forever. So it’s an important goal for the company to help generate alternative projects that allow the community of La Guajira to take the benefit of the wealth created by mining and prepare for the day when the coal resources start to disappear. The Cerrejón Foundation for Progress looks ahead to 2034 when the mine’s contract expires. “The region needs to find new economic and social development activities,” emphasised Lozano. “We have fantastic attractions, dependable sunshine, great beaches, and the Foundation has

BE Mining | 129

“We are committed to prevention, mitigation, and compensation for the effects of our operations on humans and animals alike�

The new site at Chancleta forms part of the resettlement programme

130 | BE Mining

Cerrejón already managed to attract investment for a four star hotel complex here.” Waya Guajira, is the first LEED certified hotel & museum complex in Colombia. It will do a lot to promote a new generation of entrepreneurs, building a significant tourist industry without impacting ecosystems and local culture.

One of the most important values for Cerrejón is its guardianship of the environment. “Mining will always produce environmental effects, however, at Cerrejón, when we talk about the environment, we are not just talking about a department or an individual,” says Gabriel Bustos, Manager of the Department of Environmental Management. “We are talking about the organisation as a whole, from the President to the contractors. We are committed to prevention, mitigation, and compensation for the effects of our operations on humans and animals alike.”

The first thing that happens when a new area is being looked at for mining operations is an inventory of the wildlife in the area, with any stressed species being relocated: at the end of its life it is rehabilitated as close as possible to its original state or better. Last year $55 million was invested in environmental management programmes

A P&H shovel in operation

including environmental monitoring and control systems, undertaking special studies, and establishing environmental buffer zones.

And with the participation of Conservation International and the local environmental authority Corpoguajira, Cerrejón supported the creation of a nature reserve in the department of La Guajira, which covers 8,484 hectares of tropical dry forest, hosts endemic species, and is a vital source of water.

In September this year Cerrejón received, for the second time, the Gold Seal of the Siembra

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Part of the Livelihood project focuses on a different ways to earn a living

Gabriel Bustos

“An important aim in the future will be to attract investment to develop sustainable projects in the region” Colombia Foundation at its Expoambiental 2013. The mining operation earned 8,716 of 10,000 possible points, the highest rating among the participating companies either public or private. Fabio Arjona, Director of Conservation International, said: “Cerrejón has the ability not only to mitigate and minimise the environmental impact, but also to leave a positive balance in many environmental actions. In short, it is not only

132 | BE Mining

about respect for the environment, it is about improving the environmental conditions prior to mining.” Receiving the award was no accident, says Bustos: “We are constantly striving to strengthen and improve this area of environmental management. This award shows just how hard we are working. We have a motto hacemos lo máximo posible y no lo mínimo necesario (we do the maximum possible not the minimum necessary).”

Cerrejรณn

s at the turtle protection program

Cerrejรณn waits years before withdrawing from the Green Bank

At the end of the day, large-scale mining will have some disruptive impacts on the environment, the population and the economy.

It is for a company like Cerrejรณn to see that positive actions will mitigate and balance enough the impacts as far as possible. One regrettable but occasionally necessary effect of mining is on those communities unlucky enough to live right on top of the resource.

Cerrejรณn sees resettlement as a last resort, but also as an opportunity for dialogue with the communities, for improving their standard of living, and for the creation of social capital.

They hope that the resettlement processes that they have been managing will strengthen the sustainable development of La Guajira.

Maybe nothing can really compensate a family for being forced to move from

its home village even if they lived a very meagre existence there. However in their new locations the communities have 24 hour access to drinking water, education centres, parks, internet/Wi-Fi, health centres, churches and the like. When constructing the new settlements, a very important aspect is education as there are many young people within the communities. Cerrejรณn initiates an education project for each of the resettled communities so that once children leave school they can go to university and then work towards a career. This means that the future of these communities is strengthened through their access to quality education.

So while working with resettled communities can at times be painful, Eduardo Lozano is very assiduous in easing that pain.

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“When anyone is faced with having to move to a new location, it can be daunting. There are natural concerns,” he admits. “But at Cerrejón we do our best to deal with any worries that the communities may have. We also make sure that relocation impacts are duly identified with the families and proper compensation response is provided, including housing and social programs. Once resettled in their new location, the community not only preserves its rural nature, but it turns into a community recognized by its social neighbors, and capable to enhance its development possibilities. In most cases, the initial concerns of the people change to vision, hopes and dreams. It is an opportunity for social transformation!”

Social responsibility is an activity without end, and can always be improved. Lozano would like to see a better consensus between Cerrejón and the other organisations that can influence sections of the community the company doesn’t interface with directly: children, teenagers, the elderly and other groups not included in the workforce. A permanent engagement with other organisations and their institutions across the society primarily at La Guajira, and the Caribbean region indirectly, where the best of the Cerrejón community engagement model permeates, it would make a difference, he feels. “An important aim in the future will be to attract other types of social investment to develop further sustainable projects in the region.”

For more information about Cerrejón visit: www.cerrejon.com

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The “City of Riohacha” locomotive, painted as suggested by the Wayuu communities, pulls between 95 and 110 wagons during its 150km trip from the mine to Puerto Bolívar Port

Cerrej贸n

company in brief Cerrejón is an integrated mining and transport complex in La Guajira, a department in the northernmost section of Colombia. It includes a thermal coal open-pit mine that produces 32 million tonnes a year, a railroad that is 150 kilometres long, and a maritime port able to receive ships of up to 180,000 tonnes dead weight. The company employs 10,000 people, of which over 99% are Colombian nationals. It is the largest private exporter and one of the most important tax payers in Colombia.

Cerrejón is known for its social and environmental programs, which have earned it international awards. The Cerrejón Foundations System comprises four foundations. It works

closely with the Colombian government and with national and international bodies to promote and accelerate sustainable, fair development for La Guajira and its people.

Cerrejón is independently operated, but belongs in three equal parts to subsidiaries of BHP Billiton, Anglo American, and Glencore Xstrata.

Shareholders Cerrejón is owned in three equal parts by BHP Billiton plc (Australia), Anglo American plc (South Africa), and Glencore Xstrata plc (Switzerland).

Cerrejón coal supplies the sector of electrical power generation, mainly in the markets of the Atlantic Ocean, North America, Europe, and Latin America, with minor sales in the Pacific.

• BHP Billiton An Australian-English company whose stock is traded on the markets of Melbourne and London. Its business portfolio is diversified and includes the extraction of iron ore, petroleum, coal, and special products (diamonds, etc.)

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• A nglo American A South African-English company. It has mining operations around the world, mainly in South Africa, Australia, and the Americas. Its business portfolio focuses on coal and base metals: copper and iron ore, amongst others • Glencore Xstrata One of the largest global diversified natural resource companies. It produces and markets over 90 commodities structured into three distinct business segments: metals and minerals, energy products and agricultural products.

cerrejÓn Integrated Operation Cerrejón’s coal-mining operation operates under the highest standards of safety and quality, and it is committed to delivering a product low in ash and sulfur to the international market, thereby generating less impact on people and the environment.

The strength of Cerrejón’s operations is the integration of the production processes (mine-railway-port), which guarantees greater efficiency to the operation overall and less impact on the environment.

Mine • Located between the municipalities of Albania, Barrancas, and Hatonuevo in La Guajira, it has estimated resources of 1.961 million tonnes of coal.

• The Mine is the site of the daily activities involving coal production, maintenance of mining equipment, and support services for the operation.

• It has several active pits: Patilla, Tabaco, La Puente, Oreganal, Tajo 100, and Comuneros.

• The equipment and machinery used at the Mine are amongst the largest of their type in size and capacity: more than 240 trucks of 320, 240, and 190 tonnes in capacity.

• Cerrejón uses state-of-the-art technology in the operation and maintenance of its mining equipment, receiving hoppers, crushing plants, conveyor belts, and two silos.

Railway • The only wide-gauge railroad in Colombia. 150 kilometres of track connecting the Mine with Puerto Bolívar.

• It has 562 coal cars, each with an individual capacity to carry 96 to 110 tonnes of coal.

• The cargo is levelled, wetted, and compacted as an environmental control measure to prevent dust emissions during the haul.

• Trains are also used to transport basic supplies necessary for Mine operations, such as diesel fuel, tyres, equipment, spare parts, and so on.

• The round trip, including loading, transportation, and unloading of coal, takes about 12 hours.

Port • Located in Bahía Portete in the Alta Guajira, this is the most important coal terminal in Latin America and one of the largest in the world.

• It has had a direct-loading system since 1985.

• The port can accommodate ships of up to 180,000 tonnes dead weight, up to 300 metres in length, and up to 45 metres in beam.

• The navigable channel is 19 metres deep, 225 metres wide, and four kilometres long.

• The average annual loading rate is 6,300 tonnes an hour, with peaks of up to 11,000 tonnes an hour.

• It also has a commodities pier to dock ships of up to 30,000 tonnes carrying machinery, spare parts, fuel, and other materials for the mining operations.

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Growing on goodwill

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Lubritene (Pty ) Ltd Lubritene is a South African registered company, specialising in the manufacture of high performance greases, compounds and oils: a statement that barely describes a company that enjoys remarkable symbiosis with its clients

written by: John O’Hanlon research by: Robert Hodgson

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Lubritene (Pty ) Ltd

M

ining operations rely on Typically the major oil companies approach their equipment, and there’s the market from the outside in, providing a no doubt that each site has product that meets OEM specs. Lubritene a lot of moving parts in its has always approached it from the inside out conveyors, trucks, shovels, – starting with the equipment’s user. “Our milling and grinding trains, not to mention model is that we supply a product specifically its associated drilling programmes. All of this designed for the machine,” says Dave Gons, has to be nursed and protected with the right Lubritene’s Sales Director. “We try to keep in oils and greases. As any operations manager line with OEM specs and if we do have a spec knows, lubricants can be a big budget item we try to exceed it.” and one that pays back in proportion to But more important is that the product its contribution to things like frequency of works in the field. The big companies are maintenance, equipment life not always hot on service: a and the avoidance of running customer may be pressured problems that involve into using an OEM product stopping the machine. for fear of nullifying his The market is crowded and warranty but will think to a large extent protectionist again when the warranty Years since Lubritene in nature. The big oil expires and he realises he was founded companies all sell their own has been paying a large brand specialist industrial premium for something that oils. Some equipment OEMs list approved originates from an unknown third party, suppliers; others provide a spec; some even with indifferent support.

Other larger customers use their buying sell their own branded lubricants, made for them by third parties, and try to compel the power to insist on keeping their long-standing relationship with Lubritene, which at a mines to use them by warranty sanctions.

But this very market has been Lubritene’s large site is likely to have its own personnel opportunity. The privately owned company, permanently on site, looking after all its which started life around 16 years ago as lubrication requirements. “Backup service the spin-out of the lubrications division of comes as part of our package, and when these a more diversified chemicals company, has customers procure new machines they are not made a point of staying the right size. It has about to be told they have to change the way also steadily grown its own range of products they have operated for many years.” There’s specifically designed for mining applications always another supplier, he points out. including earthmoving equipment like There may be two permanent Lubritene draglines, shovels & dump trucks, drilling engineers at a large Anglo Coal mine, rigs and a variety of equipment in open cast equipped with their own vehicles. The relationship is a close one – almost a family mining operations.

16

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Quality and Consistency in every drop Group 1 Base Oils • Solvent Neutrals • Bright Stock Tudalen Process Oils • Aromatic • Paraffinic • Naphthenic Agricultural Spray Oils

Industries we serve • Lubricants • Agriculture • Printing • Rubber/ • Tyre • Plastics

The H&R Group of companies has been built on a reputation of consistent supply of the highest quality oil products marketed under the globally trusted TUDALEN brand. Our commitment to product and service innovation ensures focus on improving customer value.

Through our global network of companies H&R delivers what you need, where you need it and when you need it.

Lubritene (Pty ) Ltd relationship at the mine site, says Gons. “It doesn’t matter what mineral they mine: our business is to look after the machines and we have a very strong relationship with the mining groups going back many years.”

The lubricants, branded as Lubrene, are manufactured on the company’s site at Edenvale near Johannesburg.

There are separate plants for each of the different products – open gear lubricants for example, non-melt grease or drilling core fluids as well as synthetic oils

for enclosed gearboxes.

In 2006 the management of the company discussed the next phase of its expansion, realising the domestic market was reaching saturation. It was decided that the next target should be Australia, where there was growing interest in Lubritene’s product and service model. A subsidiary company was set up there, and to cope with the increased demand a new six-ton capacity grease plant commissioned at the factory.

Seven years later the company is well

H&R SOUTH AFRICA SALES (PTY) LTD. H&R was established in 1919 in Hamburg

by Heinrich Hansen and Emil Rosenthal.

Now with an expanded product range that is supplied into diverse industries, including Lubricants, Candles, Agricultural, Printing, Telecommunications and Power Transmission, Tyre and Rubber and Personal Care and Cosmetics. The product range includes base oils, a full range of straight and blended waxes and wax emulsions, petroleum jellies, cable filling compounds, agricultural spray oils and a full range of process oils. H&R South Africa serves as the anchor on the African Continent for a truly global Group. Our superior quality products and consistently superior supply chain activities allows us to offer the best quality products at competitive prices.

H&R South Africa is a proud member of the Recycling Oil Serves the Environment

foundation and proudly associated with the Independent Lube Blenders Association of South Africa. Other industry memberships include the Society of Cosmetic Chemists of South Africa, Institute of Materials, Minerals and Mining and an associate membership to Sedex, an organisation dedicated to ethical and responsible business practices.

At H&R South Africa, we pride ourselves in being part of Global sales network that has supply partnerships with respected industry leaders. We are fully equipped and trained to provide unparalleled customer service and management while supplying the highest quality products at the best value across the continent of Africa.

E. SAsales@hur.com www.hur.com

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Unichem Services Unichem Services (Pty) Ltd in South Africa is a specialty chemicals company, marketing and distributing fine chemicals, automotive, grease & industrial additive packages, Group I, Group II & Group III base oils, synthetic base oils (Group IV-V), white oils, fuel & dye markers, PPDs, VIIs, PIBs, Petroleum Sulphonates, 12HSA, HCO, Lithium Hydroxide, Molybdenum Disulphide and other specialty products.

UNICHEM’s ability to provide synthetic technology solutions to lubricant blenders and grease manufacturers, whilst providing overall cost and energy savings through more environmentally aware and technologically capable

products, has been one of our key service attributes, which we have passed onto our customers and in turn the end user.

E. sales@unichem.co.za www.unichem.co.za

Lubritene (Pty ) Ltd

established in the Australian market, with Gons has been able to advance his personal offices in Perth and Brisbane. At one time it dream of capturing the wider African experimented with local toll manufacturing market. “We supply neighbouring Namibia, but unsatisfied with the quality and Mozambique, Botswana and all the way up consistency it drew back to supplying direct into Mali, and Tanzania.” from South Africa. Better a dependable Service levels in these territories are no product than saving a few dollars in less than in South Africa. With 40 vantransportation costs, he says. equipped engineers ready to fly out to a mine Lubritene is used to requests from other if it is not close enough to drive to, Lubritene parts of the world too, largely will not compromise on the driven by the diaspora of service that differentiates it.

Gons is undismayed by the mining engineers from competition that undoubtedly South Africa. The latest exists. “You need to know new office was opened in Santiago, Chile, where it is your position in the market Year Lubritene Australia servicing the booming South or you know nothing at all!” was founded American market. And Dave he declares, “Our model is

2006

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“We try to keep in line with OEM specs and if we do have a spec we try to exceed it” a bit different from theirs. They have tried to open service divisions but they provide a service for a period, then it breaks down or they outsource it to a generalist” Service is not the only differentiator though. “Most of our products arose from problems at mines that we were approached to solve. If you are faced with a persistent problem and ask one of the big players

146 | BE Mining

to make a grease with special properties to solve that – forget it. They have a list of products that they work from. We are completely different.”

In such a situation he will travel to the mine, accompanied by a chemist, and analyse the problem with the customer’s engineers, testing the product they have been using.

Back in Gauteng, Lubritene’s R&D team will

Lubritene (Pty ) Ltd

work on a customised sample then return to the mine to test it. “If it works, well and good; if not we try something different till it does work! Unlike the large companies I can talk to my chemist any time, tell him what I want, and he can do it. No red tape.”

And once the right product has been formulated, that product is thenceforward available to that customer. In a recent case, a large mine near the Namibian coast had problems associated with the regular 20-degree daily temperature swing in that climate. No existing product could cope with that so Lubritene made one: “It is made specially for them and it is their grease. The quantity is not a problem.” Try getting one of the majors to develop a special product

then manufacture just four tons for a single customer, he says. It won’t happen.

There’s no pressure on Lubritene to grow exponentially – one of its strengths is that it is right-sized. Nevertheless the breaking news is that it is on the point of commissioning a new 16-ton grease plant. Joining the existing four-ton and eight-ton kettles, this one will keep a growing band of satisfied customers happy. Not just the customers. Lubritene, he says proudly, enjoys vanishingly small staff turnover rates.

For more information about Lubritene (Pty) Ltd visit: www.lubritene.co.za

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company in brief Lubritene (Pty) Ltd is a South African registered company, specializing in the manufacture of high performance greases, compounds and oils. Lubritene focuses on the development, manufacture and distribution of a wide variety of grease types, such as aluminum complex, lithium, lithium complex, clay base and other types and mixes.

The Lubrene product range focuses on the lubrication of several niche applications such as earthmoving equipment (draglines, shovels & dump trucks), drilling rigs and other equipment in

open cast mining operations. Several branches and agents/distributors are located near these operations in remote areas within Southern Africa. We have agents in the far east Australia and Africa. The head office and manufacturing facility is situated in the center of the South African manufacturing and industrialized area.

Applications

Office

Open Pit Operations • Drill Lubrication • Total Dragline Lubrication • Rope shovel and Haul truck Lubrication

Head Office 6 Molekule Street, Chloorkop, Gauteng

Plant Operations • Grinding Mill Lubrication • Steel Industry Lubrication • A typical centralised lubrication system

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Tel: +27 11 976-2944 Fax: +27 11 393-1707 E-mail: tiaan@lubritene.co.za www.lubritene.co.za

Lubritene (Pty) Ltd Products & services Open Gear • Lubrene Multi-Serv OGL • Lubrene OGL-E • Lubrene OGL-E Heavy • Bio-Serv OGL Greases • High Speed - General Purpose Grease • High load Grease • High Temperature Grease • Waterproof Grease • Special Grease Gear Oils • Lubrene Anti Leak Gear Oil • Lubrene Super Series Gear Oils • Lubrene GO 1000 SYN • Lubrene SYN 1500 Gear Oil • LUBRENE Synthetic PAG Environmentally Friendly • Lubrene Core Fluid • Bio-Serv OGL • Lubrene Bio-Rod Grease Other Products • Lubrene Syn Chain Oil Ht • Lubrenervs Syn • Lubrene Wire Rope Lubricant • Lubrene Rdo 220 Hl • Lubrene Core Fluid • Lubrene Rr Lube • Wow Non-Flammable

• Lubrene Oven Lube • Running-In Fluid • Lubrene Thread Compound After Sales and Field Services • Inspection of equipment where product is being used, temperatures will be taken with infra red thermometers, strobes for gear inspections etc • A utomatic lubrication check for both mechanical and electrical faults • Advice on fine tuning the systems to use optimum volume of lubricants • Monthly reports containing lubrication consumption, gear inspection & conditions, and general recommendations • Vibration analysis, limited analysis of critical points included in the monthly report if required, also a full vibration analysis before and after change-over • Half yearly gear mould for the first two years then once yearly Lubrication Systems Sales & Installation • Supply and installation of dispensing equipment and systems • Supply of a wide range of components • Supply of maintenance contract - repair of dispensing equipment • Supply of consulting and information services

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Delivering quality o

where it’s needed

Global Sourcing & Supply (GSS’s) multi-disciplined app business has allowed it to become one of the foremost p of complete site support services and operations in all o

written by: Will Daynes | research by: Gareth Hardy 150 | BE Mining

Global Sourcing & Supply (GSS)

of life

most

proach to providers of Africa

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GSS catering service

GSS

W

orking to the highest international standards, Global Sourcing & Supply (GSS) is an integrated facilit y management and contract supply operation supported by an advanced logistics capability.

GSS is a wholly owned subsidiary of BMMI Group, headquartered in the Kingdom of Bahrain, and currently operates in Qatar, Iraq, Djibouti, Mali, Gabon, Ghana, Burkina Faso, Kenya, the Republic of Sudan and South Sudan, providing flexible options for logistics and service delivery and engaging with a multitude of international governments, non-government organisations and industrial clients.

The GSS team also provides complete site support services and offers turnkey solutions in the establishment and management of remote site operations to industries as diverse as mining, construction, agriculture, oil and gas.

With Africa’s remarkable growth, driven in large part by a minerals and energy boom, numerous companies seized the opportunity to explore new oil rigs in the region which opened the door for GSS to expand its integrated facility management solutions and contract logistics. In recent years, GSS has managed to successfully cater to the needs of major companies delivering quality services in the most rigorous locations in Africa.

When it comes to Integrated Facility Management (IFM) solutions, GSS covers the entire spectrum, from the provision of prepared meals and a range of ancillary ser vices inclusive of housekeeping,

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laundry, operations and maintenance, to camp retail (commissary) services and leisure requirements.

GSS understands the importance of delivering quality services in the most remote locations in Africa and therefore it ensures that it caters to its clients, using only the best quality, handpicked ingredients. The company’s catering staff ensures all food is

expertly displayed and served hot and fresh from the pan. Service options range from selfservice cafeterias to retail coffee shops and seated, full service à la carte style.

In terms of the company’s janitorial services, GSS’ satisfaction lies not only in making sure its clients reside in clean and comfortable surroundings, but also for them to experience the high quality services provided

“GSS has managed to successfully cater to the needs of major companies delivering quality services in the most rigorous locations in Africa”

GSS cleaning/janitorial services

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GSS

GSS laundry service

by its team. It is GSS’ goal to clockwork, its team provides door-to-door pick-up and pay attention to every single drop-off of laundry, handling detail and to keep its clients’ workplace tidy and their all clothes, uniforms and lodgings homely, to meet and linen with the utmost care.

Tons of goods handled exceed their expectations.

As GSS’ ultimate goal is continuously by GSS’ Through the years, GSS to ensure its clients get their major prepositioning has built its reputation work done in a safe and well warehouse protected environment, the on providing outstanding company is constantly looking cleaning services using state of-the-art equipment, environmentally to utilise advanced systems with customised preferred products and unique cleaning solutions to protect every aspect of its client’s processes to ensure clients’ facilities are company assets. Its services in this field range cleaner and healthier than ever before. from 24-hour security, entrance control and GSS’ complete range of laundry options central control to remote monitoring of CCTV includes Express, Same Day and Overnight and security system audits. services for guest and employee laundry. Like GSS has been actively supporting customers

30,000

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GSS can source temporary structures

“GSS truly believes that over the next few years it is likely to grow and continue to attract and retain clients in the oil industry� in Africa with major contract logistics capabilities for several years. An example of this is a major prepositioning warehouse operation in East Africa handling up to 30,000 tons at any point in time including receipt, warehousing and redelivery of bagged commodity items in support of humanitarian efforts in the Horn of Africa.

In addition, GSS provides sourcing services for components, spare parts, repair engine

156 | BE Mining

parts or any FFE requirements. Preferred supplier agreements in all major markets allow its dedicated team to match up customer requirements with a manufacturer’s part number, sometimes within hours. The company then ships to remote locations, expediting the order within 48 hours. Its suppliers cover all aspects of technical supply and demand, no matter how big or small.

Utilising a multi-model approach, GSS has

GSS

GSS contract logistics

supported rations in contingent and active war zones, while maintaining full product integrity throughout the supply chain so that it arrives fresh for troops. Furthermore, it has trading agreements in place with major suppliers and is able to process requirements through varied consolidation capabilities within a short span of time.

GSS’ team is also capable of sourcing, shipping and fully integrating the provision of temporary structures for accommodation, kitchens, messing, recreation, offices and retail.

During the past few years, GSS was faced with uncertainty driven by increased competition, geo-politics and economic indicators in the African region. However, with GSS’ solid experience and reputable

GSS camp design

name in the African market, it has managed to enter new countries, secure new contracts and enter new acquisitions and joint ventures this year.

The future of Africa looks promising and therefore GSS truly believes that over the next few years it is likely to grow and continue to attract and retain clients in the oil industry. This high demand for its IFM solutions has been also driven by its exceptional services provided by its experienced and skilled technical staff across the industry.

For more information about Global Sourcing & Supply (GSS) visit: www.gss-contracting.com

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company in brief Global Sourcing & Supply is an integrated facility management and contract supply operation supported by an advanced logistics capability. A wholly owned subsidiary of the BMMI Group of Companies, GSS currently operates in Bahrain, Qatar, Djibouti, Mali, Gabon, Ghana and Sudan, providing flexible options for logistics and service delivery and engaging with a multitude of International Governments, NGOs and Industrial Clients.

History GSS is the contracting operation of BMMI, which is a fast-growing multinational organisation with over 125 years of uninterrupted operations in the Arabian Gulf. GSS has in the past two decades evolved from a ship chandler for naval vessels in Bahrain, to an efficient operation run from 7

platforms in the Middle East and Africa. GSS now offers turn-key solutions in the establishment and management of remote site operations to industries as diverse as mining, construction, agriculture, oil and gas.

GSS applies its extensive knowledge of the operating environment, marketplace and technical performance drivers typical of an efficient programme management approach.

It’s in-depth understanding, expertise, and broad capabilities, allow GSS to self-perform almost every aspect of site support services, resulting in high-value competitive pricing for clients.

operating territories

Office

• Bahrain • Djibouti • Gabon • Ghana • Kenya • Mali • Qatar • Sudan

Head Office – Bahrain PO Box 828, Manama, Kingdom of Bahrain

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Tel: +973 17 739481 Fax: +973 17 730294 www.gss-contracting.com

GSS MANAGEMENT AND DIRECTORS

Services

Brandon Smith

• Integrated Facility Management • Contract Logistics • Technical Sourcing & Supply • Rations and Technical Procurement • Camp Design and Temporary Structures

Vice President – Operations, Bahrain

Sivakumar Lakshman Vice President – Group Finance Operations, Bahrain

Carla Geday Director, Business Development, Washington DC

Marc Starke Area Manager, East Africa, Kenya

Kevin Guild Country Manager, Djibouti

Krishnen Venkatachellum Operations & Station Manager, Republic of South Sudan

Robert Smith

capabilities • Active remote site support operations throughout Africa and the Middle East • Broad and technically strong life support capabilities • Cultural understanding and access to regional resources • Intimate knowledge of operational challenges at remote environments • Proven mobilization experience substantially mitigates execution risk • Focused priority on maintaining HSE and QA/ QC compliance

Executive Vice president, Bahrain

Philippe Sabatie Area Manager, West Africa, Mali

Colin Mason Country Manager, Ghana

Peter Zandvliet Country Manager, Republic of Sudan

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Allied Mining Services Limited

Bringing the world to East Africa With a history of 13 years in the mining industry and two generations of experience in the procurement sector, Allied Mining Services Limited continues to be a key contributor to East Africa’s growth

written by: Will Daynes research by: Candice Nice

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Allied Mining Services Limited

A

s much of the Western world spent the latter years of the last decade and the first few of this battling the global recession, the economies of Tanzania, Kenya, Rwanda, Uganda and Burundi have flourished. With each country experiencing economic expansion of between five and ten percent during the years during and following the crisis it comes as little surprise that East Africa has since been considered the core of Africa’s growth.

In recent years the prosperity of the region has benefited countless companies and businesses, particularly those that inhabit leading positions in their respective fields. Allied Mining Services Limited is a major supplier and stockist of mining, construction, industrial and agricultural products in and around East Africa.

With a history of many years in the mining industry, not-to-mention two generations of experience in the procurement sector, Allied has achieved a strong foothold in the mining and construction market sectors. From what was once a small retail shop the company would go on to become one of the fastest growing businesses in Tanzania.

“Thanks to the experience of two generations, as well as an apt and powerful team, and our ‘Yes’ mentality we have seen the business go from strength to strength,” states Managing Director, Ashish Pattni.

“In that time our team has been able to gain extensive knowledge, expertise and understanding of the market which, when combined with their high degree of expertise, allows them to provide the type

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Expert cure for sourcing headaches Distributors of:

Stockists of:

Sourcing the right products for your mining or construction business can be time-consuming and problematic. That’s where Allied Mining Services Limited can be a life-saver. As one of East Africa’s leading suppliers and stockists of mining, construction, industrial and agricultural products, we have years of experience in the procurement sector. And thanks to our close links with major brands, we can source top quality products worldwide at very competitive prices. So why not let Allied Mining Services Limited take away your sourcing headaches.

• Hardox wear plates • Toyota parts & accessories • Safety & PPE products • Lifting equiptment • Slurry pumps & parts • Mild steel products

• Welding equiptment & electrodes • Bearings & batteries • Power tools • Mine marking spray paints • PVC bore hole casings & pipes • Industrial high pressure cleaner

ALLIED MINING SERVICES LIMITED Tel: +255 28 2571 561/562/563 | Fax:+255 28 2571 564 | mining@alliedgroup.co.tz WWW.ALLIEDGROUP.CO.TZ Allied Mining Services Ltd, Nyakato Industrial Area, P.O. Box 2260, Mwanza, Tanzania

header folio

of service that drastically reduces the end user’s time and money.”

Professionalism has always been the quality that Allied has considered to be its core strength, something which it ensures goes hand in hand with ensuring 100 percent customer satisfaction. “We pride ourselves in ensuring customer satisfaction is our number one priority, continuously striving for excellence,” Pattni continues.

Allied’s excellent track record over the

years has meant that it is today partners and distributes a wealth of major brands and products commonly used throughout the mining sector, a fact that allows the company to source solutions world-wide at an affordable price. Among the key product manufacturers that Allied can call itself a distributor of, one can list 3M, Uvex, Heckel, Hardox Wear Plates, Yale Lifting Equipment, Buccaneer Pumps, Ridgid Power Tools, Karcher to name but a few.

“We pride ourselves in ensuring customer satisfaction is our number one priority, continuously striving for excellence” be weekly | 165

More recent developments have seen the company agree partnerships with a number of other reputable players, specifically Heckel Footwear, Karcher High Pressure Cleaners and Ridgid Power Tools. In addition to this, the company has gained a fleet of vehicles that will now be used for transportation and leasing and hiring.

“Our manufacturers are carefully shortlisted and tested to ensure we provide the best quality products, abiding by ISO standards,” Pattni highlights. “Allied is a highly reputable and reliable company where the end user can be assured to be the recipient of paramount service that exceeds all expectations. This means that we are commonly referred to

“Allied has been the heart and soul of East African development, boasting years of experience in the industry and market sector” 166 | BE Mining

Allied Mining Services Limited

as the one-stop supplier and fact that we exist as one of the key players in one of the stockists for all requirements within the mining and country’s leading business construction sector.” sectors and that we continue Tanzania has long been to improve ourselves with Experience that the one of the major contributors each passing year.” company has of operating to East Africa’s growth and Allied has been the heart within the mining sector and soul of East African Allied has been operating in the country since its own development, boasting years inception, playing its part in of experience in the industry the development of the country, something and market sector. “We pride ourselves in that it has been justly recognised for. “In being one of the number one suppliers in 2011,” Pattni explains, “we were honoured Tanzania and one that has taken growth to to become the recipient of the “Second-Best another level,” Pattni explains.

Tax Payers Award” by the Tanzania Revenue With the world’s eyes having increasing Authority. To us this further reinforces the turned to Africa in the last several decades

13 years

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“It does not matter in which area a business is located, sustainability should be the key core value of the company” in the pursuit of investment and business opportunities, the importance of the fact that Allied has been present in the market for so long is certainly not lost on Pattni.

“The mining and construction markets have long been, and continue to be, hugely important to Tanzania’s growth as a nation.

By being ever-present in the country we have enabled ourselves to remain ahead of

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the curve in comparison to a great many of our international competitors that are relatively new to the scene.”

As well as contributing to the economic development of Tanzania, Allied also has a long track record of playing a role in improving the sustainable growth of the mining and construction sectors, something that has risen from the fact that the company

Allied Mining Services Limited

believes that sustainability should be the driving force behind any business, which is in turn incorporated into its core values.

“In an ideal world, any company would like to sustain their business for a life-time,” Pattni explains. “Therefore it does not matter in which area a business is located, sustainability should be the key core value of the company and as such one should always work to ensure that this train of thought grows horizontally and vertically within their business model.

We at Allied Mining believe this and always ensure we adapt to the market requirements to ensure sustainability is always achieved.”

In much the same way as Pattni believes that sustainability should be a goal that all businesses strive towards, he also recognises

that for any business the ultimate goal should be to become the leading figure in its chosen field and sector. “In many ways,” he concludes, “Allied Mining has already achieved this goal in Tanzania and as such it is now our job to retain this position in the marketplace. Meanwhile, it is now our aim to focus towards the rest of East Africa and provide the same services to the mining and construction sector in countries across the region, doing so on the basis of what we have achieved in Tanzania.”

For more information about Allied Mining Services Limited visit: www.alliedgroup.co.tz

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company in brief Allied Mining Services Limited is a major supplier and stockiest of mining, construction, industrial and agricultural products in and around the East Africa Region. With a history of 13 years in the mining industry, not to mention two generations of experience in the procurement sector, AMSL has achieved a strong foot-hold in the mining and construction market sector.

This has enabled our team to gain vast extensive knowledge, expertise and understanding of the marketplace. With the team’s high qualification and experience, it allows them to provide the type of service that drastically reduces your time and money. Professionalism is strived upon by all team members. We are closely linked with major brands in the mining sector, hence enabling us to source world-wide at an affordable price. Our

manufacturer’s are also carefully short listed and tested to ensure we provide the best quality of products to offer abiding by ISO standards.

AMSL is a highly reputable and reliable company that you, as the end-user can be assured to be the recipient of paramount service that exceeds all expectations.

Allow us at Allied Mining Services Limited to take your sourcing headaches away. At AMSL, our sole endeavor is to assist your mining and construction business to grow and expand in Africa as effortlessly and efficiently as possible.

Procurement Team

Office

We are flexible in meeting our customer’s needs by providing sourcing capabilities for products that are not in our general stocks.

Just provide us with the product details and we shall source the products for you at competitive prices, on-time delivery and paramount quality.

Linked with our logistic supply network, we are able to drastically cut-down delivery times and increase our ordering efficiencies.

Allied Mining Services Limited Nyakato Industrial Area P. O. Box 2260, Mwanza Tanzania Tel: +255 28 2571 561/562/563 Fax: +255 28 2571 564 E-mail: mining@alliedgroup.co.tz www.alliedgroup.co.tz

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Allied Mining Services Limited services We only stock and supply reliable, ISO approved products and reputable brands. We stand behind every item we offer. We have what you are looking for. Our product team continuously seeks for the newest products and applications. We are rapidly expanding our product range and also making sure that the products and services continue to be relevant and of the highest standards for our customer’s requirements.

Steel & Hardware • Hardox Wear Plates • Hardox Strips •M ild Steel Plates • Mild steel Angle, Flat Bar, Round Bar, Bearm, Channel, Chequred Plates • Universal Beams & Columns • E xpanded Metal • Gratings

Power Tools AMSL, supplies all kinds of power tools from well know brands.

Bearings Our stocks includes wide range on SKF and FAG bearings, bearing blocks and seals.

HDPE / Poly Pipes We are the official agen for Plasco Limited.

To emphasize, all Plasco products are quality products and meets the ISO 9001-2000 standards.

Lifting Equipment AMSL are agents for Yale lifting equipment.

Toyota Genuine Parts • Filters • Engines & Drive Train • Windscreen wipers • Brakes/Suspensions & Steering Safety products AMSL is distributor of 3M products for Tanzania.

Welding equipment Our warehouse stocks over 510 items on welding consumables and electrodes.

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delivering engineering expertise

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ADP Group For the past 16 years ADP Group of Companies (ADP) has played a meaningful role in some of Africa’s most interesting mining projects

written by: Will Daynes research by: Vince Kielty

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F

or the last several decades Africa’s vast mineral wealth has been intrinsically linked with its economic growth. The continents’ mineral industry is unquestionably one of the largest in the world and for many African countries mineral exploration and production constitute significant parts of their economies.

Indeed mining and mines in Africa continue to play a fundamental role in its future socioeconomic and sustainable development,

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with over 1,800 mining projects currently in various stages of development.

Based in Cape Town, ADP Group of Companies (ADP) commenced operations in 1997 and today boasts an impressive list of successful mining industry projects predominantly in Africa, but also in Canada, Brazil, India and Australia. The group is a leading supplier of modular processing plants and projects in the diamond mining sector and over the years has supplied many diamond plants and mining technology. ADP Group

ADP Group

Navachab filter plant and thickener

are proud to be associated with companies like, De Beers, Debswana, Namdeb, Letšeng Diamonds, GEM Diamond, Mothae and Rio Tinto to name a few.

ADP Group consists of ADP Holdings, ADP Projects, ADP Marine & Modular, ADP Namibia with ADP UniProjects (JV) in Botswana and ADP Africa as its Johannesburg based office. ADP Projects specialises in providing Engineering, Procurement, Construction and Management (EPCM) services and EPC projects to the mineral industry. At the

heart of the subsidiary is a core group of qualified staff who are in turn supported by financial and administrative personnel, and technical associates. Among the technical skills available from ADP Projects one will find senior process engineers and project managers with relevant minerals experience, multi-disciplinary engineering, AutoCAD draughting and 3D design, construction management and commissioning.

Among many projects successfully executed

by ADP Projects are Navachab Gold Mine

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operated by Anglo Gold Ashanti in Namibia and Morupule Colliery Limited (MCL) coal mining operation, operated by Debswana Diamond Company. For the former, ADP was commissioned by Anglo Gold Ashanti for the design, procurement, fabrication and supply of a 200 ton Gold Concentrator Plant.

When it comes to coal mining operations, ADP was awarded the engineering component of expansions at Morupule Colliery Limited (MCL) in 2008.

The expansions included designs for underground and surface conveyor systems, a new crushing and screening facility with additional stock piles, new underground and surface HT and LT infrastructure as well as expansions to the existing infrastructure.

The existing mine capacity was expanded from 1 mtpa to 2.5 mtpa. The project was successfully completed in 2011.

ADP Marine & Modular, meanwhile, targets fit for purpose project execution

“ADP Africa is the groups’ subsidiary that specialises in providing support services to mining companies in Africa”

Morupule Colliery

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ADP Group

Morupule Colliery

requirements and smaller able to offer process and scale pre-engineered plant design development and and technology supply to implementation services national and international to any mining operation anywhere in the world. marine and land based ADP commenced ADP Marine & Modular diamond, mineral sands, operations has a long standing formal coal and gold mining partnership with Namdeb. industries. ADP Marine & One of many projects of Modular is a world leader in the development and implementation interest being the Sendelingsdrif Project. of customised and innovative solutions Namdeb commissioned ADP to design a viable for modular mineral processing plants, solution to start treating the required runshallow water mining, walking jack-up of-mine material at Sendelingsdrif, a proto platforms and dredging.

Orange River deposit situated on the north ADP Marine & Modular not only bank of the Orange River, approximately 85km offers their technology to diamond, gold north east of Oranjemund and 20km north and heavy mineral sands mining, but is east of Daberas Mine. The proto deposit is

1997

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Aerial ropeway system

Walking Jack-up platform

“ADP has been structured as a group of companies in order to offer a full range of projects, consulting services and process plants to its clients� approximately 2km long and 700m wide. ADP Marine& Modular is responsible for all EPCM aspects of this project. The mining plant is anticipated to be commissioned in phases from the end of October 2013 to December 2013.

The Walking Jack-Up Platform, refurbished in 2011, is a 12m x 12m Rig used for shallow water drilling and sampling as part of a resource development program. The platform, primarily offshore based, incorporates an

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overhead Aerial Ropeway System for the purpose of crew transfer and equipment supply to and from the rig over the inter-tidal and wave zones.

The Jack up-up platform and Aerial Ropeway were successfully commissioned by ADP Marine & Modular. Whilst it is located on the beach in Namdeb Mining Area 1, and as of January 2011, Namdeb are conducting sea trials up to 350m offshore.

ADP Group

Sendelingsdrif mine site

ADP Africa is the groups’ subsidiary that specialises in providing support services to mining companies in Africa. These services include spares supply, logistics, meet and assist, visa applications and other general services to their client base.

ADP Africa is a client-driven company with proven expertise and access to substantial resources. In a sense, ADP Africa performs a public relations function for management and staff of companies situated in isolated areas. ADP Africa also guarantees its clients comprehensive professional medical assistance by sourcing the most reputable physicians and institutions, arranging treatment and providing necessary medicines.

ADP has been specifically structured as

a group of companies so as to be able to optimally and cost effectively offer a full range of projects, consulting services and process plants to its clients, from conceptual studies and pre-engineered plants through to larger scale project execution using EPCM or lump sum contracting models. To this end it has played a small role in the development of Africa’s mining industry and strive to add further value to the industry by engineering continuously better and more efficient ways of mining and processing diamonds.

For more information about ADP Group visit: www.adpgroup.com

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company in brief Based in Cape Town, ADP Group of Companies consists of ADP Holdings, ADP Marine and Modular, ADP Projects with ADP Namibia, ADP Lesotho and ADP Africa servicing the African continent. ADP Projects specializes in providing Engineering, Procurement, Construction and Management (EPCM) services and EPC projects to the Mineral Industry with a small representative office in Johannesburg.

ADP Marine and Modular targets fit for purpose project execution requirements and smaller scale pre-engineered plant and technology supply to national and international marine and land based diamond, mineral sands, coal and gold mining industries.

ADP Marine and Modular also represents major European based Dredging and Marine Company Vosta LMG and is an equal partner with Denith Engineering in Under Water Mining Systems (UMS) a company focusing on the fast growing, niche marine mining market.

ADP Africa specializes in support services to mining companies in Africa that includes spares supply, logistics, meet and assist, visa applications and other general services to their client base.

ADP started its operations in 1997 and boasts an impressive list of successful mining industry projects predominantly in Africa but including

Canada, Brazil, India and Australia.

Today ADP is a leading supplier of modular processing plants and projects in the diamond mining industry, having supplied diamond plants and diamond mining technology to De Beers, Debswana, Trans Hex, Gem Diamonds, Rio Tinto, BHPB and Petra Diamonds, to name a few.

ADP is specifically structured as a group of companies in order to be able to optimally and cost effectively offer a full range of projects, consulting services and process plants to its clients, whether small or large, from conceptual studies and pre-engineered plants through to larger scale project execution using EPCM or Lump Sum contracting models. Our value proposition is assisting our clients to develop the optimal techno-economic solution for each project leveraging off our prior projects, technology and experienced innovative process engineering core.

mission To become the leading medium-sized supplier of world-class, innovative processing and mining systems to a niche client base in the mining industry, by supplying products and services which add value to their bottom line.

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ADP group KEY PERSONNEL

Offices

Adp Holdings

Adp Holdings (Pty) Ltd 1st floor, West Block, Business Connexion Building, Century City, Cape Town T +27 21 521 9400 F +27 21 521 9401

Andrew Jakins Managing Director Adp Marine And Modular

Toby Lambooy

Managing Director Adp Projects

Viv Reyneke Managing Director Adp Namibia

Toby Lambooy Director Adp Africa

Etienne Buhr General Manager Adp Lesotho

Andrew Jakins Managing Director

Adp Projects (Pty) Ltd 1st floor, West Block, Business Connexion Building, Century City, Cape Town T +27 21 521 9400 F +27 21 521 9401 Adp Marine And Modular (Pty) Ltd 2nd floor, East Block, Business Connexion Building, Century City, Cape Town T +27 21 521 9500 F +27 21 521 9501 Adp Africa (Pty) Ltd 27 Grader Road, Spartan Ext 16, Kempton Park 1619, Gauteng T +27 (11) 392 7450 / 1 / 7 +27 (11) 974 6066 / 6074 F +27 (011) 392 7458 / 9 Adp Namibia (Pty) Ltd Strategic Projects Building, C/O 14th Street and 7th Avenue, Oranjemund, Namibia Adp Uniprojects Jv (Pty) Ltd 2nd Floor, Eastern Building, Sandef House, Plot 111, Millennium, Gaborone International Finance Park, Gaborone, Botswana T +267 390 9102 F +267 318 0565

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The tools for the job 182 | BE Mining

Pesco Chile

Over little more than a decade Pesco has emerged as a major player in the Chilean economy, supporting a host of different industries including forestry, municipal and industrial waste management, emergency and rescue services, high-rise working and, increasingly, mining

written by: John O’Hanlon research by: David Brogan BE Mining | 183

Elliott HiReach aerial work platform

Pesco Chile

T

he niche Pesco has occupied so successfully is in the provision to its clients of specialised machinery, sourced from around the world, that they need in their operations.

As a measure of its success we need only look at the sales graph: since it was founded in 1998 turnover has progressively risen from zero to more than $55 million in 2012.

One of the most stable, competitive and fastest growing economies in the world, let alone Latin America, Chile recorded an enviable five percent growth in 2012, much of it achieved through its mineral resources, with the state mining company Codelco accounting for a third of the nation’s economy. So despite the diversity of its client base it is not surprising that mining is the major contributor to Pesco too. Mining related business now contributes a third of its turnover and about the same proportion of the company’s profits. Inevitably a good amount of equipment supplied by Pesco ends up working on the operations of Codelco, though it is not Pesco’s model to partner directly with the end user but rather through a third party, usually a leasing company.

This dramatic growth has been achieved using two basic principles, explains General Manager Nicolás Vicencio. “We develop the markets for the products we sell, to increase the volumes we handle; and we add new products to our range according to what the customers say they need.” The company goes to great lengths to source the right equipment for its clients, he adds, visiting OEMs that may be interested in establishing a presence in Chile, and attending trade shows in China,

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Sierra y Plaza Engineering and Services S.A., was established on January 10th, 1994, in the city of Los Andes, Chile.

TECH INDUSTRIAL CLEANING Company: Sierra y Plaza Ingeniería y Servicios S.A.

Currently we are known one of the leading companies in services and engineering projects within the country, maintaining constant innovation that solves the challenges and demands of our customers.

Our core business units are: • Engineering and Projects Services.

• Works Technical Inspection Services.

• Land Survey, Geodesy and Geomatics Services.

• Maintenance, Infrastructure, Civil Works, Construction and Installation Services.

• Management Support Services • Tech Industrial Cleaning Services

VISION AND INNOVATION For several years the company studied our costumers’ needs related to operational continuity, and it was, for them and for us, a big challenge.

There for the resulting was the identification of the key variables that were affecting productivity, maintenance and equipment performance in various production Plants. These variables allowed us to perform a search for solutions, with clear vision that allowed us to apply technology available on the World Market.

www.sierrayplaza.cl

TECHNOLOGY AND INDUSTRIAL TECH CLEANING SERVICES

High Vacuum Aspiration.

Our proposal presents a different model to solve the problems by applying our know-how in the Engineering´s area, introducing concepts such as: Critical points, planning and control process, reaching new standards for quality, safety and productivity.

This allowed us to achieve a new concept that goes from “Traditional Industrial Cleaning” to “Tech Industrial Cleaning”.

Pneumatic Suction.

The following pictures shows evidence about the standard of service achieved in a workplace, meeting the expectations of our customers.

2012: Customer Codelco Chile, División Andina, achieved standard.

OUR TECH INDUSTRIAL CLEANING SERVICES Currently our Tech Industrial Cleaning Services are executed Concentrating Plants, Crushing Plant, Grinding and Flotation Plant, Underground and Open Pit Mines, and generally in any area where exist any kind of silt accumulation, stones or rocks, that had been generated as spills or operational emergencies, using three processes: Loading and Transportation.

For each one of these processes, it´s in use hightech machinery, capable of performing their jobs in tight spaces, which combined with highly specialized human resources, deliver effective results with low risk exposure and an effective care for the environment, since these processes do not generate pollutants during its application.

Loading and Transportation.

Sierra & Plaza Engineering and Services

As an Engineering services company, our north is oriented to provide high quality services, meeting EO deadlines and costs C Sierra, JosĂŠ Luis which ensure the success of the projects in which we participate, with a high awareness of the persons and environmental care, and that makes us an efficient company.

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We have been recognized among national level, in terms of high security standard, there for; we must be very careful and efficient in every new step that we take.

On that matter, working with Pesco has meant a positive impact on our Tech Industrial Cleaning Services, which has allowed us to incorporate the latest technology making our work more efficient. www.sierrayplaza.cl

Pesco Chile Europe and America. But it’s not all about volume: “It’s our strategy to be experts in every product we sell: we do that by training our people either at the manufacturers’ premises or by bringing their technicians to Chile.” It is a very dynamic process, he says: often a product imported for one client will turn out to have applications in another sector or application. Fire trucks, for example, are used by municipal fire services, one mine sites, and also in forestry operations among other industries.

A lot of the equipment supplied is for cleaning of a specialised nature, so vacuum trucks figure large in the list, whether for cleaning the shovels and large plant in the mine, or in another version, adapted for conveyors. One particularly hazardous operation used to involve cleaning under moving conveyors: now Pesco is supplying a new remote control mini shovel from Movex that takes humans away from the conveyor – with safety the number one priority in

Altec insulated elevator trucks

today’s mines this product is attracting a lot of interest he says. Among other recently supplied equipment are fire trucks and safety equipment destined for Codelco’s Andina project, vacuum trucks for Siemens working at a Codelco/Rio Tinto joint venture, further vacuum trucks for services contractor Sierra y Plaza and telescopic cranes for the leasing company Relsa for the world’s biggest

“We add new products to our range according to what the customers say they need” BE Mining | 189

Pesco Chile copper mine, Codelco’s Chuquicamata. In order to A leading manufacturer of material handling aerial extend its range of specialised work platforms and cranes designed for rugged work cleaning equipment, Pesco environments. PESCO and Elliott Equipment have has introduced Altec partnered to sell and rent Elliott’s complete line of insulator-cleaning equipment telescopic aerial work platforms to mining customers that – essential for keeping clean require mobile aerial equipment to perform maintenance of shovels and other tall machinery. Elliott Equipment the supply power lines to the specializes in manufacturing models that offer aerial mining facilities. working heights up to 215’ (65,5m), basket jib capacities to Pesco does not involve 1,500 lbs (680 kg), boom winch capacities to 7 tons (6,35 itself with the conveyors mt), and a wide range of accessories like remote controls, themselves, nor with the diggers, and tool systems on the truck bed with hoses that heaviest capital equipment terminate in the basket. The company focuses on creating like shovels and ore carriers the best solutions for lifting loads and positioning people.

Elliott Equipment Company looks forward to working with which are bought direct from PESCO to serve the Chilean market with the most advanced the manufacturers. The next and multifunctional aerial devices in the industry. tier of equipment is supplied www.elliottequip.com indirectly, and here there is a major opportunity. On the waste management side, apart from vacuum trucks there is a demand for waste water control – high pressure washing equipment, skips and the hook lifts that move them about, and a wide range of containers. Pesco supplies all these. Much of this work can’t be done at ground level, and needs specialised products to facilitate working at height – up to 30 metres above ground. With brands like Axion, Elliott, Altec and Sky Jack clients have access to the safest and most cost effective lift

Elliott Equipment Company

$55 million Pesco’s 2012 turnover Pesco’s Santiago headquarters

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systems available internationally.

With stock valued at around $20 million on its books, this is a capital-intensive business that works, Nicolás explains, a little differently from most places. “We don’t lease it out directly. We leave that business to the banks, who have their own leasing companies that make arrangements with the contractors.

They buy the equipment from us.” Thereafter, maintenance is a matter of agreement. Pesco can provide full service in its own workshops – again that would be the norm in many countries and Chile is catching up with this practice. For those customers who choose to do their own maintenance Pesco is happy to supply parts and to train their engineers.

As a company, Nicolás Vicencio thinks Pesco is now right-sized. “We have grown a lot in the last three or four years and now we have the workshop areas and staff that will enable us to consolidate our operations in Chile and consider our next steps,” he says. During 2012, it should be noted, Pesco augmented its main six-acre Santiago facility, with its five office buildings and 50,000 square feet of warehouses and workshops, by opening two subsidiary sales and service depots. These are strategically placed at Los Ángeles to the south and Calama to the north, giving excellent access to clients operating

anywhere in the 2,700 miles north-to-south extent of Chile’s territory.

With that in place Pesco is now looking outside its borders. Peru is the first target, and Pesco is actively looking for the right partner to help it grow from a base there.

That will be its strategy, says Nicolás, since each country has its own culture and way of doing business and it will be essential

“Pesco is remaining focused on servicing the burgeoning mining industry in the region” 192 | BE Mining

Pesco Chile

Dingo mini excavator

to integrate local knowledge with Pesco’s unrivalled expertise and scale in the region.

For now the most attractive economies are the mining ‘tigers’ of the Pacific coast – Peru, Ecuador and Colombia. Pesco does have a dealership in Uruguay, he adds, however this is mainly concerned with forestry products.

“Brazil,” he declares, “is another continent!”

Nevertheless there are opportunities in that huge but rather protectionist economy.

Pesco’s strength lies in the agreements it has to import equipment from all over the world under favourable trade agreements that exist with Chile. To import the same equipment into Brazil would be very expensive, however under Mercosul of which Chile is an associate member it would be possible to export

Supersucker vacuum truck

specialised equipment to Brazil if it had enough Mercosul content. Pesco already supplies a forest trailer to Uruguay, assembled in Chile using only key components that are imported.

That model could be extended, he believes, with Chile becoming a platform for supplying such equipment, value added, to many South American countries, with no duty.

Meanwhile, Pesco is remaining focused on servicing the burgeoning mining industry in the region – that is where most of the demand is coming from, he emphasises.

For more information about Pesco Chile visit: www.pesco.cl

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company in brief Representing the leading manufacturers of equipment for mining, forestry, environmental, emergency and transport since 1998.

Facilities Located in Panamericana Norte 16.644, with an area of 6.2 acres, with the following facilities: • 5 office buildings totaling 20,000 sq ft • 3 workshops and 3 warehouses totaling 49,500 sq ft

Santiago • Office 1.500 m2 & Workshop 3.500 m2 • Coverage from IVth Region to VIth Region to Pelambres.

New offices Calama • Office 300 m2 sqft & Workshop 300 m2 • Coverage from Iquique to Copiapó.

Los Ángeles • Office 180 m2 & Workshop 1.200 m2 • Coverage from Linares to the far south of Chile.

commitment

Office

The success of PESCO S.A., is mainly due to its commitment to its customers who are always offered:

Pesco Chile 16644 Avenida Eduardo Frei Montalva - Lampa Santiago Chile

• Innovative Solutions • High Quality Equipment and Products • After Sales Service and Support Our commitment begins with advice on choosing the most appropriate equipment for each application, at the best price, delivered on time, with fast parts availability and after sales service.

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Tel: 56-2-2829 9600 Fax: 56-2-738 5637 www.pesco.cl

pesco chile services

Mission

PESCO has over 80 people in workshop :

To grow and make others grow. Provide products and services that allow the progress of our company, our people, our suppliers and our customers.

• Electrical Installations • Hydraulics Installations • Electric • Welders • Assembler • Mechanics • Paint Jobs • Service and Maintenance All these activities are a part of PESCO’s assembly line, as well as After Sales Service and Warranty.

All these services are now part of the new offices along Chile, part of our project to make after sales service more efficient and comfortable for our clients.

sales growth

Vision Being a leader in the markets in which we participate, guided by our values.

values • Honesty and Accountability in the daily act.

• In our relations we try to be friendly, fair and favor teamwork.

• When faced with challenges and problems, we are optimistic, innovate and persevering, making every difficulty an opportunity for growth.

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regional focus: peru

Antamina

Reaching new heights Operations Vice President, Jorge Ghersi discusses the continuing development of Antamina, site of the largest mining investment programme in the history of Peru

written by: Will Daynes research by: Louisa Adcock

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regional focus: peru

Excavation and haulage taking place

Antamina

R

unning along the western coast of South America, the Andes is the longest continental mountain range in the world. At around 7,000 kilometres in length, between 200 and 700 kilometres wide, and with an average height of approximately 4,000 metres, the Andes extends through seven countries, one of which is Peru.

It is within the central Peruvian Andes that one will find Antamina, one of the ten biggest mines in the world for its production volume and the site of the largest mining investment in Peru’s history, totalling $3,600 million.

Responsible for the production of copper and zinc concentrate, as well as molybdenum, silver, lead and bismuth concentrates, the mine’s capital today belongs to BHP Billiton, Glencore-Xstrata, Teck Resources and Mitsubishi Corporation.

The Antamina site, Antamina meaning ‘copper mine’ in the Quechuan language, has a rich history, having been documented as far back as the 19th century thanks to the work of researcher Antonio Raymondi.

It was officially incorporated into the project portfolio of the Cerro de Pasco Mining Corporation in 1952, before then being passed into the hands of the State.

Following a process of privatisation in 1996, Antamina was acquired by the Canadian mining companies Río Algom and Inmet, which at the time estimated that the mine held reserves of around 500 million tonnes. A year after the privatisation of the mine the exploration of the site was formally completed, with trial operations, the first shipment of concentrates and the

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regional focus: peru

The unique and innovative approach MWH applies to mining-related issues capitalizes on our advanced methodologies to solve environmental, infrastructure and water challenges. MWH provides solutions to deliver water where it’s most needed, when it’s most needed.

WATER.Proof

mwhglobal.com

PRECIOUS RESOURCE DISCOVERED Click here to visit our dedicated homepage for the mining community

www.bus-ex.com/mining

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start of commercial production all taking place in 2001.

“At the end of 2008,” explains Mine Manager, Jorge Ghersi, “we announced the increase of our mineral reserves, which was subject to a feasibility study, completed in 2009, which allowed us to evaluate the options of expansion. After receiving the authorisation of our shareholders and the permission of the Ministry of Energy and Mines, we announced an investment to expand our mining facility and the mineral processing capacity. This marked the official start of our Expansion Programme to increase processing capacity by 38 percent. The total investment in the programme represents more than $1,400 million.”

This programme has resulted in the

Antamina

Overview of the mine at night

extension of the life of the mine from 2023 to 2029, thus also extending the economic and social contribution it makes to the surrounding region. The operations of the Expansion Programme commenced in the last quarter of 2011 and subsequently led to the creation of 800 jobs.

The mine itself is an open pit operation and boasts various units. These include Camp Yanacancha, the location of Antamina’s

concentration plant. Equipped with state-ofthe-art technology that allows the processing of mineral from the pit, the concentration plant is considered one the most automated facilities of its kind anywhere on the planet.

Meanwhile, the pipeline that runs from the mine to the nearby Punta Lobitos Port measures 302 kilometres and allows for the transportation of mineral concentrates to Huarmey, and thus facilitates subsequent shipping and export.

“Antamina is one of the ten biggest mines in the world for its production volume and the site of the largest mining investment in Peru’s history” BE Mining | 201

regional focus: peru

Furthermore, the mine site’s tailings dam can be found located 4,075 metres above sea level in the Quebrada Huincush.

The tailing dam represents just one example of Antamina’s consciousness towards its impact on the environment, with the mine investing considerable capital over the years in various positive programmes and initiatives. “Since 2009,” Ghersi continues, “we have achieved 100 percent compliance with

regards to water and air quality standards. All of our operations are certified to ISO:14001 standards and the high level of performance achieved by our environmental management system has become one of the most respected within the sector here in Peru.”

Among the many key environmental initiatives that Antamina has been responsible for has been its environmental geochemistry research into understanding the hydrological

“Our employees have been, and always will be our most valuable asset”

Workers gather for a security briefing

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Antamina

Antamina is committed to safeguarding the environment

and geochemical behaviour of Huarmey, which has been established to reverse the of waste rock at the mine, its Study of Coverage Project threat to Humboldt penguin populations and other birds to assess the best alternative for application coverage protected by the state on the The extended estimated in the closing of dumps, coast of Huarmey. end of mine life as a Another example would be its initiative to protect and result of the expansion the Puya Raimondi Project, divert the waters coming programme from various springs located one that helped transform 170 acres of desert area within in the Eastern Dump and its sprinkler irrigation project the province of Ancash into designed to control the generation of dust at an innovative ecosystem that is now home to 50 species of birds, more than 200,000 trees the various entrances to the mine.

In addition to the aforementioned and with a climate conducive to generating initiatives Antamina is also responsible for numerous environmental benefits for the region. several important conservation projects Turning back to the mine operations in the region. These include the Humboldt themselves, Ghersi is quite adamant about what Penguin Conservation Project on the coast is the source of Antamina’s success over the

2029

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regional focus: peru

Antamina decades. “Our employees have been, and always will be our most valuable asset. Currently we have a total of 2,949 direct employees and 3,169 indirect ones. Close to 50 percent of our payroll is made up of Ancash employees and 100 percent of our unskilled labour comes from our areas of influence. We attach great importance to the training and education of all of our employees, providing every opportunity for people to develop personally and professionally as they develop their skills and competencies through “on the job” methods.”

Antamina also promotes the philosophy that all of its workers can, and should, be part of what it dubs, “Continuous Improvement”, which essentially means the generation of new ideas and methodologies that can help to improve existing processes or create whole new ones.

“The starting point when it comes to this continuous improvement is the mapping out and prioritising of the most important processes,” Ghersi concludes. “From there we undertake a periodic review of all the macro processes that make up our operations using a root cause analysis of indicators and a methodology called “business review”. Furthermore, we participate in mining management benchmarking with the Chilean mining industry and various Peruvian mining companies, something that we consider to be another example of how serious we are about being a leading player in this part of the world.”

For more information about Antamina visit: www.antamina.com

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company in brief Antamina is a polymetallic mining complex that produces copper, zinc and molybdenum concentrates, and silver and lead concentrates as by products.

The mine is located in the district of San Marcos, Ancash Region, 200 km. from the city of Huaraz at an average altitude of 4,300 meters above sea level. The company has its own port, called Punta Lobitos located in the coastal province of Huarmey.

Today it is among the largest Peruvian

producers of copper and zinc concentrates and one of the ten largest mines in the world in terms of operating volume.

Investment highlights

products

• I nvestment in Antamina (an initial investment of approximately U.S. $ 2.3 billion, plus U.S. $ 1.2 billion of investment in the expansion of its operations) is considered the highest in the history of Peruvian mining

• Copper • Zinc • Molybdenum concentrates • Silver and lead concentrates

•C ompania Minera Antamina SA is a company incorporated under Peruvian law, the product of a joint venture between four leading companies in the world mining industry.

Antamina’s shareholders are: - BHP Billiton (33.75%) - Xstrata (33.75%) - Teck (22.5%) - Mitsubishi Corporation (10%)

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values • Industrial Safety • Integrity • Responsibility • Respect and recognition • Continuous Learning • Excellent performance and innovation

antamina areas of operation The Mine The mine is located in the Antamina Ravine, in the district of San Marcos, at latitude 9 º 32’S and longitude 77 ° 03’W and has a current estimated useful life until 2029. This is an open pit operation that works with a skarn type deposit.

A daily average of 430,000 tons of material is extracted and with operating running 24 hours a day, 365 days a year, 12-hour shifts, making it one of the ten largest mining operations in terms of volume. The mine pit currently measured 3.400 meters long and 1.800 meters wide and has a depth of 700 meters. The total proven and probable reserves amount to 745 million metric tons.

Camp Yanacancha Located at this camp is the Concentrator Plant, which may be considered one of the most automated existing plants in the world, equipped with a technology that can directly process the ore that is extracted from the pit. The camp also has modern and comfortable lodging accommodations for all personnel.

Punta Lobitos Port The port is located in Huarmey, 290 kilometers north of Lima. This facility receives the ore concentrates that are transported from the mine through a modern steel ore pipeline, coated with HDPE, over a distance of 302 kilometers.

The concentrates, which come in the form of a slurry pulp –containing 65% solids, are received, filtered, stored and loaded onto ships for export.

The surplus water from this ore concentrate is treated and then used in the afforestation of a 170 hectare wooded forest. The port has ISO 14001 and ISO 9001 Certification.

Tailings Dam Located in the Huincush Ravine at 4,075 meters above sea level, this tailings dam is believed to be the highest in the world. Its huge size, owing to its storage capacity of up to 550 million tons of tailings, and structural leak-proof design, ensure strict environmental care.

Charter “We are Antamina, efficient operators of polymetallic ore deposit. Our team is strongly committed to producing and delivering high quality concentrates, safely and responsibly, from the Peruvian Andes to the rest of world.

We identify with our company’s values as our very own and we are highly motivated to always be better.

Our purpose is to responsibly create value and benefits for its shareholders, workers, its communities and Peru.

Our mission is to be a company that produces extraordinary results, is predictable for its quality, adaptability, profitability, safety, environment and community relations through the participation and leadership of our people”

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Powering the growth of Peru Sociedad Minera El Brocal’s activities and achievements are prime examples of what makes Peru such an exciting and important epicentre for mining in South America

written by: Will Daynes research by: Abi Abagun

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Sociedad Minera El Brocal

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Sociedad Minera El Brocal

P

eru’s rich mining history is well documented, with the roots of what has become a hugely attractive region for the industry dating back centuries. Such a legacy can be seen in the development of the Colquijirca mine, the origins of which predate the era of the Incas, when it has been documented that ancient tribes silver mined the surrounding foothills of Puntac-Marca.

Located in the Cerro de Pasco region of the country, the Colquijirca mine, and the adjoining Huaraucaca concentration plant, is today managed by Sociedad Minera El Brocal, a Peru-based company primarily active in the extraction, concentration and commercialisation of polymetallic ores, including zinc, silver, lead and copper.

In addition to the aforementioned activities the company conducts a number of other important operations including the open pit activities at the Tajo Norte mine and the running of the Marcapunta Norte underground mine. Furthermore, Sociedad Minera El Brocal is also engaged in exploration projects currently underway at the Marcapunta Oeste and San Gregorio mines.

At the Tajo Norte mine the company is presently involved in the exploiting of polymetallic mineral content and sulphides consisting mainly of silver, lead, zinc and copper. The Marcapunta Norte mine on the other hand is an underground operation that exploits copper ores consisting mainly of enargite and minor amounts of chalcocite, chalcopyrite, tennantite, luzonita, colusita and bismuthinite, and the bargain includes mainly pyrite, quartz, alunite, kaolinite and

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SANDVIK Nowhere is the breadth and depth of Sandvik’s expertise more apparent than in bulk materials handling. Since our origins, we have developed into a global industry leader. Wherever bulk material is handled, Sandvik is present.

In-Pit Crushing and Conveying IPCC is the use of fully mobile, semi-mobile or fixed in-pit crushers coupled with conveyors and spreaders or stackers to remove material from an open-pit mine. It can achieve full or partial replacement of trucks for material transport within and out of a mine. Although IPCC was conceived in the 1970’s, it is now that its evolution and flexibility are producing measurable and sizeable returns.

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Fully-mobile plants A newly developed fully-mobile crushing plant makes IPCC method a better alternative to traditional truck haulage due to lower operating costs, higher energy efficiency and reduced CO2 footprint. Sandvik improvements to IPCC help ensure higher production and profitability, while reducing dust, noise and pollution. With a unique and compact design, the new PF300 series is a big breakthrough as an essential part in IPCC and offers significant benefits for our customers’ mining applications. With capacities from 2000 to more than 12 000 mtph, the PF300 is designed for on-face mining applications which can be equipped with different Sandvik crusher types, for

Sociedad Minera El Brocal

any client’s uniquely varied demands. The stability concept allows loading of the crusher via hydraulic- or rope shovels without any temporary support, keeping the system fully mobile and rock solid under all conditions while machine oscillation is significantly reduced.

This keeps availability at a high level, improving the positioning of the machine.

Fixed and Semi-mobile plants In this method, trucks are used to transport material from the mine face to the in-pit crushing plant, just like the plant developed by Sandvik for Sociedad Minera El Brocal.

As mining advances, the hauling distance to the

crusher plant increases, eventually requiring the crusher and shiftable conveyors to be relocated.

Sandvik semi-mobile crushing plants consist of movable modules and can be shifted to follow the development of the mine site. Crushers represent the core of semi-mobile crushing plants, with various types of crushers that can be utilized: sizer, hybrid, double-roll-, gyratoryor jaw crusher. The throughput capacity can be more than 10 000 mtph, the maximum feed size up to 1500 mm and the crushing ratio up to 1:5.

Feed materials include coal, ore, limestone, oil sands, gypsum, chalk and similar materials. www.mining.sandvik.com

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Sociedad Minera El Brocal

“In our role as neighbours we have worked hard to establish good relationships with the local communities that live close to our operations” clays. Mineralisation is housed in carbonate rocks and clay horizons, and the daily production level at this particular asset is approximately 4,000 tonnes per day.

While important work across all of the aforementioned properties continues unabated, arguably the biggest current undertaking for the company involves the Huaraucaca concentration plant, an industrial facility where the company uses selective floatation processes to achieve the concentration of

economic mineralisation from the Marcapunta and Tajo Norte mines, and which currently boasts a treatment capacity level of 10,000 metric tonnes per day.

“It is here,” explains Project Director, Jesus Humberto Montes Chavez, “that we are now developing a hugely ambitious project that will treble the capacity of the plant to a design treatment capacity of 18,000 metric tonnes per day. This represents a massive undertaking on our part and is one where we are focusing

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A single source for ensuring results Based in Zurich, Switzerland, ABB is a global leader in power and automation technologies, employing 145,000 people and operating in approximately 100 countries. The company in its current form was created in 1988, but its history dates back more than 120 years. ABB’s success has been driven particularly by a strong focus on research and development, with the company maintaining seven corporate research centers around the world, while continuing to invest in R&D throughout all market conditions.

The result has been a long track record of

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innovation, with many of the technologies that underlie modern society, from high-voltage DC power transmission to a revolutionary approach to ship propulsion, being developed or commercialized by ABB. For its customers in the mining sector ABB offers comprehensive packages of competencies, products and services for the complete primary production chain in the mining and minerals processing. ABB’s experience is unmatched, with a track record of supplying complete electrification for more than 60 plants worldwide.

Sociedad Minera El Brocal

Power and productivity for a better worldTM

Having been present in Peru for more than 60 years, ABB has long been intimately linked with the development of the country’s mining sector, where the largest local and global companies have installed its power and automation technologies in every neural part of their processes.

ABB covers the entire range of mining services, going from mine electrification at low, medium and high voltage in open pit or underground applications, all the way to the processing plant, where it has supplied Drive Systems for the highest power mills, both installed and to be installed, and Automation Systems that help control and optimize process variables, generating information in real time for business decision making, based upon transparent connectivity with company-wide IT systems.

One of the many clients that ABB is currently engaged with is Sociedad Minera El Brocal.

Two specific agreements underscore ABB’s role in Sociedad Minera El Brocal’s Huaraucaca concentration plant upgrade project, the first being its commitment to achieving an alignment between the scope of the project itself and the operational needs and capacities, while the second calls for ABB to effectively improve delivery times during the development process.

Electrification and automation projects make up many of the most recently completed and ongoing tasks being carried out by ABB on behalf

of Sociedad Minera El Brocal. These include the delivery and/or installation of low-voltage power systems, medium-voltage switchgears, medium-voltage switchgear and control building equipment, and voltage and current transformers for high-voltage switchyards. From an automation perspective most of ABB’s recent work has involved the automation of the Huachuaccaja tailings plant and the automation, repowering and starting of the projects’ Osborn Mill.

As is the case with Sociedad Minera El Brocal, ABB’s renewed organization, portfolio and corporate strategy will always be available to its clients, with whom the company will partner in their efforts to continue contributing to both the industry’s and Peru’s long-term development.

E. mining@pe.abb.com carlos.mayhua@pe.abb.com www.abb.com.pe/mining

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the majority of our efforts at present. This project equates to a $420 million investment and is one we hope to bring to a conclusion by the end of 2013.”

While it is by no means immune to the global economic pressures that continue to beset mining companies throughout the world, Sociedad Minera El Brocal does possess the advantage of being the holder and operator of a host of impressive properties, each of which possesses excellent medium-to-long term prospects. In addition to its existing assets the company is also continuing to explore for other opportunities

Sociedad Minera El Brocal in the areas surrounding its operations. The results of this exploration have so far proven very promising, with the company optimistic that several new developments could be set to take place in very near future.

Being a Peru-based company with Peruvian values, it has always been the case that the concept of social responsibility runs through the heart of everything that Sociedad Minera El Brocal does as a business. Indeed it is the policy of the company that its own pursuit of development always aligns itself with the growth and development of the communities who live and

OHL INDUSTRIAL SOCIEDAD MINERA EL BROCAL SAA mining company has contracted the services of OHL Industrial for the design, supply, construction, commissioning and start-up of the bulk material (coarse mineral) transport system of an “Overland Belt Conveyor” and “Belt Conveyors for secondary and tertiary coarse material” as part of the “Expansion of Operations to 18000 TPD” project – Second Stage, which will be carried out in its facilities located in Cerro de Pasco, Peru.

The OHL Industrial Mining & Cement line has been responsible for executing the contract, under the EPC system with high levels of compliance and professionalism demanded by the OHL Group in all of its projects. With our experience in the design of the solids handling material equipment, a speciality

of our subsidiary Sthim, Sociedad Minera El Brocal has achieved its aim of designing a facility which was needed to transport 18 000 TMD, to the client’s complete satisfaction. Based on the Projects Management, this has been developed in close collaboration with the client in order to optimise the time, cost and adaptation of the facility to the needs of Sociedad Mineral El Brocal, with the ultimate aim and objective of complete customer satisfaction.

In accordance with our company policy, all the processes have been properly monitored and analysed in order to continue advancing in our objective of continuous improvement.

E. info@ohlindustrial.com www.ohlindustrial.com

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PRECIOUS RESOURCE DISCOVERED Click here to visit our dedicated homepage for the mining community

www.bus-ex.com/mining

regional focus: peru

Sociedad Minera El Brocal

work in the areas surrounding its operations. In working to We are part of one of the most important economic groups achieve this it runs a number of Peru. Our Core is to provide the correct diagnosis of social development and treatment of Risks on different industries, through programmes that benefit prevention strategies. neighbouring towns and Our strategy is based on the proper managing of risks, by villages. These programmes eliminating, reducing and retaining them.

Nevertheless we are experts in the proper transfer of risk to fall into vital fields such as insurance companies. health, education, training, Our staff has significant experience not only as brokers, but sanitation and workforce also as insurers, which gives us a comprehensive view of development, each of which the risk and insurance management. contribute towards providing We have an important international support, from global a better quality of life local companies such as Arthur J. Gallager Co. inhabitants. www.contacto.com.pe This philosophy also extends to the company’s day-to-day operations where it has put into place specific requirements throughout its engineering design that highlight just how respectful it is of the environment and how conscious it is of its own footprint. One such requirement involves the regulating of all the water used across its operations to ensure sustainable usage is maintained at all times.

Specific installations also exist amongst Sociedad Minera El Brocal’s infrastructure, such as sewage treatment plants that make sure that all waste is treated accordingly before leaving its facilities.

CONTACTO CORREDORES DE SEGUROS

$420 million Investment made towards the Huaraucaca concentration plant upgrade

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Sociedad Minera El Brocal “In our role as neighbours we have worked hard to establish good relationships with the local communities that live close to our operations,” Montes states. “One particular community for instance has worked so closely with us over the years that they are today the owners and operators of vital heavy machinery and equipment which we utilise across several of our key projects. We believe that this example also highlights how we are trying to create a legacy that will exist after the mine operations end. By providing the opportunity for communities to develop certain skills and expertise we are helping them to prepare, and be equipped, for whatever new challenges await in the future.”

Speaking of the future, Montes is very much aware of what Sociedad Minera El Brocal needs to do in the short term to remain prosperous and why things look bright for the company as a whole. “We are focusing a great deal at the moment on reducing our costs. While this is never an easy thing to achieve, without doing so I believe we would find ourselves ill-prepared for other challenges that may lie ahead. It is therefore vital that we find ways of decreasing our unit consumption levels. Nevertheless, from an operational perspective we remain in a very good place, operating as we are with reserves that have set us up for the long-term and within an area rich in mineral prospects and potential.”

For more information about Sociedad Minera El Brocal visit: www.elbrocal.pe

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company in brief On May 7, 1956, in the city of Lima, was established with the operation indefinite period Sociedad Minera El Brocal SA (The Curbstone).

In the Annual Mandatory Meeting, the February 20, 2003, it was unanimously agreed to adapt the undertaking to the Open Corporation.

The Curbstone is a mining company engaged in the extraction, concentration and sale of polymetallic ores: silver, lead , zinc and copper.

The company does business in Mining Units Colquijirca and Huaraucaca concentrator plant, located in the district of Tinyahuarco, Pasco province, Pasco department and region, Peru. Its administrative offices are located in the district of San Isidro, in Lima, Peru. The mine operates two adjoining Curbstone: Tajo Norte open pit operation producing silver ore, lead and zinc, and Marcapunta-North mine producing underground copper ores. The mined ore is processed into two concentrator plants, which currently have a

treatment capacity of 11,235 metric tons per day.

The Curbstone also has required associated infrastructure such as hydroelectric plants, sub-stations, workshops, warehouses, tailings dam, water treatment plant acidic, housing and administrative offices. ‘s competitiveness in the mining industry is characterized by the ability to operators to produce metal concentrates or at low cost, because the companies have no ability to influence sales prices. In that sense, The Curbstone has significant competitive advantages, such as: to hold important mineral deposits, access to infrastructure (energy, transport, etc..) And have skilled labor, among others.

mission

Office

Produce mineral concentrates and metals, ensuring the creation of shareholder value.

Exploration activities, ensuring continuity of ore mining process, creating development opportunities for our employees and the surrounding communities. Maintain a commitment to operate and develop our projects with innovation, efficiency, safety, social and environmental responsibility and good corporate governance.

Sociedad Minera El Brocal SAA Av Javier Prado Oeste 2173 - San Isidro

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Tel: (511) 611-3900 Fax: (511) 264-5373 E-mail: valores@elbrocal.com.pe www. elbrocal.pe

Sociedad Minera El Brocal investors

mine operations

The Curbstone is a company registered in the Public Registry of Securities of Peru. As a subsidiary of Compania de Minas Buenaventura SAA ( www.buenaventura.com.pe ), which is a company listed on the New York Stock Exchange (NYSE) and therefore subject to the provisions of the Securities & Exchange Commission (SEC), The Curbstone meets high international standards of corporate governance, such as the rules for the internal control system and risk required by the U.S. Sarbanes Oxley.

The company has two securities registered in the Public Registry of the Lima Stock Exchange: Common Stock (BrocalC1) Shares Investment (BrocalI1). The Curbstone shares remain a risk classification in category 1 issued by Support and Associates and a risk rating in the category First Class Level 1 issued by Pacific Credit Rating (PCR).

The action of the Curbstone was among the 25 most representative stocks of Peruvian companies, grouped by the first Exchange Traded Fund (ETF) Peruvian investment vehicle that was listed on the Stock Exchange in New York on 22 June 2009. Its official name is iShares MSCI All Peru Capped Index Fund and is based on the largest stocks traded on the Lima Stock Exchange (BVL). At December 31, 2009 common stock reached a weight of 3.97%.

It makes available to the shareholders of The Curbstone, and the general public company annual reports, financial statements, risk ratings and the Significant Events Conasev communicated.

North Pit The Tajo Norte mine is open pit operation exploiting polymetallic mineral content, sulfides consisting mainly of silver, lead, zinc and copper, consisting mainly of galena, sphalerite and argentiferous galena smaller proportion by, and enargite, and the gangue consists of pyrite, barite, hematite and siderite.

Mineralization occurs in layers parallel to the stratification, alternating horizons of limestone, marl and tuffs forming a syncline (Flank Main) and anticlinal (Flank Mercedes Chocayoc). To date, it remains a production rate of 5,000 tonnes per day with a radius of 5.0 clearing.

North Marcapunta Marcapunta Norte mine is an underground operation that exploits copper ores consisting mainly of enargite and minor amounts of chalcocite, chalcopyrite, tennantite, luzonita, colusita and bismuthinite, and the bargain includes mainly pyrite, quartz, alunite, kaolinite and clays. Mineralization is housed in carbonate rocks and clay horizons alternating with reservoir geometry is presented parallel to the stratification. The daily production level is 4,000 tons.

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Prospering in Peru

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SRK Consulting - SVS Ingenieros Since merging with SRK Consulting in 2011, SVS Ingenieros has consolidated its Peruvian market share and diversified its range of technical services

written by: Will Daynes research by: Jeff Abbott

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Underground mine decline rehabilitation

SRK Consulting - SVS Ingenieros

O

ver the last ten years, the value of Peru’s mineral production has increased dramatically.

During the five-year period from 2005 to 2010, mining exports increased from $9.8 billion to $21.7 billion, raising the country’s mining profile internationally and presenting significant consulting opportunities.

The Peruvian company SVS Ingenieros has served the mining, engineering, and civil construction sectors since 1985. SVS employs a team of professionals with extensive experience in surface and underground mining, geology, geotechnical and civil engineering, environmental control, and mining health and safety. In the late 1990s, following the approval of mining-related environmental legislation, SVS dramatically expanded its environmental services to include the design of mine tailings and waste facilities and the supervision of mine services and field construction.

SVS’s vision is to become the consultant of choice in its local market by providing exceptional service to its customers and meeting the highest international standards of quality, safety, and social responsibility.

This vision moved closer to reality in 2011 when SVS merged with SRK Consulting.

Formed in 1974, SRK is an independent, international consulting practice that provides focused advice and solutions to clients, mainly from earth and water resource industries. For mining projects, SRK offers services from exploration through feasibility, mine planning and production to mine closure. Today, SRK employs more than 1,600 professionals

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Mine tailings facility reclamation

“For mining projects, SRK offers services from exploration through feasibility, mine planning and production to mine closure” internationally in over 50 offices on six continents. Among SRK’s 1,500 clients are many of the world’s major and medium-sized metal and industrial mineral mining houses, exploration companies, banks, petroleum exploration companies, construction firms, and government departments.

In 2010, SRK was looking for opportunities to expand. Peru was an attractive option, given a forecast increase in mining activity

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of $4 billion per year for the next five years.

SRK had already worked on many projects in Peru and had enjoyed a strong working relationship with SVS for almost 20 years.

“In order to better serve our Peruvian clients, we decided in 2011 to merge with SVS,” said SRK Group CEO Andy Barrett.

“SVS already held a very strong position in the local market and from this well-established base we have gained a foothold in Peru. We

SRK Consulting - SVS Ingenieros

Biological field work

have brought new services to the marketplace by combining our mining and geology experience with SVS’s strong skills in rock mechanics, tailings, and the environment.

We have also augmented our international teams, particularly in Latin America.”

SVS General Manager Carlos Soldi was equally enthusiastic about the merger and the resultant synergies. “Prior to the merger, SVS could not offer professional services in areas such as due diligence and hydrogeology,” he said. “Since the merger, we have drawn upon the talent and technical abilities that SRK has cultivated across its global operations. We have expanded our service line to include due diligence and geotechnical services, resource and reserve calculations and certification, mine planning, and process design. We have

Underwater geotechnical drilling

also strengthened SRK’s and SVS’s strategic relationships with international firms, further broadening the fields in which we provide high quality services to our Peruvian clients.”

Soldi concluded, “Following the merger with SRK, SVS has been able to offer a wider range of services to its traditional clients and to enter fruitful, new relationships with other mining companies. While we continue to work predominantly in Peru, we have also been able to take on more projects in countries such as Mexico, Colombia and Argentina.”

For more information about SRK Consulting - SVS Ingenieros visit: www.srk.com

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company in brief SRK Consulting is an independent, international consulting practice that provides focused advice and solutions to clients, mainly in the earth and water resource industries. For mining projects, SRK offers services from exploration through feasibility, mine planning, and production to mine closure.

Formed in 1974, SRK now employs more than 1,600 professionals internationally in over 50 offices on 6 continents.

The Group’s independence is ensured by the fact that it is strictly a consultancy organisation, holding no equity in any project, and with ownership primarily by staff. This permits our consultants to provide clients with conflict-free and objective support on crucial issues. This is particularly important for due diligence and feasibility studies, which form a large part of SRK’s business.

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SRK Consulting employs leading specialists in each field of science and engineering.

Its seamless integration of services, and global base, has made the company a leading international practice in due diligence, feasibility studies and confidential internal reviews.

Among SRK’s 1,500 clients are most of the world’s major and medium-sized metal and industrial mineral mining houses, exploration companies, banks, petroleum exploration companies, construction firms and government departments.

SRK Consulting - SVS Ingenieros SVS Ingenieros

Offices

We are a Peruvian company founded in 1985, dedicated to consulting Mining Engineering and Civil Constructionspecializes in the areas of Geology, Geotechnology and Environment. We offer professional services in work related to the areas of Geotechnical, Environmental Control and Reclamation, Studies and Design of Civil and Electromechanical Works for the sectors of Energy, Mining, Transport, Agriculture and Industry and Tourism.

SRK Worldwide Oceanic Plaza, 22nd Floor, 1066 West Hastings Street, Vancouver, BC, Canada V6E 3X2

Services SRK provides a truly comprehensive range of consulting services to the resource industry.

Our services include geological modelling, resource estimation, mine design and scheduling, geotechnics, water management, tailings disposal, metallurgy, environmental management, geochemistry and technicaleconomic modelling.

We can assist in grass roots exploration prospects, advanced stage exploration projects, feasibility study stage projects and operation of mines. We can also help with closure and rehabilitation. Finally we can either assist directly with technical work as part of, for example, feasibility studies, or review work done by others as part of, for example, due diligence exercises and audits.

Tel: +1 604 681 4196.

Fax: +1 604 687 5532.

Email: info@srk.com www.srk.com

SRK Cardiff 5th Floor Churchill House 17 Churchill Way Cardiff, UK CF10 2HH Tel: +44 29 2034 8150 Fax: +44 29 2034 8199 Email: enquiries@srk.co.uk www.srk.co.uk

SVS Ingenieros Grimaldo del Solar 875 Lima 18, Peru Tel: +511 241 4077 Fax: +511 446 5892 Email: svs1@svs.com.pe www.svsingenieros.com

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shaping the future Maximising efficiency, increasing capacity and enhancing safety for the world’s premier resources companies

C

ardno BEC is an Australian engineering consultancy providing professional electrical engineering services to the mining, utilities, materials handling, oil and gas, industrial and petrochemical sectors across Australia and around the world.

Through successful completion of projects throughout Australia, Africa, North and South America, Asia, Europe and the Pacific, Cardno BEC has proven itself a reliable and respected partner for many of the world’s premier Resource companies.

“ Cardno BEC’s differentiator is ‘applied expertise’” 236 | Mining directory

With proven capabilities across all aspects of power generation, power systems, automation, control systems, ICT, plant integrity and project management, Cardno BEC’s differentiator is ‘applied expertise’.

Specialised teams provide clients with solutions that are underpinned by robust industry knowledge, indepth experience, innovation and technical excellence.

All projects are dependent on power system reliability and safety.

Cardno BEC has a Power Systems group dedicated to providing total engineering services for any network, be it for the resources, industrial or public utilities sectors. Cardno BEC will carry out all grid connection services for new plants as well as network planning for utility infrastructure upgrades.

Cardno BEC

When it comes to automation, Cardno BEC has the expertise to complete all aspects of automation whether for a new or existing plant, while its strong reputation as a process controls systems specialist results from its impressive track record.

Whether a client needs to increase its power capacity, maximise efficiency or design a complete project in the most remote location, Cardno BEC is able to deliver a design and management package or a turnkey solution.

In recent years Cardno BEC has undertaken a number of significant projects across Africa in countries including South Africa, Zambia, Cote D’Ivoire, Senegal, Burkina Faso,

Mauritania and Ghana. Collectively these projects demonstrate the depth of experience the company has with both greenfields and brownfields projects, where integration with the clients operations is seamless.

Cardno BEC has positioned itself as an engineering partner that exceeds client expectations.

Cardno BEC Pty Ltd Suite 1, Southgate Commercial Centre 87 Canning Hwy, South Perth, WA 6152 T : +61 8 9472 4224 www.bec-engineering.com.au

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reliability in transport

Kengas Group Limited started with bulk petroleum products and now provides supply and delivery services within the Great Lakes Region including Southern Sudan

T

he Company has over 25 years’ experience and operates in some of the most demanding locations.

Bringing together the best minds and the best technologies, Kengas understands that having high standards is the driving factor of change in life. By bringing greater synergy to daily business, maximizing the efficiency of businesses and providing specialized services across countries, Kengas integrates continuous improvements to bring changes for the better. We aim to be the Regions leader in providing specialized services in remote environments based on sound success in the Oil Industry.

MISSION Efficiently and reliably provide services that: • Fuel the national economy • Improve the quality of life • C reate maximum value for

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Shareholders and stakeholders • Empower its employees CORPORATE VALUES Distinguishing characteristics of the business is the combination of Management experience, Service experience and Quality of service.

Kengas group treasures the following values in the people it employs: • Integrity • Teamwork • Communication • Achievement • Compassion and Understanding CORE VALUES Safety, Health & Environment - To operate its businesses safely and as good guardians of the environment. Comply with Environmental Regulations. HSE Stewardship will be every employee’s responsibility.

Integrity - Be honest and open with employees, customers and stakeholders.

Kengas Group

Respect - Trust, respect and value the opinions of all employees, customers and stakeholders as the critical component to teamwork and collaborative efforts.

Fairness - Reward employees on the basis of their performance and contribution to the organization.

• Recognize diversity as a key strength, the unique value of each employee.

• Foster an inclusive environment that will enable everybody to fully participate and contribute.

Competitiveness - Be competitive through efficient and reliable operations and superior customer service.

• Adopt best practices, seek innovation and share knowledge.

• Learn from its mistakes, from each other and from the best in the industry.

• Apply technology as a competitive advantage and steward its controllable costs.

Our Capabilities • Fuel Logistics and Supply • Cargo Logistics • Catering Services • Procurement • Camp designing, Construction and Management • Fleet management • ICT Services • Warehousing • Laundry Services • Consulting • Contract Logistics • Other specialized services

Kengas Group P.O. Box 3133 Nairobi, 00506, Kenya T +254 20 2225445 www.kengasgroup.com

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engineering service

Douglas Simpson Projects (Pty) Ltd Trading as Planet Projects is an engineering company that was established in 1969 and situated in Labore, Brakpan

P

lanet Projects offers services such as the detailing, planning and fabrication of all types of structural steelwork, platework and piping with specialised welding capabilities. We offer a drawing office service which includes the detailing and developing of fabrication items for various industries.

Our company has a production area of 6186 square metres with a production capacity of 850 tons per month.

Planet Projects is an ISO 9001:2008 and OHSAS 18001:2007 certified

“ We are merSETA workplace approved and also accredited as a training institute�

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company and all work undertaken is subject to our Quality Assurance and Safety Processes.

Planet Projects is actively involved in the skills development initiatives to close the skills shortage. We are merSETA workplace approved and also accredited as a training institute.

Planet Projects is participating in the AATP project of which it is a merSETA flagship project in artisan development and other merSETA skills development projects.

Planet Projects is accredited to offer both welder and boilermaker institutional training and we currently have apprentices for both trades.

Our apprentices receive the theoretical training, practical training in a controlled environment and on the job practical training.

Our construction team has the ability to perform site erections and

Planet Projects

construction duties. Our team ensures that all the necessary quality, health, safety, legal and statutory requirements are followed.

We have an internal transportation division ensuring our clients receive on time deliveries at the most competitive prices.

Planet Projects has been involved in a number of large projects such as Great Basin Gold’s Burnstone Mine, Goldfields’ South Deep Mine, Xstrata Coal’s Atcom Mine and Anglo’s Waterval Smelter.

Our company is committed to product delivery and continual improvement to secure client satisfaction.

Our client base includes: • Goldfields • Bateman • TWP Projects • Impala Platinum • Anglo Platinum • Group 5 Projects • Howden Energy Systems • Xstrata Coal • Arcelor Mittel • Bhubezi Projects • DRA • Alstom

Planet Projects Norman Hadiaris (Projects Director) 101 Lumen Street, Labore, Brakpan T 011 738 1700 F 011 738 2721 E norman@planetprojects.co.za www.planetprojects.co.za

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Mining suppliers Princeco Ltd. is a Tanzanian registered company based in Mwanza, Tanzania

P

rinceco Ltd. is a Tanzanian registered company based in Mwanza, Tanzania.

It started its operations in September 2005 as a Procurement and Trading company to cater the growing needs of the approaching gold investors in the country. Princeco selects sources and delivers products and services for the mining, fishing, and the overall corporate sector.

Today it has a product range of over 350 items and more than 30 corporate customers.

“ Today Princeco has a product range of over 350 items and more than 30 corporate customers” 242 | Mining directory

We are dealers & stockist for Welding Equipments, Abrasives, Personal Protective Equipments, Workwear & Rainwear, Geological & Survey Items, Visibility Products, Fire Equipments, Filters and General Procurement. We have dealership for Lincoln Welding, 3M, ‘Steelblue/Howler/Krusher’ Australian Boots, ‘Dy-Mark’ Mine Marking, ‘Wild Africa’ Workwear, ‘Precious Earth’ Geology & Survey items, ‘Fleetguard’ filters, ‘Norton’ Abrasives. KARIBU SANA! TUJENGE NCHI TANZANIA HAKUNA MATATA! Princeco is always adding new products to its product list to make sure the mining industries and oil & gas industries are served in this country to the best of Tanzania’s ability so that we preserve its opportunities within the country. We are proud to say we have grown and developed our supplies and services to Mining Industries with the

Princeco Ltd

knowledge and support from the foreign investors to an international level. We work with world renowned mines like Barrick Gold Mine, AngloGold Ashanti Mine, Xstrata Nickel and etc. If you are a foreign company looking to invest in Tanzania in the Mining Sector and looking for a local partner do contact us – KARIBU. With the new upcoming of oil/gas industry in the country, Princeco strives to serve this sector as well within the coming years building the requisitions from clients. With Tanzania having abundance resources, we see Tanzania opening up lots of opportunity globally

and locally and would invite many entrepreneurial spirits. Minerals/ oil/gas projects development has the potential to create tremendous value for companies, government & local communities.

Princeco Ltd P.O.Box 1905 Bantu Street Mwanza,Tanzania, East Africa T +255 28 2540790/1 C: +255 784 223007 E: princeco@thenet.co.tz www.princeco.co.tz

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WHERE THE WORLD’S MINERAL INDUSTRY MEETS

ONLY GOING TO ONE MINING INVESTMENT SHOW THIS YEAR? MAKE IT PDAC. March 2 – 5, 2014 International Convention, Trade Show & Investors Exchange Metro Toronto Convention Centre Toronto, Canada convention.pdac.ca/pdac/conv/

Prospectors & Developers Association of Canada