BE.Monthly

ACHIEVING BUSINESS EXCELLENCE ONLINE INCLUDING

Eskom: ETI aluminyum: damus:

MONTHLY EDITION January 2014

BBT-SE:

Fast track

below the Alps An infrastructure project with both an historical and engineering dimension

+ industry focus: global gold mining

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IS YOUR NEXT

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$2.9B

in non-metallic minerals, including diamonds, was produced in Ontario in 2012

$2.6B in gold

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$787M

in other metals such as platinum and silver

Paid for by the Government of Ontario.

business excellence

Business John O’Hanlon Editor johanlon@bus-ex.com Will Daynes Editor wdaynes@bus-ex.com Matt Johnson Art Director mjohnson@bus-ex.com Louise Culling Production Designer lculling@bus-ex.com Richard Turner Director of Sales rturner@bus-ex.com Vince Kielty Director of Editorial Research vkielty@bus-ex.com

Business Excellence brings you content from leading business influencers and strategic thinkers providing inspiration and guidance to help you and your business grow.

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Contributors Juan-Jose Juan Vodafone Stephen Archer Spring Partnerships Robin Hafitz Open Mind Strategy Allison O’Keefe Wright Open Mind Strategy Scott Russell Halogen Software Michelle Drolet Towerwall Marielena Sabatier Inspiring Potential Thomas R. Cutler TR Cutler, Inc

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features

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12 top ten

automobile companies by market value

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2013 has seen the automotive industry continue its recovery from the dark days following the global economic crisis. Here we identify the ten companies leading the way in terms of market value.

20 operations

Putting Talent Management on the CEO’s Agenda An integrated talent management strategy can improve performance to a significant degree.

24 operations

Why reflection is key to innovation in the enterprise

Why businesses that are able to understand their past, are best placed for the future.

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28 Strategy

Mergers and Acquisitions The RISKS OF FAILURE We examine some of the main reasons why so many mergers and acquisitions fail.

34 marketing

Millennials: A Marketer’s Worst Nightmare?

How to reach a generation that likes to consume everything that’s out there but can spot faked passion at a glance.

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42 manufacturing

The Role of Expert System Integrators for Best Practice Kaizen is continuous improvement, not something that is done once a week, so the philosophy has to be taken on board at all times.

48 Event preview

Dates for your diary

A selection of upcoming events in 2014.

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business showcases

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Infrastructure: 50 BBT-SE

Fast track below the Alps

The Brenner Base Tunnel is one of those infrastructure projects that has an historical as well as an engineering dimension – symbolizing cross border collaboration as much as a free market in Europe.

64 DRS Construction & Project Management

Constructing Chile’s future

The construction industry in Chile has been booming in recent years as the country experiences remarkable economic growth.

74 The City of Tshwane Tshwane on the move

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The City of Tshwane is fast-tracking a new public transport policy aimed at social transformation as much as traffic decongestion: its Bus Rapid Transit (BRT) system called A Re Yeng, is a key building block of this policy.

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Industry focus: gold mining

82 82 Rand Refinery Responsible gold

As the largest integrated precious metals refining and smelting complex in the world, Rand Refinery founded at Germiston in 1920, carries a great responsibility to the industry and is an ambassador for African gold.

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94 Randgold Resources

Reaping Africa’s golden rewards

As its third quarter report for 2013 highlights, Randgold Resources’ African discoveries continue to surprise and create huge value for their stakeholders.

102 shanta gold

Gold from Tanzania

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Shanta Gold is delivering growing cash flow and has development assets as well, within one of the most stable jurisdictions in Africa.

118 agnico-eagle: Pinos Altos Mine Capitalising on a golden opportunity

Led by the Pinos Altos Mine, Agnico-Eagle’s operations in Mexico’s Sierra Madre gold and silver belt continue to go from strength to strength.

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business showcases

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mining & minerals: 128 Greenland Minerals & Energy the final furlong

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Greenland Minerals and Energy Ltd is an exploration and development company focused on the Kvanefjeld multielement project in South Greenland, which was recently given the nod by the Danish and Greenlandic governments.

138 Alpha Minerals Achieving high grades

Alpha Minerals’ strategically selected uranium and gold properties are producing the results required to take this junior exploration company to the next level.

oil & gas: 146 Damus

Underpinning Trinidad & Tobago’s prosperity

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Fulfilling an essential role in advancing the upstream and downstream oil and gas industries that promise to define the Caribbean over the coming decade.

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160 Range Resources Wide-ranging potential

Trinidad Chief Operations Officer, Walter Cukavac discusses the incredible progress made by Range Resources in a little over two years.

170 grupo zeta the gas giant

Mexico’s largest gas company is the go-to partner for companies looking to set up operations in the country.

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Energy & Utilities: 178 Hydrocol

Making things happen

Hydrocol has made its name by being an expert in developing infrastructure projects on a large scale and its legacy can today be found throughout Ghana.

186 Eskom – Kusile Power Station Project Power to the people

How a large-scale new build project should be built for the benefit of local people and communities.

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194 Element Power

An elementary approach to renewable energy

It is in Ireland where global renewable energy developer Element Power is bringing to fruition several vital wind energy developments, including the ground-breaking Greenwire Project.

marine & shipping

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202 Yantian International Container Terminals

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Carrying a region forward

2013 has been a momentous year for Yantian International Container Terminal and, as Managing Director Patrick Lam explains, the future looks equally bright.

212 Maersk

Riding the waves of change

As Maersk Line’s Chief Operating Officer, Morten Engelstoft explains, despite being the largest container ship operator in the world, Maersk Group continues to steer itself forward into new areas of growth.

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manufacturing: 224 Eti Aluminyum

Among the integrated elite

Since it was privatised is 2005, Eti Aluminyum has channelled a great deal of effort and capital into a comprehensive modernisation programme that is now set to bear fruit.

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food & drink: 234 Zambeef

Feeding a nation

Zambeef has grown from very humble beginnings to become one of the largest integrated agri-businesses in Zambia.

Construction: 246 Industrias Correagua

A proud Panamanian business

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Industrias Correagua’s quality products and passionate approach to each project has made it one of Panama’s most important companies.

252 matpro

The professional approach

In little more than four years Matpro has grown into a vital and respected supplier of services and products to Solwezi’s ever expanding construction sector.

service provider: 256 jaids

Quality in abundance

From humble beginnings as a retail centre for stationery and electrical items, Jaids is today a household name throughout the township of Solwezi, Zambia.

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top ten automobile companies by market value

2013 has seen the automotive industry continue its recovery from the dark days following the global economic crisis. Here we identify the ten companies leading the way in terms of market value Edited by: Will Daynes

Top Ten

10 nikshor / Shutterstock.com

SAIC Motors $26.7 billion

Headquartered in Shanghai, SAIC Motor Corporation Limited is a Chinese state-owned automotive manufacturing company, with origins dating back to the 1940s. One of China’s socalled “Big Four” automakers, the company boasted the largest production volume of any of its rivals in 2012, producing more than 4.5 million units, 76 percent of which were passenger vehicles. Today, SAIC sells vehicles under a variety of brand names such as MG and Roewe, and share joint venture partnerships with Volkswagen and General Motors.

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9 General Motors $38.5 billion

For 77 consecutive years, from 1931 to 2007, General Motors led the way in global vehicle sales and remains to this day one of the world’s largest automakers by vehicle unit sales. Headquartered in Motor City itself, Detroit, Michigan, the company employs some 212,000 people and does business in approximately 157 countries worldwide. In 37 of these countries it produces vehicles under twelve distinct brands, including Chevrolet, Buick, GMC, Cadillac, Baojun, Holden, HSV, Jie Fang, Opel, Vauxhall, UzDaewoo, and Wuling.

auto companies

8 Hyundai Motor Company $41.5 billion

Founded in 1967, the Hyundai Motor Company is a South Korean multinational automaker, which, along with its 32.8 percent owned subsidiary, Kia Motors, together comprises the Hyundai Motor Group, the world’s fifth largest automaker based on annual vehicle sales in 2012. Hyundai operates the world’s largest integrated automobile manufacturing facility, located in Ulsan, South Korea, which boasts an annual production capacity of some 1.6 billion units.

Hyundai’s vehicles are today sold in 193 countries through a network of more than 6,000 dealerships and showrooms.

7 Nissan Motors $43.4 billion

While the Nissan name has been in use since the 1930s its origins can be traced back several decades further giving the Japanese automaker a legacy that dates back more the a century. Today the company’s headquarters are situated in Nishi-ku, Yokohama and it is from here that its directors steer a business responsible for selling over 4.9 million vehicles in 2012 alone. In July 2013, the company announced the relaunch of its Datsun brand in an effort to target emerging markets, with initial results suggesting that its position on this list could well rise come next year.

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Top Ten

5 BMW Group $60 billion

6 Ford Motor Company $51.8 billion

Very much a part of American automotive history, the Ford Motor Company was of course founded by Henry Ford in 1903. Described

by Forbes Magazine as “the most important industrial company in the history of the United States”, Ford was responsible for introducing to the world methods for large-scale manufacturing of cars and large-scale management of an industrial workforce using elaborately engineered manufacturing sequences typified by moving assembly lines. In 2012, the company sold 2.25 million vehicles in the US alone, and today has manufacturing operations throughout the world, from the UK and Germany, to China, Brazil, Australia and South Africa.

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Bayerische Motoren Werke AG, or BMW to you and me, was founded in 1916 and makes its home in Munich, Germany. BMW is part of the so called “German Big Three” luxury automakers, together with Audi and Mercedes-Benz, which make up the three bestselling luxury automakers in the world. The parent company of Rolls-Royce Motor Cars, BMW also owns and produces Mini cars, while its global operations are supplemented by overseas subsidiaries in the US, Canada, China, Japan, India, Egypt and South Africa.

In June 2002, Forbes.com placed BMW at number one in its list of the most reputable companies in the world.

auto companies

3 Honda Motor Company $72.4 billion

4 Daimler AG $61.4 billion

Like BMW, Daimler calls Germany its home, specifically Stuttgart where its headquarters are based, and remains one of the most covered status symbol brands for the rich and powerful. By unit sales the company is the thirteenth largest car manufacturer and second largest truck manufacturer in the world. As of the beginning of 2013, the company provided employment for some 275,000 people and today owns or has shares in a number of marques including Mercedes-Benz, Smart, Beijing Automotive Group, Tesla Motors and Renault-Nissan Alliance.

With a global line-up of models that include the Civic, Accord, Insight, CR-V, CR-Z and two versions of the Odyssey, Honda’s automotive manufacturing legacy can be traced back to the early 1960s. In the decades since it has grown into Japan’s second largest manufacturer by volume, and the eight largest globally. Today its line-up varies from country to country, while its efforts in the field of producing hybrid electric vehicles has seen it emerge as a direct competitor to the Toyota Prius. As of this year the company continues to invest billions of dollars of its own revenues into research and development.

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Top Ten

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Volkswagen Group $94.4 billion

In German, Volkswagen literally means “people’s car”, and the people of Germany have every right to be proud of a home grown enterprise that has become the largest automotive company in the world by revenue alone. For over two decades the company has maintained the largest market share in Europe and in 2012 it produced the third latest number of vehicles of any company in the world. Volkswagen Group sells passenger cars under the Audi, Bentley, Bugatti, Lamborghini, Porsche, SEAT, Škoda and Volkswagen marques, and commercial vehicles under the MAN, Scania and Volkswagen Commercial Vehicles marques. While the company remains fiercely proud of its European heritage, its operations in China have grown incredibly over the last decade making this its largest market.

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auto companies

1 Toyota Motor Corporation $167.2 billion

Founded in 1937 by Kiichiro Toyoda and headquartered in Toyota, Aichi, Japan, Toyota Motor Corporation was the largest automobile manufacturer by production in 2012, with the 200-millionth vehicle rolling off its production line in July of that year. The company, which today employs over 333,000 people, has factories across the globe from which it manufactures and assembles a range of vehicles, from a list of over 70 different models sold under its namesake brand, for local markets. Among the best known of Toyota’s brands one will today find Lexus, Scion, Daihatsu and Hino Motors. From hatchbacks and SUVs to sedans and hybrids, Toyota reach continues to expand making it every bit the definition of a multinational corporation.

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H

ow many times have you heard organisations make the declaration, “Our people are our greatest asset.”?

Now for the next question… How many of these organisations actually practice what they preach? The sad truth is that far too often people pay lip service to the expression “our people are our greatest asset,” but fail to support it through their talent management processes, practices and programmes. And that’s just unfortunate — because more than ever before, research by leading firms demonstrates the link between mature, integrated talent management programmes and business success.

Talent management: A broad definition Broadly defined, talent management is the implementation of integrated strategies or systems designed to increase workplace productivity by developing improved processes for attracting, developing, retaining and utilizing people with the required skills and aptitude to meet current and future business needs.

Investing in talent management: What your CEO needs to know When building a business case for adopting talent management best-practices, and

“When organisations invest in a talent management strategy, they have a lasting competitive advantage in their people” 22 |

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integrating as well as automating processes, some Human Resources professionals still find it a struggle to make their C-level executives understand the urgency and strategic value of the investment.

Researchers and analysts provide some compelling reasons why an investment in talent management should be a highpriority on every organisation’s corporate agenda. So, if there is any doubt as to the value of effective talent management, here are some numbers that will assuage any reservations from the C-Suite.

• McKinsey’s ground-breaking War for Talent studies determined that companies with strong talent practices outperformed their peer group, earning 22 percent higher shareholder returns.

• Watson Wyatt, using its human capital index, found that good people practices can increase a company’s value by as much as 30 percent.

• Russell Investments reports that firms on the Fortune “100 Best Companies to Work for” list outperform the S&P 500 and the Russell 3000 by as much as 10 percent.

• Stanford professors O’Reilly and Pfeffer found that a change of one standard deviation in an index of human resource management practices produced increases of $20,000 to $40,000 in stock market value per employee.

The bottom line here? Talent isn’t just important — it is (or should be) a competitive advantage.

It’s all in the strategy For companies to gain competitive advantage from their people, they need

Operations

to develop a strategic and integrated approach to talent management that drives high performance across the entire organisation. The value of an integrated talent management strategy is that it provides a focus for investment in human capital and places the subject where it belongs — higher on the CEO’s agenda.

Aligning talent strategy to organisational strategy According to the CIPD (the professional body for HR and people development), “Ensuring that talent strategy is closely aligned with the corporate strategy must be a priority. Strategic analysis from the business perspective should feed into an HR forecast, which can help shape an organisation’s tailored approach to talent management.”

What are the costs of a misaligned organisation? As shown in the Project Management Institute’s Pulse of the Profession In-Depth Report: Talent Mana gement, “High-per for ming organisations are more than twice as likely than low-performing organisations (69 percent and 31 percent) to have talent management programmes aligned to organisational strategy.”

So, as you can see, competitively speaking, alignment is a must.

Companies that do recognise the importance of best-practices talent management as a competitive advantage have increased focus on and investment in programmes. Here are just some of the key business drivers for building the case for talent management.

• I ncreased productivity: the top performer differential is 2.5 to 10 times that of an average employee (Sullivan, 2008). Other studies of knowledge intensive organisations, like IT or healthcare, have shown the gain can be as much as a 100 to 200 percent.

The more top performers you have, the greater the organisation’s productivity.

Hiring better people to fit into the organisation and nurturing your existing top talent are key.

• Improved organisational readiness: 70 percent of organisations have an insufficient pipeline of talent for critical jobs (Charan, 2008).

• R educed costs: Implementation of employee and manager talent management self-service processes results in an average 20 percent reduction in HR transaction costs (CedarCrestone, 2008).

In conclusion When organisations invest in talent management strategy that drives higher productivity, and better results, they have a lasting competitive advantage in their people. At least, that’s what the numbers tell us. So the question is, with all the value it brings, why wouldn’t CEOs want to put creating an integrated talent management strategy at the top of their agendas?

About the author Scott Russell is a Certified Human Capital Strategist and Regional Manager at Halogen Software covering the UK. www.halogensoftware.com

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Why reflection is key to innovation in the enterprise Why businesses that are able to understand their past, are best placed for the future Words by

Juan-Jose Juan

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n business - new isn’t always better. New technologies might appear attractive, but they require time and imagination before they realise their full potential.

The best business innovations don’t come from innovating for innovation’s sake nor are they always borne out of wild or prolific ideas – they come from strategic thinking and applied process.

They come from assessing existing technologies and information across industries and business functions and matching them with core competencies.

Today, many organisations look to new technologies and practices to innovate and future proof themselves to ensure the best chance for success, but little do they realise that the key to innovation is about understanding what they have and using it in news ways. In this way, enterprises can create the right tools to help them better prepare for the future.

Future proofing the enterprise The sheer size and scale of Multi-National Corporations can make future-proofing a complex task for companies seeking to enhance flexibility, connectivity and stay relevant in an increasingly competitive market.

More and more enterprises are turning to the cloud, machine-to-machine and

mobile technologies, as well as reviewing global communications strategies, to drive innovation and keep pace with the everchanging business environment. Using these technologies businesses are better placed to capture, access and analyse information to develop meaningful insights and identify opportunities that can drive creativity and profitability throughout the business.

True innovation, however, goes beyond simply being able to access greater volumes of information. It’s about how this information is disseminated and consumed throughout the business.

Making sure the right information is accessed by the right people at the right levels is crucial to ensuring the right business decisions can be made based on meaningful and accurate insight.

Something as straight forward as having the right dashboards in place is a simple but effective way of doing this. Although it sounds obvious, many dashboards reflect the complexity of the technologies and information they portray. By refining them and making them more user-friendly, they are able to provide executives with greater and more accurate visibility over a multitude of company activities and costs, such as global device deployment, enterprise wide comms or the latest sales or procurement

“True innovation goes beyond simply being able to access greater volumes of information. It’s about how this information is disseminated and consumed throughout the business” BE Monthly

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costs at any time and on any device.

All of which makes them better able to understand them and make decisions to drive change within the business.

Angry birds for the enterprise Enterprises are also looking to innovate by developing programs and applications that people want to – rather than have to – use. Everyone is familiar with the angry bird craze that swept the nation a few years ago. What if we could develop something similarly engaging that people could use in the enterprise?

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“Many businesses have already introduced BYOD strategies and have seen the potential it has to increase mobility among employees” Many businesses have already introduced BYOD strategies and have seen the potential it has to increase mobility among employees. The missing piece of the puzzle for many however, is turning this increased mobility into increased collaboration.

The more forward thinking enterprises have already taken steps to address this.

For example, some HR departments are currently working on ways to unlock the potential of technologies already used in other industries – working with game developers to create a culture that appeals to and motivates Generation Y end-users.

They are keen to develop something that’s attractive to end-users and prospective new talent to access and use by encouraging them to interact with each other – be it sharing content or discussing problems.

Angry birds for the enterprise might be slightly overreaching because at the end of the day work and play are two very different things. However – it is achievable. Be it a central resource for sharing ideas or collaborating on issues fostering a community of help and camaraderie then it just might work – it just needs to dangle the right carrot for people to engage with it.

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Big Data - obviously Of course no article is complete without the obligatory hat tip to Big Data. Many in the industry are bored to tears at the mere mention, but the fact of the matter is – it’s a very big deal, and one that’s slowly creeping across all facets of the enterprise.

Marketers are among the latest departments to innovate by aggregating the information within their mobile networks to extract customer patterns that can fundamentally change how their businesses operate. And again this goes back to having easily consumable dashboards.

Utilising this information they are able to use the network information to identify real-time patterns in people’s movements providing better visibility into how busy a shopping center is and if more staff are required to service customers, or identify how full a car park is to alert people when it is full or if there are spaces available.

Pre-dashboard era, they wouldn’t have known what they were looking at without a data scientist sat over their shoulder explaining it to them. Now however, anyone can look at their computer screen and make sense of what used to be nothing but a series of inexplicable numbers, lines and code configuration requests. Thus it’s providing the means to simply access and understand this information that is where true innovation lies in this era of hyper consumption.

Think inside the box Ultimately, everyone has access to the same technology and uses the same equipment so this in itself won’t be enough to differentiate one enterprise from another. The difference is in what you do with it.

“Pre-dashboard era, they wouldn’t have known what they were looking at without a data scientist sat over their shoulder explaining it to them” M2M technology for example has existed for years, only recently have business started to apply it existing technologies – connecting everything up to take real-time readings. In India, one soft drink vendor found that 20 percent of its drink dispensers were going missing. M2M was used to identify that as people there didn’t have fridges in their house, they were taking the dispensers so they could keep their milk chilled. By working this out they were able to reduce the number of fridges stolen from 20 percent to 3 percent.

In an era where pressures faced by businesses are extreme people often get caught up in trying to find out what new solution will make their lives easier.

STOP. Look around and assess your tools to see what’s right under your nose before you start laying out huge costs for newfangled untried technologies.

Those businesses that are able to look back and understand their past will be much more successful at innovating in the future.

About the author Juan-Jose Juan, Global Leader of Enterprise Innovation, Vodafone. www.vodafone.com

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Mergers and A The RISKS O

We examine some of t so many mergers a Words by

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Strategy

Acquisitions OF FAILURE

the main reasons why and acquisitions fail

phen Archer

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orporate mergers and acquisitions have even higher failure rates than marriages and that over half of them have destroyed shareholder value.

According to research from KPMG, 90% of mergers and acquisitions fail, compared with around 40% - 50% of marriages. But such daunting prospects have failed to deter big corporations like American Airlines and Office Depot from attempting to defy the odds.

Companies merge for a variety of reasons: expansion of market share, acquisition of new lines of distribution or technology, or reduction of operating costs. But corporate mergers fail for some of the same reasons that marriages do - a clash of personalities and priorities.

The fact that mergers so often fail is not, of itself, a reason for companies to avoid them altogether. It does, however mean that merging is never going to be a simple solution to a company’s problems.

Here are some of the main reasons for the M&A failures: Synergies So often the synergies are propounded around technical knowhow, such as complementary products or market access.

This may be sound in theory, but the execution so often fails because it requires

extra efforts from all employees in both companies. An example is the epic failure of the when eBay decided to buy Skype for $2.6 billion in 2005, only to sell the company four years later for $1.9 billion.

Apparently, it didn’t work out because eBay and Skype were unable to integrate their technological systems successfully.

Above all, to gain synergies, as with most gains for M&As there needs to be change. Change is difficult, especially in large companies. British Airways only really shook off the BEA vs. BOAC divide for the 1970s when it moved to Terminal 5 in 2007. Change integration for full synergistic gain can only happen by creating the framework that is practical and that allows people to work in happily.

Even in these modern times, business leaders think that change and synergies can be forced through. Indeed, even publicly they will say “we will push this through”. Therein lays the admission that there is a barrier.

Back office savings There only needs to be one HR, finance, IT, manufacturing, and marketing function.

When Orange merged with T-Mobile in 2010 there was talk of £545m back office savings.

This number is not trivial and behind this will be vast amounts of disruption. Look what happened when NTL bought Virgin

“The fact that mergers so often fail is not, of itself, a reason for companies to avoid them altogether. It does, however mean that merging is never going to be a simple solution to a company’s problems” 30 |

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“Two businesses often have very different strategies and growth models. These are the fundamentals of a business usually unseen from the outside though usually detectable once on the inside” or when Barclays bought Woolwich. There was chaos and huge customer frustrations as the service levels fell during the merging of functions. That said, the back office savings are usually the most reliable source of upside in an M&A. Strategy and growth models Two businesses often have very different strategies and growth models. These are the fundamentals of a business usually unseen from the outside though usually detectable once on the inside. M&As often demand some alignment of strategies.

This assumes that one or maybe both were flawed in the first place. The result is either a new one or the imposition of one party strategy on the other. This usually

leads to some level of failure. One only has to look at GE and its ‘blueprint’ for acquisitions to see how the ‘one size fits all’ approach to business strategy leads to failures. Each business, market and customer franchise is unique in some way – no matter how small that may be. This often gets overlooked though ignorance or arrogance.

Brand management The brands are often ignored by the M&A planners because they fail to fully understand what makes up brands and their equity. The same should not be true of the boards but none the less, how often have we seen M&As where very strong brands are swept aside by

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“Clashing cultures can be the undoing of the deal unless a proper culture adoption, harmonisation or change programme is in place� the name of the new owner. This can be disastrous and destroy value and indeed simply throw away existing and loyal customers. All brands should be respected and invested in where they have current and future value.

Customer focus This is so often forgotten in the M&A frenzy. Boards do not stop and say – what will the customer think of we shift distribution, adopt common pricing etc etc? The customer is the life blood of the business along with its cash. How can this be forgotten? Still M&As take place with the arrogance to ignore the customer.

Management competence Is the competence in both organisations to equal measure and if not then how will balance be achieved? Does the acquiring company really understand its new acquisition? Too often the acquirer parachutes in its own team and fails to grasp the idiosyncrasies of the acquired company. If a new, single board is to run the combination then so often this board cannot manage to complexities of the new, larger organisation. Simple management weakness is a common trap.

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Company culture Clashing cultures can be the undoing of the deal unless a proper culture adoption, harmonisation or change programme is in place. This needs managing well with strong champions.

Culture is a great enabler but it can be the hidden destroyer. One option is to start afresh. This involves setting aside the cultures of the two organisations involved and creating a new culture for the new organisation.

This approach proved highly successful in the merger of Glaxo Wellcome and SmithKline Beecham in 2000 forming GlaxoSmithKline (GSK). Both organisations decided to engage their combined workforce in a process of defining and instilling a new vision and new set of values for GSK that everyone could sign up to. Nearly fourteen years later, the company is not only a huge commercial success but is also recognised around the world as one of the best companies to work for.

Leadership Orange has outstanding, proven leadership. All too often leadership is tested beyond its abilities when it comes to handling a bigger commercial enterprise with integration challenges.

This is one area that is more vital than most. For shareholders the true motivation of leadership is critical. This must be fully understood.

The analysis It’s no secret that plenty of mergers and acquisitions don’t work. Those who advocate mergers will argue that the

“All too often leadership is tested beyond its abilities when it comes to handling a bigger commercial enterprise with integration challenges” merger will cut costs, boost revenues by more than enough to justify the price premium. It can sound so simple: just combine computer systems, merge a few departments, use sheer size to force down the price of supplies and the merged giant should be more profitable than its parts. In theory, it all sounds great, but in practice, things can go awry.

But remember, not all mergers fail. Size and global reach can be advantageous, and strong managers can often squeeze greater efficiency out of badly run rivals. Nevertheless, the promises made by deal makers demand the careful scrutiny of investors.

The success of mergers depends on how realistic the deal makers are and how well they can integrate two companies while maintaining day-today operations.

About the author Stephen Archer is a business analyst and director of Spring Partnerships, a UK business consultancy that advises companies like Carlsberg, GE Healthcare, Disney and others about their leadership and corporate strategy. www.spring-partnerships.com

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Marketing

Millennials: A Marketer’s Worst Nightmare?

How to reach a generation that likes to consume everything that’s out there but can spot faked passion at a glance Words by

Robin Hafitz & Allison O’Keefe Wright

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illennials” (born between 1982 and 2000) are referred to in marketing and research circles as the largest and most elusive generation of all time. They are often painted as a group of self-obsessed, multi-tasking, digital natives with short-attention spans, limited brand loyalty and a sense of entitlement that knows no bounds. In other words, a generation that seems like a marketer’s worst nightmare.

While many of the descriptions above may, in fact, be supported by data, they certainly don’t paint an accurate picture of this generation. But it’s hard to get a complete picture when much of the data appears contradictory.

Focus on one data set and you’ll hear that they are a generation of activists, uniquely equipped to join forces as a community and mobilize, more dedicated to making a difference and leaving their mark than any generation before. Is this true? Yes. Does this mean that they don’t also spend endless hours playing mindnumbing video games, partying, and just having fun? Of course not – they’re young!

Research continually shows that Millennials are a generation more likely to be friends with their parents and eschew the “Generation Gap.” True?

Absolutely. Does this mean they never

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act out or rebel against their parents?

No - that ‘s part of what young adults do as they grow as individuals.

Probably most commonly, you hear that Millennials are a generation obsessed with authenticity, that they demand it from brands, from celebrities, and from content, and that without it you will never win their love. Is there truth in this? Absolutely. Does this mean that they hate studio created popstars, so-fake-you-can-smell-it reality TV shows, and fantasy fiction? Come on.

Check your Twitter trends.

Marketers need to decode Millennials as people So how do you make sense of this seemingly contradictory generation?

We believe the reason marketers find Millennials so hard to decode is because they focus too much on Millennials as “a people,” and too little on realizing that they are in fact “people.” People with varied passions. People with personal and contradictory views. People, like us, influenced by their time and life stage and making the best of it. And, frankly,

Marketing

at over 80 million strong, they’re too big a cohort to pigeonhole.

Are we saying that generational insights are useless? Given what we do for a living, of course not. We ARE saying is that as an industry, we need to learn not to obsess over such finite extremes.

For example, just because Millennials watch and share a crazy amount of short form video online, doesn’t mean that TV and long form content is dead to them.

These are people who marathon full seasons of ‘Breaking Bad’ in two days and then find themselves in a cat video wormhole. So much for short attention spans. Both a love of short-form and a passion for long-form can co-exist in the same person - this generation, and the world, do not operate with an either/or switch. It’s both/and.

The both/and can come into focus, though, when one realizes that both their short form snacking and long form binging are driven by the same undercurrents: a desire for control, the immediate availability of amazing quantities of great content (and even more crappy content), and a love of

“For Millennials, that means they’re enjoying short-form and long-form content, just-made and re-discovered content, silly and deep content - as long as they like it” immersive entertainment experiences developed early on by their interaction with games.

Ubertrends fuel contradictory behavioral trends To break these subcurrents down: the desire for control is an ubertrend not limited to Millennials. Give people DVRs and remote controls, Google search and immediate gratification capabilities, and you unleash the beast in us all: “I want what I want when I want it” (An ubertrend we call IWWIWWIWI). Short form video gives the sense of control provided by less commitment. Bingeing on long form allows people to refuse to participate in the cliffhanger syndrome. I WILL find out what happens next, and I will do it NOW. The availability of content is also something that affects us all. It means we have more to choose from, so our menu of stuff that we like tends to grow.

For Millennials, that means they’re enjoying short-form and long-form content, just-made and re-discovered content, silly and deep content - as long as they like it. And bigger and better TVs, 3D movies, and – most of all – games spawned

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their particular love of immersion in entertainment. The high quality long form created by networks like AMC, FX, HBO and Starz shares something with the short form wormhole facilitated by Reddit or YouTube - the sense of total immersion.

The implication for marketers is to look not just at the behavioral trends, but also at the undercurrents that portend them. To think of Millennials not as some weird group with seemingly contradictory behaviors, but as a huge group of individuals affected by the subcurrents of their time, and embracing the both/and of multiple possibilities. Both short-form and long-form represent opportunity, if they are immersive, served up in a way that taps into consumers ‘ desire for control, and can rise to the top of the content heap for some group of people by speaking to their passions or hitting their hot buttons.

We spend a lot of time talking to people about their viewing and consumption habits, their values and beliefs, their selfdefinitions and dreams. Though they are as diverse as - well - individual people, there are many common undercurrents that we’ve seen, the understanding of which can help marketers and

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“Millennials are likely to keep shacking up at Mom and Dad’s home, to save cash. It’s a good thing they also tend to like Mom and Dad” programmers get smart about how to connect to this sometimes seemingly contradictory generation.

“It’s the (passion) economy, stupid” Millennials are people, and people are, of course, deeply affected by their circumstances. After all, “The Greatest Generation” wouldn’t have been if they hadn’t had a war to fight. For Millennials, a key circumstance is that they are coming into their own in the workforce in a weird time (though it may be the New Normal). Income disparity is growing, global economic energy is moving away from the USA, diminished expectations are the norm, and money has shifted into just-invented, technology-centric sectors.

The economy is slowly improving, but Millennials are stuck dealing with a world in which the “next generation” can no longer expect to out-earn the previous one. Their results are, again, seemingly contradictory behaviors that make sense given the undercurrent: Tech Entrepreneurialism lives side-by-side with anti-Wall Street activism. A person can actually admire celebrities who “sell out” and “get paid” and still buy into

Marketing

Russell Brand’s call to revolution against income disparity.

Under a number of notable Millennial behavioral “trends” lays economic reality as an undercurrent - often in combination with several other undercurrents. For instance, Millennials are, in fact, likely to keep shacking up at Mom and Dad’s home, to save cash. It’s a good thing they also tend to like Mom and Dad (coming in Undercurrent 3). Millennials are buying fewer cars, which are expensive and less necessary than in the past, which is driven partly by simple economics. That, by the way, creates a market for other sorts of proofs of adulthood and rites of passage, such as learning to cook (Millennials are big foodies), or buying oneself a watch to reward a personal achievement.

Millennials: The passion generation?

One of the most interesting things that we’ve seen among Millennials as a result of the undercurrent of diminished economic expectations is what we call the rise of The Passion Economy. One might even call Millennials “The Passion Generation.”

With less of a go-go economy (and a lot

“Millennials are far more likely to define themselves by their passions, whether completely individualistic and idiosyncratic or popular and trendy - or both”

of Millennials underemployed as baristas or Task Rabbits), career has become less important as a source of identity to Millennials than to previous generations - even for those tech entrepreneurs.

Millennials are far more likely to define themselves by their passions, whether completely individualistic and idiosyncratic (that’s what the Long Tail is for) or popular and trendy - or both.

They participate in, trade and barter in; both create and consume, a Passion Economy of products, services, ideas, and memes. From Kickstarter to Quirky to Reddit to Twitter to Etsy to Potterworld, and on and on - brands, platforms, and channels that “get” the Passion Economy will do well with Millennials.

Geeking out for fun and profit In The Passion Economy, geeking out is cool. In fact, geeking out for fun and profit is one of Millennials favorite sports.

People used to be generally smart, and specifically stupid. A competent adult couple could kill a deer and gut it, break it down and cook it, plant a garden, build a wall, school some kids, make some clothes, write letters, sing a song, and play

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“Many Millennials would love to - and even expect to - make a living from their passion(s), if not soon, then down the road” the piano. Now we are generally stupid and specifically intelligent. (Thanks to Colin Collard for this idea) We “outsource” competence in killing and gutting and raising our food, educating our children, making our clothes, and our music.

We focus on being specifically intelligent in whatever thing we make a living at, or get our jollies doing (which might be making or collecting music, of course). As the fire hose of Internet content has given us more and more opportunity to become more and more specifically intelligent, geeking out on passions has become a cool way to express one’s identity. You know more about sports drinks than anyone else? Great! Tell me about that! Whether geeking out about barbecue, ‘Breaking Bad,’ ‘ Big Data,’ or butterflies, it’s all-good, and gives you cred in The Passion Economy.

Many Millennials would love to - and even expect to - make a living from their passion(s), if not soon, then down the road. Their make-up videos, cooking or nutrition blog, content creation, Kickstarter idea, Etsy store, etc., are what they “see themselves doing” down the road. Will they succeed? Well, certainly not all of them. But we can expect their infusion of passion into the corners of the world to result in some interesting

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consequences over the next decade. And if they don’t make money, they still get the satisfaction of expressing expertise and creativity, achieving status and recognition, and having influence by cultivating and sharing their passion.

Doing > Owning In The Passion Economy, experience is valued more than objects. Ben Hindman, a brilliant millennial tech entrepreneur, told us, “If someone posts a picture of themselves on Facebook standing by the car they just bought - that they OWN - I would think that was sick. But if they show me themselves driving it, or show how much expertise they have about it, that is cool.”

Over and over, we see among Millennials that even though they can probably multi-task you under the table, they ‘re also striving more to actually focus (and even unplug) to dive deep into the things they really love. When something truly matters, they will both immerse themselves in it with focus, as well as explore all the fringes of it available in our long-tail world.

For marketers and content-publishers, The Passion Economy invites you to tap

Marketing

“To think you can reach ‘Millennials at large’ with any message or idea is unrealistic - there are just too many of them, and they are just too diverse”

into organic communities of passion to sell your wares. It suggests that you connect Millennials to the content they need to Geek Out over your brand. It implies that you should invite them to express their passion through their own creativity - after all, we can thank passion for content phenomena like Fifty Shades of Grey and The Mortal Instruments, which started out in the Fan Fiction world - a Passion Economy if ever there was one.

What’s your passion?

Most importantly, as a marketer or brand-builder, if you want to connect with Millennials, focus on your own core meaning. We’re not talking about a meaning you’ve “created” to match some trendspotter’s idea of what Millennials

want, but a meaning that makes you feel passionate, and that your people are genuinely passionate about. Don’t worry obsessively about Millennials’ generational differences, but do study and embrace the passions and idiosyncrasies that can connect them as individuals with your unique offering. Make sure also to get to know the Millennials that really “get” you...they are uniquely equipped to spread a meaningful message to millions.

To think you can reach “Millennials at large” with any message or idea is unrealistic - there are just too many of them, and they are just too diverse. But if you make sure you know whom YOU are and can express it authentically and with passion, you’re likely to make the connection.

And don’t forget to thank each and every one of them, personally, later. Is that really too much to ask after everything they do for you?

About the authors Robin is CEO of Open Mind Strategy, LLC; Allison is SVP, Research and Strategy at OMS. Together they have conducted extensive qualitative and quantitative research with young consumers around the world, and have broad experience developing audience insights for a wide range of consumer brands and entertainment/content companies (MTV, AMC, Yahoo! Comedy Central, Amazon, EMI, and many others). Allison is technically a Millennial. Robin is not. www.openmindstrategy.com

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The ro Expert Integr for best

Kaizen is continuous imp that is done once a week to be taken on bo Words by

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Thom

Manufacturing

ole of System rators practice

provement, not something k, so the philosophy has oard at all times

mas R. Cutler

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Kaizen: Simply Tools with Lean Impacts Lightbox is just a tool to quickly generate design information that can create CNC produced part protection. This part protection considers part characteristics (Class A surface, odd appendages, weak/ strong points) and correct packaging materials to allow the part to flow and move through the facility with the least amount of risk.

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Shadow Boards, Kit Trays, Dunnage, Rails and Partition Trays are other elements to improve a material handling and manufacturing operation process.

Troligiq USA’s Luman Temby reported, “When parts are moved in the plant, damage can result from forklifts and transportation, people, other parts, or process. Custom packaging and part protection solutions provide answers to reduce risk in part movement and handling in all of those areas.”

Creating customized visual I.D. tool boards, error-proofing shadow board and part protection trays on the LightBox all are quality driven considerations that eliminating part damage and process errors.

Best practices are demonstrated in two specific areas of quality, part damage and process errors. Part damage results from parts not being sufficiently contained, protected, or packaged thus being subject to conditions that can impair quality (dents, scratches, and impacts). Process errors result from the wrong type or quantity of parts arriving to an operator that can cause process delays and losses.

Temby strongly suggested, “Designing integrated material flow, material presentation, and material protection LightBox

©2014 Trilogiq

A

ny kaizen event will reveal how one small incremental process improvement can be worth significant bottomline impacts. Kaizen, Japanese for “improvement” or “change for the best,” refers to philosophy or practices that focus upon continuous improvement of processes in manufacturing, engineering, and business management. When used in the business sense and applied to the workplace, kaizen refers to activities that continually improve all functions, and involves all employees from the CEO to the assembly line workers. It also applies to processes, such as purchasing and logistics, which cross organizational boundaries into the supply chain. By improving standardized activities and processes, kaizen aims to eliminate waste (lean manufacturing). Kaizen was first implemented in several Japanese businesses after the Second World War, influenced in part by American business and quality management teachers who visited the country. It has since spread throughout the world and is now being implemented in environments driving productivity.

Manufacturing

“Designing integrated material flow, material presentation, and material protection systems using a variety of methods and materials is critical. The purpose of these systems is to consider how a part moves through a facility or value stream and reduce the risk of damage at each step” systems using a variety of methods and materials is critical. The purpose of these systems is to consider how a part moves through a facility or value stream and reduce the risk of damage at each step.”

The Role of Expert System Integrators for Best Practice Integrated solutions often falls to the systems integrator with whom the customer has built a trusted relationship. The full gamut of services based in wisdom and experience of potential solutions options is critical.

Sadly, the majority of system integrators in material handling can be described as order-takers. Rather than actively seeking all the possible integrated automation solutions for the enduser customer, products are ordered, delivered, and installed. Trilogiq USA, based in Livonia, Michigan, pioneered the holistic team consultative approach using an evaluation methodology.

Lean manufacturing is an elevated concept, yet much of the waste to be eliminated and continued process improvement can be made in the very smallest incremental improvements.

Strategically planning to work with a singular expert system integrator to analyze, assess, and acquire the best

overall integrated solutions may reveal something as simple as tubing selection to achieve lean best practice results.

Tubing Selection Driving Productivity Bob Rechul, a sales engineer with Trilogiq USA, brings nearly two decades in the tube and joint field where he processed reviews to reduce waste, improved manufacturing quality, reduce cost, and improved operator ergonomics. “Tubing is one area that manufacturers can immediately realize increased productivity while lowering manufacturing costs. Simply using the best tubing solution often results in a 12-15 percent increase per year in productivity,” shared Rechul.

Tubing expertise is one of the shortest paths toward lean results. Holistic material handling experts often define the elimination of poor choices and rapid identification of best options.

Rechul worked to implement 5S and ran kaizen events at General Motors, Ford, and Chrysler as well as many aerospace, medical device and, food service industries.

Any vendor can sell tubes and joints; tubing improvements must be combined with all of the elements of efficient material handling elements

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©2014 Trilogiq

Triloqiq TUBES

for holistic process improvement; the product approach is not a lean bestpractice. A partnership approach with the customer from conception to long after the execution is required to ensure products and solutions surpass the needs of manufacturing customers.

Quality Assurance is best achieved when tube fittings are designed, manufactured, quality controlled and distributed to be totally “interchangeable.” The precision manufacturing of products to stringent tolerances under rigid quality control procedures ensures the safety, performance and reliability of service.

The extrusion process is the critical part of ensuring the integrity of a complete solution. The quality of this plastic coating (extrusion) is dependent on the raw plastic chosen for its durometer.

The plastic must be suitable to the fittings used for the complete assembled

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solution. If improper plastic material is to extrude the tubes, the fittings will not properly or safely adhere to the extrusion. The thermoplastic extrusion process to coat their steel tube must provide several strength improvements over powder coating and other coating alternatives. Damaged tubes cost big money, requiring diagnosis, replacement, and repair. This downtime is a huge waste that can be easily avoided. Tubing connectors with a non-slip nub, which grips the thermoplastic coating, is considerably better without marking or damaging the tube. Inspection is always an import job by tube and connector suppliers.

Tube fittings are often manufactured in accordance to conform to the ISO 9001:2000 Quality Standard.

From tubing, to CNC, to Lightboxes, a holistic approach can be observed, quantified, and measured in quality. In material handling, the three functional areas are material f low, material presentation, and material protection.

Tube and joint solutions typically function in the first two areas where

“A partnership approach with the customer from conception to long after the execution is required to ensure products and solutions surpass the needs of manufacturing customers”

Manufacturing

CNC and Lightbox solutions work in the third. The impact on quality, specifically part quality, is different in each area.

Material flow is measured when parts are moved in the plant; damage can result from forklifts and transportation, people, other parts, or process. Tube and joint solutions (along with Automated Guided Carts (AGCs), autonomous driverless mobile robots, and integrated part protection) help to address each of those causes of errors by right sizing the material flow and better containing the parts when moved.

Material presentation is critical because when parts are not presented to the operator at the line in a safe, ergonomic fashion, damage can often result when the parts are moved awkwardly. Tube and joint structures provide the best ergonomic presentation of parts. They not only to improve environmental, health, and safety (EH&S) measures, but also to allow the operator to handle parts in the easiest way to respect the part’s quality integrity.

Material protection is the most valuable area of part quality that holistic integrated lean solutions providers can implement. This discipline can exist independently, or work in

“Material protection is the most valuable area of part quality that holistic integrated lean solutions providers can implement” conjunction with material flow and material presentation. Experienced and thoughtful systems integrators consider how parts are best packaged, moved, and presented until they are finally used. Most of the damage to parts inside of a manufacturing facility occurs due to poor protection and packaging design at some point in the process.

Kaizen is a daily process, the purpose of which goes beyond simple productivity improvement. It is also a process that, when done correctly, humanizes the workplace, eliminates overly hard work (“muri”), and teaches people how to perform experiments on their work using the scientific method and how to learn to spot and eliminate waste in business processes. The process suggests a humanized approach to workers and to increasing productivity.

About the author Thomas R. Cutler is the President & CEO of Fort Lauderdale, Florida-based, TR Cutler, Inc. Cutler is the founder of the Manufacturing Media Consortium including more than 5,000 journalists, editors, and economists writing about trends in manufacturing, industry, material handling, and process improvement. Cutler authors more than 500 feature articles annually regarding the manufacturing sector. Cutler is the most published freelance industrial journalist worldwide and can be contacted at trcutler@trcutlerinc.com and can be followed on Twitter @ThomasRCutler. www.trcutlerinc.com

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3-6 February, 2014

Cape Town, South Africa

Cape Town South Africa

Where the World Connects with African Mining.

Mention offer code M14BE and save US$100 through 24 January 2014

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3-6 February 2014 cape town, south africa Investing in African Mining Indaba is the world’s largest mining investment event and Africa’s largest mining event. For 19 years, Investing in African Mining Indaba along with its partners in Africa have channeled billions of dollars of foreign investment into the mining value chain. Mining Indaba is the world’s largest gathering of mining’s most influential stakeholders and decisionmakers vested in African mining. 2013 was a record breaking year, with more than 7,800 individuals representing more than 1,500 international companies from 100 countries and approximately 45 African and non-African government delegations. This is where the world connects with African mining.

Global professionals including key mining analysts, fund managers, investment specialists, and governments clearly define Mining Indaba as their preferred venue for obtaining the most current economic and mining developments from the world’s leading experts on African mining. It is held annually at the Cape Town International Convention Centre in Cape Town, South Africa and is organised by Mining Indaba LLC. www.miningindaba.com READER OFFER: Quote offer code M14BE to obtain your Business Excellence US$100 discount.

9-12 February Denver, Colorado, USA The International Society of Explosives Engineers will sponsor the 40th Annual Conference on Explosives and Blasting Technique at the Hyatt Regency Denver at the Colorado Convention Center in Denver, Colo.

Launched in 1975, the Annual Conference on Explosives and Blasting Technique is the world’s largest forum for commercial explosives and blasting technology, presenting the latest developments and bringing together researchers, educators, field blasters and manufacturers. www.isee.org

2014 CONEXPO-CON/AGG 4-8 March 2014 Las Vegas, Nevada, USA

CONEXPO-CON/AGG will represent an immense unveiling of all the newest equipment, technology and product breakthrough in construction.

From earthshaking big iron to groundbreaking innovations, it’s all assembled in one place to help you work smarter.

CONEXPO-CON/AGG 2014 – If it’s new, it’s here! www.conexpoconagg.com

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BBT-SE

Fast track below the Alps The Brenner Base Tunnel is one of those infrastructure projects that has an historical as well as an engineering dimension – symbolizing cross border collaboration as much as a free market in Europe

written by: John O’Hanlon research by: Abi Abagun

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BBT-SE

T

he Alps are Europe’s great natural boundary, cutting Italy off from the rest of the continent. Getting from one side to the other whether for purposes of travel, war or trade has been a headache ever since ‘the iceman’ Ötzi lost his life 5,000 years ago on the Fineilspitze, not 20 miles to the east of the Brenner pass.

The Brenner was not used for regular traffic until the second century AD and remained a very minor crossing right up to the late 18th century when Maria Theresa caused a road to be built. It is however the lowest of the six major Alpine passes, which is why it was chosen as the route for the Brenner Railway from Innsbruck in Austria to Bolzano and Verona in Italy. However the railway still has to climb to fairly dizzying heights, reaching 1,371 metres at its highest point, on the border between Italy and Austria and overcoming the gradient by means of two spiral tunnels.

That means it is a slow route, exacerbated by the need to change engines.

Goods traffic between northern and southern Europe is constantly increasing and it is the goal for much of this traffic to be transferred from road to rail to protect the sensitive Alpine environment, which is a global heritage. The case for creating a ‘flat’ rail link, along which more of this freight can travel became compelling as long ago as 1971 when the International Union of Railways (UIC) commissioned a study for a new Brenner railway with a ‘base tunnel’ – a term which is a direct translation of the German ‘Basistunnel.’ By 1989 three feasibility studies had been drawn up which formed the basis

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the most dynamic in the European economy.

Thanks to this transmission “backbone”, the offices and construction site of the BBT can “Lighting up” the work in the Brenner Basis use a fiber-optic access network (FTTH) Tunnel (BBT) is a fiber-optic data network, with a speed of 100 Mbit/s or a radio link at provided by Brennercom that allows 30 Mbit/s, achieved with MPLS technology, communications between the south side and which optimises the flow of administrative and the north side along the route between Bolzano technical information. and Innsbruck, where the offices of BBT are Brennercom has been present in the regional (voice connection is also provided in Bolzano) market since 1998 and is now increasing and between the two tunnel portals of Fortezza the range of services it offers to a wider / Franzensfeste and the intermediate one of geographical area. Optical networks, DSL Stafflach - Wolf. The operator of reference or, in areas with more difficult accessibility, for the enterprise market in Trentino - Alto radio links allow broadband services and the Adige as well as the Cloud Service Provider, necessary data infrastructure to be given to Brennercom has its head offices in Bolzano a large customer base, which numbers over and other offices in Trento, Verona, Milan, as 7,000 companies and government agencies, well as subsidiaries in Austria (Innsbruck) and providing, amongst other things, several Germany (Munich): all “nodes” in a high-speed business parks. fiber-optic transmission network that connects Top-level communication networks and IT a large transnational area which is one of services find a new synergy in Brennercom.

The three new-generation data centres in Bolzano, Trento and Innsbruck, connected by one of the fastest transmission networks in the whole of Europe, are at the base of the innovative range of solutions based on the cloud computing model. Company clients can thus access data processing and storage as well as connectivity resources in a flexible and “tailored” way, with the additional guarantee of having information totally protected, thanks to top-level technology platforms, partnerships with the most authoritative international brands, international certifications and support by qualified personnel.

Dr. Karl Manfredi, CEO

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BBT-SE

for further planning of the Brenner Base under construction or actually operational.

Tunnel, however it wasn’t until 2004 that The only way to create a high-speed line BBT-SE, the Austro-Italian company that is across the Alps was to tunnel below them: building the tunnel, was formed. the maximum elevation above sea level is just The BBT is much more than just a tunnel 794 metres and the steepest incline just 6.7 through a mountain. The ₏8.5 billion degrees. The BBT is 55 kilometres long from Fortezza in Italy to Innsbruck project, funded by the EU and the Austrian and Italian North, however if you add it governments, is the main to an existing section built element of the new Brenner in 1994 that bypasses the railway from Munich to city emerging at Tulfes, Verona. It is a key link in the the tunnel is 64 kilometres priority EU project to create a in length, making it the 2,200-kilometre railway axis longest underground railway between Berlin in Germany connection in the world.

Cubic feet of soil and Palermo in Sicily. Three Professor Konrad extracted quarters of this axis is already Bergmeister was appointed

17

million

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US UI E R LD W US UI E R LD W U UI WE R LD W U UI WE R E T LD BU US T E T LD BU US T E ST LD BU US T E ST LD BU US BU W T I T RU BU W T I T R BU W T I T R BU W T I T ST ILD E B RU LD WE ST ILD E B RU LD WE UST ILD E B RU LD WE UST IL E B RU LD W T UIL ST TRU BU W T UI ST TRU BU W T UI ST TRU BU W D T UI ST TR ILD E B RU D WE ST IL E B RU LD WE ST IL E B RU LD WE ST IL E B RU LD WE D D D S T TR UIL T W RU BU WE TR UIL ST W TRU BU W TR UIL ST W TRU BU W TR UIL ST W TRU B BU US D T E ST ILD BU US D T E ST ILD E BU US D T E ST ILD E BU US D T E ST ILD T W RU BU WE TR IL T W RU BU WE TR IL T W RU BU WE TR IL T W RU BU W US T E ST ILD B US D T E ST ILD B U D ST ILD B U D ST ILD E E T S T S U U U B B T R W T T R W T T R B W T T R B W D WE UST UIL E B RU ILD WE UST UIL E B RU ILD WE UST UIL E B RU ILD WE US UIL E B T TR B W D UI ST TR B W D T UI ST TR B W D T U ST TR B T W D T U T U I U I U UI UST ILD E B RUS LD T WE UST ILD E B RU LD WE UST ILD E B RU LD WE UST UILD E B RU LD W T UI T R B W T UI ST TR B W T U ST TR B W T U ST I ST TR E B RU LD WE UST UILD E B RU LD WE UST UILD E B RU LD WE UST UIL E B RU ILD W US UIL ST TRU BU W T UI ST TRU BU W T UI ST TRU BU W D T UI ST TR ILD E B T W D WE ST IL E B RU LD WE ST IL E B RU LD WE ST IL E B RU LD WE D D D T TR UIL E B RU BU WE TR UIL ST W TRU BU W TR UIL ST W TRU BU W TR UIL ST W TRU B TR US D T UI ST ILD B US D T E ST ILD E B US D T E ST ILD E B US D T E ST US T W RU LD W TR UIL T W RU BU W T UIL T RU BU W T UIL T RU BU W US T W E ST TR E B US D T E ST ILD E B RU D WE ST ILD E B RU D WE ST ILD BU W US UI T RU BU W T UI ST TR BU W T UI ST TR BU W T T E E WE BU ILD E B T W LD WE ST ILD E B RU LD WE UST ILD E B RU LD WE UST IL E B BU B IL UI E TR B W T UI ST TR B W T U ST TR B W D T U T U I RU ILD ILD D T RU LD BU UST UILD E B RU LD WE UST UILD E B RU LD WE UST UIL E B RU I ST TR T RU ST TRU ILD W T UI ST TRU BU W T UI ST TRU BU W D T UI ST BU W US RU ST WE ST TR E B RU LD WE ST IL E B RU LD WE ST IL E B RU LD ILD E B T W ST WE BU W US UI ST TR BU W D T UI ST TR BU W D T UI ST TR W T UIL E WE BU ILD E B T W LD WE UST ILD E B RU LD WE UST IL E B RU LD WE E RU D BU B IL T U E TR B W T U ST TR B W D T U ST TR B BU S T IL U D R IL B U U ILD W U U ILD W U R R E E D I I T I R S S U U TR IL W U D LD TR S T I T LD B US T E T LD B US T E ST US D T E ST TR TR US T W RU LD W T UIL T RU BU W T UIL T RU BU W R W R ILD T W RU BU WE UST US T W E ST TRU E BU US D T E ST ILD E BU US D T E ST ILD S I E BU W S IL T RU BU W T I T RU BU T E T LD B W T Seestrasse 72 b, CH ‐ 6052 Hergiswil (NW) Tel. + 41 (41) 630 42 20 | info@rencons.ch | www.rencons.ch

RENAISSANCE Construction - INFRASTRUKTUR: Untertagebau | Kraftwerksbau | Bahnbau

T

TR E B T W D BU WE W E B UI WE ST LD W US UI WE TRU ILD W US UI W US UIL E TRU ILD BU E B UI LD BU WE TR E B T W LD BU ST TR E B T LD T E T D BU S T IL U LD TR IL B U U BU W T I T RU D IL T U D U ST IL E B RU ILD WE UST UIL D ILD E B RU LD WE ST TR D T RU ST TR ILD W D T UI ST TR BU U U S T L TR UIL T W RU BU WE UST RUS ST W WE ST TR E B RUS D T WE ST ILD US D T E ST ILD B W T W E BU W US UIL T RU BU BU ILD E B T W D WE ST IL T RU BU W T UIL E E D W S IL E RU D BU B I T E T D BU S T IL U LD TR UIL E B RU BU BU W T I T RU D IL T U D U ST IL ILD E B RU LD WE ST TR D T RU ST TR ILD W D US S T E TR UIL T W RU BU WE UST RUS ST T US D T E ST ILD B W T W T RU BU W T UIL E W S IL E RU D BU E E T D BU S T IL BU W T I T RU D ILD E B RU LD WE ST S T TR UIL T W RU BU US D T E ST ILD T RU BU W S IL E T D BU ILD

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RENAISSANCE CONSTRUCTION

The RENAISSANCE Group was founded in 1993 in St. Petersburg and has delivered more than 430 turnkey projects with more than seven million square feet of enclosed space and is one of the leading construction companies in Europe. The current order backlog exceeds five billion dollars with a workforce of over 30’000 employees in eleven countries.

The focus of the RENAISSANCE is the construction of shopping centers, office buildings, hotels, chemical and petrochemical plants as well as hydro and wind power plants. The youngest division of the RENAISSANCE Group

is the infrastructure sector (mining, railway construction).

The RENAISSANCE Construction GmbH Hergiswil with about 130 employees, has been instrumental participating since 2001 in the construction of the longest railway tunnel in the world – the Gotthard Base Tunnel in Switzerland, and since 2008 also the railway equipment of this century project is running significantly.This provides the basis for the development in the area of infrastructure.

E. info@rencons.ch www.rencons.ch

BE Monthly | 59

Management and design Offering integrated engineering services to the most demanding and qualified clients who are acutely aware of the need for careful design and planning to complete the work within budget and on time.

T. +390471099521 E. info@3m-engineering.it www.3m-engineering.it

Seen

Contact us today and put your company in the spotlight!

vincent@bus-ex.com 60 | BE Monthly

of the other two. Connecting tunnels link the main tubes ever 330 metres, providing a high level of accessibility-and security.

The exploration tunnel will be valuable as a drainage and service asset (it lies twelve metres below the main tunnels) once the other two have been built using a combination of blasting and tunnel boring, depending on circumstances, though 70 percent will be excavated using TBMs. The main reason for driving a pilot tunnel was a geological one, Bergmeister explains. “Though we know a lot about the geology of the Alps, it was impossible to know exactly what rock conditions we would encounter. The tunnel has to cross something called the periadriatic fault, or seam: we know it is there but at that depth we don’t know exactly how it behaves.�

BBT-SE

“We have turned to the most innovative technologies and materials in designing this tunnel for a lifetime of more than 200 years!”

The exploratory tunnel is important to obtain further information about the inside of the mountain and therefore plan the construction of the main tubes with a higher degree of precision, he emphasises. “Such geological information as we started with was based on preliminary studies that have been going on for decades. More than 34 kilometres of drilling was done, in which over 27,000 cubic metres of stone were removed

from the mountain, to evaluate the rock mass along the planned tunnel route.”

During construction the spoil from the main tunnels will be removed through the exploratory tunnel, speeding up the latter stages considerably. “We are removing all the spoil from the main tunnels through the exploratory: it is moved all the way to the discharge site using a series of conveyors and no trucking will be involved,” says

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BBT-SE Bergmeister. In all there will be 17 million cubic feet of spoil to be disposed of, and this will come out through four access tunnels, of which the ones nearest the Austrian and Italian ends are already complete. The 1.3 kilometre Ampass access tunnel and the 2.4 kilometre Ahrental access, together with about a quarter of the exploratory tunnel on the Austrian side, have been completed.

The Wolf access tunnel was the last to be put out for tender for an estimated contract sum of 140 million earlier this year, and is now progressing well. This is also the longest, at four kilometres.

Currently, completion of the exploratory tunnel early in 2014 is a priority. TBMs capable of advancing 30 metres a day stabilise the ground as they go using piles and special grouting, and the tunnel is lined with 20 centimetre thick segments manufactured off site using a steam system that accelerates setting. The cutters mounted on the face of the TBM cut the rock into chips which go into a hopper that drops them onto a conveyor belt at speeds up to 700 cubic metres per hour.

The Brenner Base Tunnel will change the face of Europe’s infrastructure forever, says Konrad Bergmeister. “We have turned to the most innovative technologies and materials in designing this tunnel for a lifetime of more than 200 years!� he says. As a world authority in concrete engineering, his word is to be believed.

For more information about BBT-SE visit: www.bbt-se.com

BE Monthly | 63

64 | BE Monthly

DRS Construction & Project Management

Constructing Chile’s future The construction industry in Chile has been booming in recent years as the country experiences remarkable economic growth. DRS Construction & Project Management is one of the main players within the construction sector in this South American nation

written by: Will Daynes research by: Louisa Adcock

BE Monthly | 65

E

ver since it was founded in 1989, DRS have worked tirelessly to forge a level of trust between itself and its customers based on a combination of experience, technical capacity and reliability. From its headquarters in Santiago, Chile, the company delivers comprehensive building projects services and works that enables it to successfully manage a project from its initial design stages right through to commissioning. Specialising in construction projects, DRS has also become expert when it comes to ensuring energy efficiency and environmental protection.

“Over the course of nearly 25 years,” explains Administration and Finance Manager, José Manuel del Río, “we have steadily increased our market share, primarily in the construction sector from which we originated. At the same time we have invested considerable effort into developing our service offering to cater for other major industries. This has led to a situation where today we have clients operating in fields including telecommunications and the energy sector, and where we are now ourselves looking at mining related opportunities.”

For more than two decades DRS has married its technical capabilities and state-ofthe-art equipment in order to expertly advise its clients on ways of creating the utmost added value to their projects, whilst always remaining flexible to their changing needs.

Such qualities have led to the company today being responsible for implementing more than 3,000 projects in a wide range of fields, which have been estimated as being worth a total value of some US$7,000 million.

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DRS Construction & Project Management

OUR WORK IS HERE TO STAY

Costanera Center, SantiagoChile 300 mts height

From the most seismically active nation, we provide world-class comprehensive seismic engineering expertise to design the future skyline Structural Engineering/Seismic Engineering/Wind Engineering/Value Engineering/Peer Review/ Design of Seismic Protection Systems/Complex Engineering Consultancy/ Non - Linear Modeling and Analisys/ Building Information Modeling Consultancy/ Structural Field Inspection/Early Structural Cost Estimate and Cost Monitoring

/www.renelagos.com

DRS Construction & Project Management During the course of every project DRS implements a total management strategy that focuses on controlling nu m e r o u s v a r i a bl e s throughout a project’s life, including budget, quality, timeliness and safety.

Quality and innovation meanwhile remain central pillars of DRS’ culture, with the company’s quality management system certified under ISO 9001 regulations.

“We believe that there are three main pillars to our business that have helped contribute to

Vineyard wineries

our success over the years,” del Río continues.

“The first of these is innovation. It has always been the case that we are always looking for ways of using new technology and internal

RENE LAGOS ENGINEERS Rene Lagos Engineers is an international engineering consultancy firm with the head office in Santiago of Chile and regional offices in Miami, Lima, Dubai and Beijing.

The firm provides a full range of design and engineering services for major projects internationally.

Rene Lagos Engineers bases its business strategy in time responsiveness, design creativity and technical expertise in optimizing design in order to reduce costs and simplify construction procedures, as key factor building up a long term and trustful relationship with clients. We invest in our people in the same way that they invest in us, by providing opportunities

to learn, to research and develop in an outstanding work environment.

Projects include: • Hotels • High-rise buildings • Residential buildings • Retail • Mixed-use developments • Convention centers • Entertainment facilities • Special structures • Schools and health care facilities With 36 years of experience the firm has grown steadily both in magnitude of projects designed and the ability to develop and maintain an outstanding staff. Our expert engineers provide our customers with value engineered solutions to meet individual structural requirements towards sustainable design on every project, following the firm’s permanent commitment to exceed expectations. www.renelagos.com

BE Monthly | 69

processes to better our service offering and our productivity.” It is this attitude that contributed greatly to DRS being presented with the Innovation Prize by the Chilean Construction Association (CCHC) in 2012.

“The second pillar,” del Río states, “is flexibility, and not just as it relates to our ability to successfully enter into new markets, but the way we can quickly and effectively cater for our customers’ changing needs. Last, but certainly not least, our success is a result of the work of our people. We realise they are our most important asset and as such we constantly put a great deal of focus on their development and training. One of the ways we do so is through an area of our business

Installation of antenna in the Andes Mountains

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we call the DRS University. It is here that our most experienced employees are able to pass on their knowledge and experience to others within the organisation.”

Chile as a whole has been one of a select few countries to have experience relatively sustained growth in recent years, growing close to six percent in GDP terms in the last two years and with 2013 expected to see the country recording a further growth rate of more than four percent. These events have helped create a boom period for the construction sector, meanwhile, with interest rates now falling an economic climate is emerging that is steadily enticing foreign investment into the region.

DRS Construction & Project Management

“We have been supporting the country’s growth in our own way by contributing to a host of major projects in crucial economic areas” “For our part we have been supporting the country’s growth in our own way by contributing to a host of major projects in crucial economic areas, from hospitals and schools to data centres, the latter of which is a highly skilled area of expertise in which we have completed some 37,000 square metres of projects to date,” del Río says.

Indeed, across Chile examples of DRS’ work and expertise can be found throughout a number of industry sectors, from retail and educational buildings to industrial and health care facilities. The latter is obviously one area of great importance for Chile and its population, and DRS have played a hugely important role in taking numerous health care facilities from concept to creation.

Among its projects in this field are the Avansalud Clinic and the Tabancura Clinic, both in Santiago. The former was an expansion project of considerable scale and involved adding a further five underground levels and eight stories to the buildings existing two underground floors and six stories. With the expansion increasing the total area of the complex by 8,665 square metres to 27,229 square metres, the company was also required to carry out remodelling work to the existing building.

Elsewhere, DRS’ work is also helping contribute towards Chile’s future growth through the various services it provides to educational projects across the country.

Beneficiaries of these services include the Catholic University of Chile, Institute Inacap, and schools such as San Benito and Mount Tabor.

When it comes to projects in the retail sector, DRS’ multi-disciplined team has been

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“DRS has also ventured into another area of expertise, that being the restoration of historical buildings�

W Hotel in Santiago

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DRS Construction & Project Management credited with assisting in the development of more than 800 commercial undertakings.

These include projects on behalf of major clients such as D-&-S Saitec (Walmart Chile), Cencosud, Ripley, Mall Plaza and Sodimac, among many others. Espacio Urbano Viña Centro, the shopping mall brand from Walmart, was a project that saw the company involved in the management of five levels of the building and the creation of two underground car parking facilities, which saw DRS’ team working across nearly 85,000 square metres of space.

Aside from retail, residential, educational and health projects, DRS has also ventured into another area of expertise, that being the restoration of historical buildings, a line of work that is much newer to this part of the world than in Europe for instance.

Nevertheless, it is one that is of increasing importance and one that DRS hopes to see continue to grow as a way of maintaining the past two-centuries of Chile’s architecture and its cultural patrimony.

When asked for his take on Chile’s ability to continue its remarkable path of expansion in the coming years, del Río highlights the fact that he sees the country’s growth as now exceeding the infrastructure present to support it. “As the country has prospered immigration rates have risen and thus the

Magdalena building in Santiago

population of Chile is expanding. This is now driving the demand for all manner of services, from supermarkets to schools and hospitals.

It also means that there are increasing opportunities for us to become involved in large infrastructure projects including airports, ports and highways. Meanwhile, we will continue to look beyond Chile into places where we feel we can develop our strengths and accomplish in other South American countries what we have here at home.”

For more information about DRS Construction & Project Management visit: www.drs.cl

BE Monthly | 73

The City of Tshwane

Tshwane on the move The City of Tshwane is fast-tracking a new public transport policy aimed at social transformation as much as traffic decongestion

written by: john o’hanlon research by: james boyle

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A

city grows up over decades, an expression of the society that creates it. As society changes, the city becomes a repository of its own past, reflecting layers of its history. So Rome is a modern capital and at the same time a museum of a past civilisation. Not ideal for cars, but they live with it! But some of South Africa’s urban legacy is not so worthy of preservation, and they don’t need to live with it.

A case in point is that the major conurbations are still largely laid out along pre-1994 lines, when the major centres of employment were situated downtown in what is called the Central Business District (CBD), with the middle class mainly white population in conveniently placed suburbs.

The majority of the workers had to live in townships at arm’s length, and well outside of the ‘better’ parts of the city.

South Africa’s transformation took place a mere 20 years ago, as we are painfully reminded in the immediate aftermath of the death of its architect Nelson Mandela.

Though progress has been made it has been neither practicable nor affordable to rebuild the cities from scratch and a number of legacy problems mean that too many of the previously disadvantaged remain disadvantaged.

On top of the congestion that rising GDP has delivered, as it has everywhere, too many of the working population have to make a long and difficult journey to and from their place of work.

The City of Tshwane is one of the worst affected. It was formed in 2000 from the amalgamation of 13 local councils including

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The City of Tshwane

amongst others Pretoria, Centurion and Ga-Rankuwa. Its population today stands at about 2.9 million compared to 2001 when it was 2.1 million.

In 2011, the City of Tshwane announced that it would develop an Integrated Rapid Public Transport (IRTPN) through the provision of a high quality and affordable public transport system. The plan focuses on high-frequency corridors where passengers are transported on a dedicated lane where public transport should enjoy priority over private transport. The plan will also provide Tshwane with a permanent and recognisable public transport framework consisting of radial and circular routes. Bus Rapid Transit (BRT) was identified as the appropriate mode of transport to lead the transformation of public transport in the city.

The target market for A Re Yeng is everyone living in the City of Tshwane, and those visiting too. The present transport options are not integrated, says A Re Yeng’s Executive Project Leader (EPL) Lungile Madlala. “There is a government subsidised bus system but in the City of Tshwane there are only two subsidised operators, serving limited routes.”

For the rest, she says, people rely on a plethora of minibus operators. There is no integration: “We need to integrate all modes of transport

Signing the MOU: City

including rail, with universal access so you don’t have to walk far from your house to link with a service that will take you where you need to go.”

Ms Madlala and her team visited cities all over the world before concluding that South America had the closest model to South Africa’s, to use as a benchmark for Tshwane’s own BRT. Over the next three years the city is expecting to spend R3.6

“We need to integrate all modes of transport including rail, with universal access” 78 | BE Monthly

The City of Tshwane

y of Tshwane’s Mayor, Cllr Kgosientso Ramokgopa (centre) with representatives of Tshwane Regional Taxi Council

billion implementing the Though providing the new system. This represents outlying townships with the cost of building new affordable and reliable sections of bus lanes, transport, the system is stations and depots, around designed with all sections Of Tshwane’s buses will 154 new vehicles, and of society in mind, she be powered by CNG supporting infrastructure emphasises. A key benefit will be to provide car owners such as the intelligent with a realistic alternative, transport management system, CCV cameras, and the upgrading reducing inner city congestion. Public of the entire traffic light system that will transport will take priority, she promises, give priority to BRT buses. In line with with non-motorised transport options Tshwane’s Sustainable Energy and Climate facilitated by providing cycle tracks and Change (SEED) programme all the buses walkways designed around the access points procured will conform to the highest to the system. emissions standard Euro 4, and 30 percent So what will happen to the many private of them will be powered by Compressed bus and taxi operators once the A Re Yeng Natural Gas (CNG). becomes operational? Far from losing their

30%

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livelihood, they will be brought into the system, empowered and given a boost. The industry has survived without government subsidies: now it has new opportunities.

When the city and the Greater Tshwane Regional Taxi Council (GTRTC) and Transport Operators Peace Initiators Conglomerated Associations (TOPICA) signed a Memorandum of Agreement (MOA) in June the chairman of GTRTC Mr Abner Tsebe gave his full support, saying: “The mayor wants to see billionaires created out of this project. We can actually own and run the BRT buses ourselves if we work together and are united.” It will be a bit like a co-operative, says Lungile Madlala: “They will come in and have shares in the

80 | BE Monthly

Bus Operating Company. That way they will all have assets in a new business that is more economically viable.”

Clearly the present private operators will have to commit or leave the business, taking a payoff from the operating company – competition on the A Re Yeng routes would not fit the new business model. However a high level of buy-in is expected. Upskilling, training, a regular income and benefits are among the many new rights that the scheme will bring to its operators.

As well as stimulating existing employment opportunities BRT will generate approximately 12,000 new jobs including those related to construction.

The City of Tshwane

“Former taxi and bus operators will all have assets in a new business that is more economically viable” The first phase of construction is already in full swing, with some sections of road and one station building already completed at Arcadia Street, Hatfield. This inception phase, stretching seven kilometres from Nana Sita Street (formerly Skinner Street) in the CBD to the suburb of Hatfield, will be complete and operational in 2014, says

Madlala. “Then by the end of 2015 we will be working on a bigger scheme that will run from Rainbow Junction (Wonderboom Station), which a new urban core to the north of the city, to the CBD. In 2016 we plan to link with the Menlyn Node, which is another major development project.”

The A Re Yeng system is far more than merely a transport project, Lungile Madlala emphasises. It will contribute significantly to building a national democratic society.

Reduced travel times between home, work, retail and social destinations and improvements in traffic congestion and road safety are just a start. “It will stimulate areas that are quite depressed. We will encourage development in the region of the stations, and these areas will be kept safe and secure.

We want disabled people, single women, mothers and children all to feel safe at all times,” she says. The fact that CCTV cameras will monitor the entire system should make people feel more confident, and a reduction in crime will certainly be another side effect of A Re Yeng.

For more information about The City of Tshwane visit: www.tshwane.gov.za

BE Monthly | 81

industry focus: gold mining

Resp

As the largest inte the world, Rand responsibili

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Rand Refinery

ponsible gold

egrated precious metals refining and smelting complex in d Refinery founded at Germiston in 1920, carries a great ity to the industry and is an ambassador for African gold

written by: John O’Hanlon research by: David Brogan

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industry focus: gold mining

Rand Refinery

H

oward Craig was brought in from the oil and gas industry over three years ago: his mission to breathe new life into one of South Africa’s key businesses.

Rand Refinery, since 1967 the sole producer of Krugerrands and gold bars destined for the bullion banks of the world along with gold bars, is the pipeline to the market for the greater part of Africa’s gold doré – the semi pure product from the mines. Two of the largest gold mining companies in the world AngloGold Ashanti and Gold Fields between them own over 80 percent of the company: the remaining shares are held

by DRDGOLD and Harmony.

After 90 years the company found itself with sound but outdated processes and equipment, and faced new realities as well as changes in the global market for precious metals and the products made from them.

“The first thing that needed doing,” he says, “was to establish where the company was headed, then decide what should be done to get there.” It was clearly important to make the operations sustainable: much of the technology used in the refinery itself, the smelter, the mint and the assaying operations was outdated. The shareholders were keen to invest in automation, and the brand was ripe for a makeover.

It was, he says, every CEO’s dream, and today his relish for the task remains palpable. The intervening years have been spent putting this policy into practice, acquiring the best available technology and at the same time matching the company’s skills levels, enabling systems and culture to create a new brand identity that,

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industry focus: gold mining

while retaining the core competence of refining, would be ‘instantly recognisable as a symbol of infinite quality, sophisticated simplicity and unquestionable integrity.’

Though the market for gold and precious metals has shifted eastward in recent years, it is still centred in London, where in May this year alone gold to a value of $39.8 billion was traded, and $3.28 billion of silver. This trade is handled by the London Bullion

Marketing Association (LBMA), with which Rand Refinery has been accredited since its inception in 1920. In 2004, that relationship was elevated when Rand Refinery was appointed one of five referees that monitor LBMA’s Good Delivery standard introduced in 2001, and authorise new refineries to trade, set the standards for the market and evaluate them technically.

There are just five Good Delivery referees

“Wherever you look the mining houses are investing large sums in social, health and education programmes” 86 | BE Monthly

Rand Refinery

2004 Year Rand Refinery was appointed a LMBA Good Delivery Referee

in the world and Rand Refinery is the only one in the southern hemisphere. It was a huge testament to the standing of the company and its reputation in the industry. “Being an LBMA Referee is something we cherish,” says Craig, “but it brings with it a massive responsibility. We have to make sure our own technical standards are at the very top of the tree, and always set the benchmark for honesty and integrity in the industry. We look on that reputation as a gift from our former employees and management over the years, and we nurture that heritage and aim to pass it down to the next generation.”

Till last year only the bullion banks could be full members of LBMA; refineries had associate membership. However in May 2012 the five referee companies were admitted as full members, a singular honour.

He talks about the responsibility of LBMA membership, and it is true that a lot of pro bono work and travel is involved. That is not a problem for Howard Craig. One of the key roles of the referees has been to develop with the LBMA a set of guidelines on responsible gold. Since January 2012, the LBMA requires that all Good Delivery gold refiners comply with the LBMA Responsible Gold Guidance, formulated to ensure that conflict gold, or

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industry focus: gold mining

gold produced using unsafe practices, child labour or human rights abuses did not enter the supply chain. As the processor of up to 80 percent of all the gold mined in Africa Rand Refinery took a proactive part in the process. “We got in touch with the World Gold Council to understand the miners’ point of view, the OECD which had published its own guidelines, and, for the downstream trade, the Responsible Jewellery Council.”

There’s an element of self interest here, he admits. The concept of conflict gold has its roots in Sierra Leone and the DRC, but it is vital that the whole of African doré production is not stigmatised. Rand Refinery has long had its own systems to monitor its customers and track every batch they send, using third party auditors to check its own processes. “We can therefore not only say that we have met the LBMA Responsible Gold

“We are replacing our silver circuit with a completely new one, using best in class technology always with a high degree of automation”

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Rand Refinery

Guidance but that we can ourselves certify the origin of every ounce of gold we receive and that we have followed the whole train of custody from source to our refinery.”

Neither is it enough to show that African gold is overwhelmingly ‘responsible’ as defined by the guidelines. By and large these certify where it has not transgressed. He is keen to tell the untold story that presents gold production across the continent as a force for good. “Wherever you look the mining houses are investing large sums in social, health and education programmes – they are in fact investing in Africa’s children. The fight against malaria and HIV/ AIDS, deficiency diseases and poor hygiene

goes hand in hand with school building, sanitation and clean water programmes and local agriculture schemes to paint a positive picture that opposes the cases of exploitation that do undoubtedly still occur.”

Turning the role of policeman into a marketing opportunity was a short step. In May this year Rand Refinery launched its RandPure brand to augment the finished products it makes at the refinery. Not only are these products certified under the WGC and LBMA guidelines as being traceable and free from conflict gold, but they are also certified as coming from virgin gold doré. That means they do not contain any recycled or scrap gold whose provenance is

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industry focus: gold mining

harder to trace. That pleases the downstream market, and the miners like it too, because it ensures that their WGC certified conflict free bars don’t get mixed up with ‘grey’ gold at any point down the line – in other words the logistics chain is as responsible as the production and refining streams.

The launch of RandPure was part of a broader strategy, Craig explains. “One of the things we quickly realised when looking at our strategy after my arrival was that Rand Refinery had not launched any new products in about ten years – maybe longer. We were missing some key classes of

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product. One was minted products – the high end investment bars that normally come, beautifully designed and stamped, in fine packaging with tamper-evident seals. We also said there was an opportunity in jewellery products, and both these types of product can be branded RandPure.”

The company invested in setting up a minted product line which can mint both bars from 100 down to two grammes as well as coins. It then started to set up a global distributor network to ensure there were robust marketing channels for these products.

To penetrate the European market Rand

Rand Refinery

“Rand Refinery’s RandPure brand is the only gold product that can claim complete knowledge of the source doré through to the fabricated product” Refinery set up an exclusive distributorship with a Geneva company called International Gold Trust (IGT). The distributor’s own account is a measure of Rand Refinery’s standing. “This exclusive appointment provides IGT with the world’s highest quality

gold ethically sourced and provided by a refiner whose integrity and market standing is unprecedented. Rand Refinery’s RandPure brand is the only gold product that can claim complete knowledge of the source doré through to the fabricated product. At no point in time does the metal leave the control of Rand Refinery giving a unique product to the consumer – responsible gold sourced from the earth, not from recycled products.”

Also in May Rand Refinery appointed Dallas-based Dillon Gage Metals as its exclusive distributor in North America.

For the minted products, a trading team was set up in Singapore two years ago to explore the very large market that exists for gold products in India, China and East Asia. To be able to supply the anticipated demand this will generate, new equipment for producing minted products has been installed, and cast bar production lines at Germiston have been modernised and its level of automation increased using state of the art robotics.

Alongside its launch of the RandPure brand and the new range of options for customers to invest in gold came the announcement in May of a jewellery range produced in partnership with South Africa’s largest jewellery manufacturer OroAfrica. Since RandPure can only apply to gold manufactured under

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industry focus: gold mining

Rand Refinery direct control of Rand Refinery, OroAfrica set up its own facility within the refinery. The range, starting with rings and sold under a new brand name, Absolute, are expected to sell very well in the markets where it is available, currently South Africa, Canada and the USA and Hong Kong – and customers can be confident they are buying certified virgin gold, responsibly mined and containing no scrap of untraceable material.

Investment will continue till all parts of the refinery have been thoroughly modernised.

“We are replacing our furnaces shortly, and replacing our silver circuit with a completely new one, using best in class technology always with a high degree of automation.”

The refinery’s smelter, he adds, will be a major driver for growth in the years ahead.

With an annual capacity of 1,500 tons, it uses a pyro-metallurgical process to concentrate low grade materials into a semi concentrated product that is further purified at the main refinery. Additionally it has a recently added copper circuit that can produce up to 500 tpa of copper cathode from the scrap feed, much of it from Asia. To streamline the process Rand Refinery has now set up an assaying facility in Singapore, to give its Asian customer a same-day service and much faster payment. In the coming five years, he hopes, local in-country pre-treatment facilities could speed up the supply of recycled gold and silver to the main refinery.

For more information about Rand Refinery visit: www.randrefinery.com

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industry focus: gold mining

Randgold Resources

Reaping Africa’s golden rewards As its third quarter report for 2013 highlights, Randgold Resources’ African discoveries continue to surprise and create huge value for their stakeholders

written by: Will Daynes research by: Jeff Abbott & Robert Hodgson

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industry focus: gold mining

Randgold practises a non-discrimination policy, striving to recruit and retain the best people and draws on talent from the populations of the countries in which it operates

Randgold Resources

I

f any proof were needed to support the belief that Africa has become one of the world’s epicentres for mining success over the last decade, one arguably needs to look no further than Randgold Resources. An Africa-focused gold mining and exploration company, it has been the architect behind a host of major discoveries to date in Mali, the Côte d’Ivoire, Senegal and the Democratic Republic of Congo (DRC).

Included among said discoveries are the company’s 7.5 million ounce Morila deposit in southern Mali; the seven million ounce Yalea deposit and the 5.5 million ounce Gounkoto deposit, both in western Mali; the four million ounce Tongon deposit in the Côte d’Ivoire and the three million ounce Massawa deposit in eastern Senegal.

The Morila mine was very much Randgold’s first success story. Financed and built by the company it has gone on to produce more than six million ounces of gold since October 2000, distributing more than $2 billion to its stakeholders. More recently, the company’s Tongon mine in Côte d’Ivoire poured its first gold in November 2010, while its Gounkoto mine, south of Loulo, Mali, delivered first ore to the Loulo plant in June 2011 and paid its first dividends to shareholders in mid-2012.

Today Loulo-Gounkoto complex is the flagship of the company and it was its strong performance in the three months to the end of September 2013 that powered Randgold to an 80 percent quarter on quarter profit increase, a feat made all the more impressive by the fact that the company experience a three percent drop in the average gold price received during this period.

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Randgold Resources It was here that an increase in the grade of product, Strategnos was established in 1999, and is synonymous coupled with a substantial with sound Strategic thinking teamed with a comprehensive improvement in recoveries, Understanding and Knowledge of Business Practice. helped deliver Randgold a 36 Strategnos occupies a niche Market, improving Business percent increase in production and Supply Chain Management, by employing the Expertise to a record 165,146 ounces of a highly skilled Team of Consultants and Analysts.The name Strategnos merges the two Greek words, Strategia over the previous quarter. and Gnosi, meaning Strategy and Knowledge respectively; The improvement in the hence our fundamental Foundation - Building Business recovery rate was achieved through Strategy and Knowledge. through the commissioning www.strategnos.com of a milling circuit recycle crusher and a new oxygen plant. Other projects completed during the quarter included the conversion of the mine’s generators to heavy fuel oil and the expansion of the carbon in leach (CIL) tank.

The quarter also saw the early commissioning of the company’s Kibali project in the DRC, meaning that 2013 will be remembered as the year that the Kibali project achieved its first gold pour and commenced commercial production. It was in 2009 that the company acquired a 45 percent interest in Kibali, a project that stands at 10.9 million ounces of mineral reserves and at the time was recognised as one of the largest

strategnos

550,000 ounces

Randgold’s 2014 production target for the Kibali project Nzoro River hydropower sources for Kibali

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industry focus: gold mining

As part of the Kibali project, Randgold has funded and managed the upgrade of the main access route between the towns of Doko and Aru on the Ugandan border

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undeveloped gold deposits in Africa.

As well as coming online well ahead of schedule, Kibali is now expected to exceed its 30,000 ounce production forecast for the fourth quarter of 2013 and it is well on the way to meeting Randgold’s target of 550,000 ounces for 2014. Today the company is busy ramping the project up to full capacity on its plant’s oxide circuit, with the completion of the remaining plant and hydropower stations, and the commissioning of the sulphide circuit, scheduled for next year. Furthermore, the development of Kibali’s underground mine is progressing well and to schedule.

In Randgold’s third quarter statement, Chief executive Mark Bristow was keen to highlight that the successful start-up of the project represents a remarkable combination of geology, metallurgy, engineering and logistics, as well as negotiation and diplomacy.

“The Randgold team only moved on site in January 2010 and in less than four years it has built a world-class gold mine in one of Africa’s remotest regions, in the process more than doubling its reserves to 11.6 million ounces and increasing its resources to 21 million ounces. While doing this, we have also completed or progressed major performance-enhancing capital projects at Loulo-Gounkoto and Tongon.”

During the quarter, performance at the aforementioned Tongon asset improved in line with the company’s plan, with mill throughput rising significantly thanks to the commissioning of a new of related capital projects. The progress Randgold has made to date in 2013 at Tongon will continue into the fourth quarter during which time a further

Randgold Resources

Randgold is committed to providing the safest possible working environment for its employees

“As well as coming online well ahead of schedule, Kibali is now expected to exceed its 30,000 ounce production forecast for the fourth quarter of 2013” mill tonnage ramp-up is scheduled, alongside the commissioning of new crushers and a cyclone pump upgrade.

“Our focus now is on securing steady-state production at Kibali while completing the rest of the development, and on achieving the full benefit of the performanceenhancing projects at Loulo-Gounkoto and Tongon,” Bristow added in his third quarter statement. “We’re also still maintaining a strong emphasis on exploration, which has traditionally been the driver of Randgold’s

growth. At Kibali, where an upgrade of the underground mine plan has already delivered an interim increase in reserves, continued exploration points to a further upside, and in West Africa, our geologists are moving back into the field after the rainy season to follow up identified targets.”

For more information about Randgold Resources visit: www.randgoldresources.com

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industry focus: gold mining

Shanta Gold

gold from Tanzania In the present condition of the gold market, the smart money is moving from long term development projects to those that promise profit in the near future: Shanta Gold is delivering growing cash flow and has development assets as well, within one of the most stable jurisdictions in Africa

written by: John O’Hanlon research by: Jeff Abbott & Vincent Kielty

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industry focus: gold mining

Bauhenia Creek pit looking southwest

Shanta Gold

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n the present climate exploration companies are really struggling to secure investment to complete drilling programmes and progress to a defined resource they can either sell on or start to develop. But companies that have already moved into production and can point to reliable cash flow are in an enviable position.

Shanta Gold is such a company. The AIMlisted emerging gold producer has a lot going for it including a mine that poured its first gold in August 2012, two extensive and open resources at that location, exploration rights over extensive targets in an area long known to contain high grade gold deposits and a further, separate resource at an advanced stage of development.

Mike Houston, Shanta Gold’s CEO is a South African and former CEO and Chairman of Zimplats, the Zimbabwe platinum mining company. Since his appointment in October 2012, he has been based in Dar es Salaam, the commercial centre of Tanzania. Tanzania is one of Africa’s most attractive countries, having enjoyed over half a century undisturbed by conflict, either internal or external, since its independence in 1961. That stability is at last attracting inward investment that will enable it to benefit from its abundant natural resources, of which gold is just one.

When he stepped in to the job, the processing plant at the New Luika mine on the Lupa goldfield had just started to operate, but throughput was disappointing, and a primary focus in the last year has been to improve its performance and get the company into positive cash flow. This Mike has in large measure achieved, with production ramping

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industry focus: gold mining

ORYX OIL COMPANY LIMITED Oryx Energies has been supplying the Shanta Gold Mine at New Luika with diesel for its generators, since the mine’s inception.

This fuel is the mine’s lifeblood and requires the fuel supplier to reliably supply products to specification, on time and in full, to avoid any interruption in operations.

New Luika is a remote site, with road conditions that make transport a challenge.

Oryx Energies’ affiliate in Tanzania, Oryx Oil Tanzania, has taken on this challenge and, in collaboration with the mine, has ensured that mining operations do not run dry.

Even during the recent transport strike, Oryx Energies ensured that the New Luika mine received enough fuel to keep operations going.

With the greater emphasis on cost reduction in many mining companies due to the dip in the gold price, a significant operational

saving for Shanta Gold Mine was identified by changing from Diesel to Heavy Furnace Oil (HFO) for power generation. Oryx Oil Tanzania will be building a facility that will provide 400m3 of HFO storage capacity to fuel the generators on site. The fuel will be delivered from Dar es Salaam. “Partners” involved in this project will work closely together to ensure that this initiative is delivered on time and that Shanta Gold can reap the benefits.

Oryx Energies in Tanzania provides an integrated energy platform that masters the value chain from product sourcing to storage and distribution. We are proud of the strong business relationship we have with Shanta Gold and wish Mike Houston and his team every success in the future. www.oryxenergies.com

Shanta Gold

Excavator at dusk

“Singida gives Shanta some important growth potential in what is a relatively untouched area” up from 6,000 ounces in the last quarter of 2012 to 11,800 in the first three months of this year and 14,600 in the second.

The Lupa goldfield is the second largest in Tanzania after the Lake Victoria goldfield. It produced more than 23 tonnes of gold during colonial times, and an unrecorded amount since independence. The New Saza Mine, closed in 1956, was the second largest preindependence gold producer in the country after the Geita Mine. Lupa has long been thought to be a high potential gold play

for the small to mid-sized producer, says Houston: “The bulk of Tanzania’s gold was coming from the northern goldfields at that time. But then Shanta started looking down in the Lupa area, found a number of attractive deposits and decided to build a small mine at the New Luika close to the eastern shore of Lake Rukwa and run a plant that would generate some cash flow. This would allow Shanta to tackle what was considered its premier resource at Singida in the central part of the country.”

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Shanta Gold Things changed a little when it was found that the pit was open at depth, with the potential of developing an underground operation once the surface pit was exhausted, and also that it butted against a separate deposit with even greater potential. “In the process of expanding the Luika resource they found another deposit, Bauhinia Creek,” he explains. Bauhinia Creek is a highgrade resource, which he now describes as Shanta’s cornerstone asset, containing 4.4 million tonnes at 4.9 grammes per tonne (g/t), and of that 1.9 million tonnes runs at over seven grammes per tonne, he says.

Mining from Luika pit

The existing plant is ideally placed to process ore from both deposits, as they are no distance apart. However it will need to be expanded even after all the teething problems of the original plant are behind it. “We aim to have replaced the crushing circuit by the end

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Reliable results. Fast.

At Quality Laboratory Services, our dedicated staff are made up of teams of scientists, all experts in their respective fields and suitably equipped to analyse the mineral, chemical, hydro-biological and bacteriological determinants needed for research, process optimisation and quality control.

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Shanta Gold of the first quarter of 2014, Quality Laboratory Services and also upgrade the back At Quality Laboratory Services, we deliver quality laboratory end of the plant by changing services. From a small privately owned lab we have grown from the existing incineration into one that works around the clock every day of the week, process to an elution and processing over 9,000 samples a month with a turnaround electrowinning process.” The time of less than 24 hours. necessary equipment for the Strict procedures are in place to prevent contamination.

On receipt, incoming samples are given a coded reference $9 million plant expansion is number and results are emailed to you to ensure all on order, he adds. confidentiality. And finally, our turnaround times are During the year 2013 he designed to meet the most critical requirements, to give expects New Luika to have you peace of mind. produced more than 63,000 www.qualitylabs.co.za ounces of gold. Once the new crusher and elution plant are in place that will rise to an annual level of between 80,000 and 85,000 ounces. It will still be a relatively small gold mine, however Shanta is now sitting on 1,200 square kilometres of active licences and 1,300 square kilometres of applications in the Lupa goldfield, in which it now has a 100 percent interest since it bought out its former joint venture partner Great Basin Gold. “This is our ‘blue sky’ area. Lupa has numerous gold targets, whether colonial mines, artisanal workings, though at the moment we are focusing on a 20 kilometre radius round our plant.” Within that envelope intensive aeromagnetic and radiometric surveys have highlighted a number of targets that will be drilled out in the course of time.

“The Lupa goldfield is our ‘blue sky’ area”

Blast hole drill rig

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Shanta Gold Wisely he won’t make any predictions at present but AEL is a world-class mining services company with global the upside potential for the technologies that create wealth and growth in South plant is plain, given the highAfrican, African and selected international markets. grade gold deposits the Lupa Consisting of a capable team of leading explosives services, is known to contain. engineers and scientists, AEL has over a century of For the moment though expertise and knowledge in developing ground-breaking and innovative blasting solutions that contribute to the attention is on the known creation of infrastructures in countries throughout the and immediately accessible world. AEL unearths wealth by meticulously providing the deposits. On September 18 mining industry with carefully controlled energy. the company confirmed that www.aelminingservices.com its drilling programme had established mineralisation, at very high grades between 13 and 15 g/t, below the already established resources at Luika and Bauhinia Creek. Given the close proximity of the two it is probable that a single underground mine could be built, and as mentioned before, the plant is already there. At the end of the day the mine life, currently calculated at eleven years, could be extended to a couple of decades and beyond.

A little further out in both time and distance but with very exciting possibilities, is Shanta’s Singida deposit in the centre of Tanzania. Here the company holds eight prospecting licences covering around 240 square kilometres, and three mining licences over 30 square kilometres. “Singida gives Shanta some important growth potential in what is a relatively untouched area,” he says.

“Following substantial drilling and a feasibility study in 2011 that indicated production of about 450,000 ounces of gold over a ten year life of mine, a positive feasibility study has been commissioned and should be ready early in 2014. It is a typically vertical deposit giving the prospect for open pit exploitation over a Mill feed bin in production

AEL

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industry focus: gold mining

“Lupa has long been thought to be a high potential gold play for the small to mid-sized producer�

General view of the operations

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Shanta Gold period, then good potential for underground mining.”

In any mining project, investors and management alike depend on reliable analytical data and to ensure this Shanta partnered with Quality Laboratory Services of South Africa, which quickly set up a fully equipped laboratory at the New Luika minesite. Here rock samples can be accurately analysed and gold output assayed.

However QL’s work does not stop there. It has a key role in the hydrological and environmental studies that are another sine qua non to successful operation in almost any jurisdiction today – so the lab, a modular unit that can be delivered without delay to any remote area, is a one-stop facility that supports both the business case for the mine and its compliance issues too.

Tanzania is a very positive place to work, says Mike Houston, with cooperative authorities and a mining-friendly approach.

The country is investing in its infrastructure, and he is hopeful that it will succeed in providing a reliable main grid electricity supply to relatively remote places like the Lupa goldfield. If that could be achieved, it would open the door to a higher level of expansion: as things are, only the highest grade ores can be processed economically since all the power for the plant has to be generated on site using diesel or heavy fuel oil generators.

“Nevertheless, because Bauhinia Creek is so

Removing waste from Luika pit

high grade we are able to look at blending the mid-grade material of which there is a lot in this goldfield,” he points out.

He has brought Shanta Gold to a very different place in the course of year. Production has been stabilised, and set on a course that will see increasing cash flow. It is getting into a very stable position with a sound production process, good growth in output and a lot of blue sky potential, both by extending New Luika mine life and developing other licences.

Add to that the Singida project which should yield 45,000 ounces a year and Shanta has the realistic potential to increase production output substantially in a relatively short time frame, he believes.

For more information about Shanta Gold visit: www.shantagold.com

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industry focus: gold mining

Capitalising on a golden opportunity Led by the Pinos Altos Mine, Agnico-Eagle’s operations in Mexico’s Sierra Madre gold and silver belt continue to go from strength to strength

written by: Will Daynes research by: Peter Rowlston

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Agnico-Eagle: Pinos Altos Mine

industry focus: gold mining

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hough its mining history may span close to 500 years and counting, Mexico remains a major mineral exploration ground and retains its position amongst the world’s largest metal producers. The country’s rich geology and favourable regulations has made it an epicentre for mining activity, not least it is mountainous northern region, home to the legendary Sierra Madre gold and silver belt.

It is here, 220 kilometres west of Chihuahua, where one finds the Pinos Altos mine.

An open-pit and underground mining operation, Pinos Altos, including the nearby stand-alone Creston Mascota pit and heap leach operation, has proven and probable reserves of approximately 2.7 million ounces of gold and 74.4 million ounces of silver.

The mine itself was acquired in 2006, by Toronto-based company Agnico-Eagle, an international gold producer, with operating mines in Canada, Finland and Mexico.

Pinos Altos is Agnico-Eagle’s first mine in Mexico. Open pit mining began there in 2008 from the Santo Niño pit, and an underground mine beneath the pit began production in 2010. It poured its first gold in July 2009 from the Santo Niño heap leach, and in September from the mineral processing plant, achieving commercial production in November 2009.

Pinos Altos is expected to produce 159,000 ounces of gold as well as by-product silver in 2013, and to average 148,000 ounces of gold per year from 2014 to 2015, with a mine life through 2029. In addition, Creston Mascota is expected to pour 32,000 ounces of gold in 2013 and to average 54,000

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Pinos Altos mine site aerial

Agnico-Eagle: Pinos Altos Mine

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Agnico-Eagle: Pinos Altos Mine ounces of gold per year from 2014-2015, with an expected Founded in 1946, Zeta Group has dedicated over 60 years mine life to 2018. to marketing, storage, packaging, distribution and Surface mining at Pinos transport of LPG. Altos is carried out at the Our group consists of over 80 companies in Mexico and Santo Ni単o and Oberon abroad employing more than ten thousand people, we de Weber pits, and, in participate significantly in Peru, Guatemala, Belize, Costa Rica, El Salvador, Nicaragua and Spain. future, the San Eligio and We are committed to our customers providing an excellent El Apache pits. Mining is and safe service, 365 days a year 24 hours a day, we take by conventional open pit care of the smallest business to the largest enterprise. methods, using shovels and www.grupozeta.com trucks to remove around 17 million tonnes of ore and waste material each year.

Meanwhile, the underground mining method is sub-level stoping, used to extract ore from the Santo Ni単o, Cerro Colorado, Oberon de Weber and San Eligio deposits.

This ore is subsequently trucked to surface via a ramp system. At current maximum production, the underground mine can provide 3,000 tonnes of ore per day. Shaft-sinking began in 2012 to increase the underground production capacity to 4,500 tonnes per day.

This will better match the mine capacity to the mill, which is operating at more than the design of 4,000 tonnes per day.

Most of the ore from Pinos Altos is treated in a process plant, with the lower

Zeta Group

2.7 million Ounces of proven and probable gold reserves at Pinos Altos Pinos Altos tree nursery

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industry focus: gold mining

“Pinos Altos is expected to produce 159,000 ounces of gold as well as by-product silver in 2013�

Pinos Altos gold pour

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Agnico-Eagle: Pinos Altos Mine grade ore heap-leached. The conventional, 4,000-tonne per day process plant includes crushing, grinding, gravity concentration and agitated leaching, followed by countercurrent decantation. Gold and silver are recovered using the Merrill-Crowe method, and a refinery produces gold and silver dorĂŠ bars on site.

Metals recovery in the plant is estimated at 93 percent for gold and 50 percent for silver over the life of the mine.

A d d i t i o n a l l y, the Creston Mascota facility is responsible for mining an average of 4,000 tonnes of ore per day by employing the same surface mining method as that used at Pinos Altos. All the Creston Mascota ore is processed using heap-leaching. The heap leach facility is similar to the Pinos Altos facility, but here the precious metals are recovered by a small carbon column circuit. The gold and silver is stripped from the carbon in the Pinos Altos plant and then poured as dorĂŠ bars, with expected gold recoveries of 71 percent and 16 percent for silver.

In the third quarter of 2013, payable gold production from the Pinos Altos mill and heap leach pad totalled 43,736 ounces, at a total cash cost per ounce of $404. Additionally, silver production totalled 614,000 ounces in the quarter. The quarter saw Pinos Altos process some 661,000 tonnes of ore, with the

Pinos Altos employees

Pinos Altos mill averaging 5,458 tonnes per day, a quarterly record, while approximately 158,800 tonnes of ore was stacked on the Pinos Altos leach pad. The mine site costs in the quarter were $45 per tonne.

Taking these latest figures on-board, in the first nine months of 2013, payable gold production totalled 135,283 ounces from the mill and heap leach pad at a total cash cost per ounce of $402, and silver production totalled 1,849,000 ounces in the period. In those nine months Pinos Altos processed 2,052,000 tonnes of ore, with the mill averaging 5,244 tonnes per day, while approximately 620,900 tonnes of ore was stacked on the leach pad.

This year has also seen operations at Creston Mascota resume, in April to be

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industry focus: gold mining

Pinos Altos underground drilling

Agnico-Eagle: Pinos Altos Mine exact, following a temporary suspension, in which time the company carried out leach pad modifications. In the third quarter of 2013, payable gold production totalled 11,307 ounces from the Creston Mascota heap leach pad at a total cash cost per ounce of $523, with approximately 334,600 tonnes of ore being stacked on the Creston Mascota leach pad. It takes the nine month total of payable gold production from Creston Mascota to 23,261 ounces at a cost per ounce of $511.

In 2012, the company began sinking a $106 million underground production shaft, which it expects to complete in 2016.

Milestones achieved in the first quarter of 2013 included the completion of the raise bore pilot hole, concrete pours for the head frame, and the initial mobilization of the contractor and the first blasts in the shaft.

This project allows for better matching of the mill capacity with the future mining capacity when open pit mining begins to wind down, as planned in the next several years.

The Pinos Altos shaft-sinking project remains on schedule and budget, with approximately 50 percent of the total budget committed to date. Construction of surface infrastructure is nearing completion, and shaft-sinking will continue through 2015.

In the meantime, the company’s exploration continues to focus on converting resources to reserves, and expanding its existing assets and other targets.

For more information about Agnico-Eagle: Pinos Altos Mine visit: www. agnicoeagle.com

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Greenland Minerals & Energy

the final furlong Greenland Minerals and Energy Ltd is an exploration and development company focused on the Kvanefjeld multi-element project in South Greenland, which was recently given the nod by the Danish and Greenlandic governments

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

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Looking south over Narsaq towards the north Atlantic

Greenland Minerals & Energy

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n 2006 when he seriously started to sell his conviction that Greenland would be the next game-changer in the global supply chain for minerals, Rod McIllree found that the investment community in his native Australia shared neither his enthusiasm nor his outlook. In Australia not many people had heard of the Ilimaussaq Complex right at the southern tip of Greenland, which had been investigated by geologists from Greenland’s ‘mother country’ Denmark for decades and had been found to be rich in uranium. So he turned his attention to North America and Europe where he found an audience much more interested in understanding Greenland’s potential. “It was much simpler to sell the story there,” he says. “Greenland’s continuously stated position is that it sees its future intimately entwined with the development of a successful mining industry.”

In early 2007 GME acquired a majority interest in an exploration licence covering the northern Ilimaussaq Complex, and has subsequently increased that to 100 percent. The Kvanefjeld project is among the world’s most strategically important mineral projects because of the large amount of rare earth elements (REEs) that it contains. These are a group of about 17 minerals that have come into increasing demand for applications such as high powered magnets, lasers, mobile telecommunications and other electronic applications, optics, ceramics and the like. They are not in fact uncommon in the earth’s crust, but there are not too many places where they occur in commercially exploitable quantities. “Kvanefjeld is the largest global example of a uranium and rare earth deposit,” emphasises McIllree.

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20% Proportion of Greenland’s GDP that Kvanefjeld could generate

Southern Greenland enjoys moderate temperature ranges allowing for almost year round exploration

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China currently dominates the market for rare earths, accounting for more than 90 percent of global supply and at least 60 percent of consumption, however a considerable proportion of China’s production came from illegal sources sourced on the black market.

Now China is tackling the environmental issues associated with this black market and as a consequence there is less supply available at a time when demand is rising with the result being reflected in rising prices for the critical rare earths. It has cut back exports of all REEs from the 35,000 tonnes it supplied in 2010, and banned exports of the heavier rare earths terbium and dysprosium.

Understandably a number of projects are being advanced urgently to fill the gap.

Kvanefjeld undoubtedly has the scale to supply 20 to 30 percent of the urgent and growing need from European and North American markets and GME is well placed to become one of the world’s largest and most cost-effective producers of these speciality metals. It has many other advantages over rival projects. The sheltered fjord the deposit sits on is open to shipping all year long and is close to transatlantic shipping lanes.

Distances from project to port is less than ten kilometres and the town of Narsaq is not much

Greenland Minerals & Energy

The first drill hole being set up in 2007

further. Narsarsuaq international airport is 40 kilometres away and low cost power can be supplied from hydroelectric generation.

And if this did not trump the projects under consideration elsewhere in the western hemisphere, this is a non-refractory deposit.

Refractory ores examples of which might be allanite or monazite eudylaite or other zirconium based minerals have to be broken down using what Rod McIllree calls a ‘hot chemical sledgehammer’. Kvanefjeld on the other hand can be processed in open air leach tanks with dilute acids. This vast resource is also amenable to simple beneficiation (pre treatment concentration) through a simple floatation step where the company is getting industry leading

upgrades of more than 10 times allowing for huge cost savings downstream.

Until very recently just one thing stood in the way of GME. This was the Danish (and Greenlandic) government’s blanket ban on the exploitation of radioactive minerals. While rare earths are not radioactive the resource is mixed up with commercially significant quantities of uranium. When in the 1970s the Danish government backed examination of this site, it was uranium that it was interested in, but that interest was extinguished when Denmark decided to terminate its programme for nuclear power generation.

The problem for GME has been that it couldn’t separate the rare earths without separating

“Kvanefjeld is the largest global example of a uranium and rare earth deposit” BE Monthly | 133

“from the Danish government down to the local population at Narsaq, there’s a consensus that everyone wants this to happen” the uranium, and that was forbidden. But in October this year Greenland’s parliament voted to remove its long standing zero tolerance policy. This was not exactly a bolt from the blue, as it had been anticipated since November 2011 when Greenland’s Bureau of Minerals and Petroleum amended GME’s exploration licence over Kvanefjeld to include uranium giving it the right to apply to exploit uranium along with other economic minerals.

As far as Kvanefjeld goes, uranium is a

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by-product, with around 15 percent of the revenue attributable to it. Uranium has a ready market to sell any product into but McIllree points to the ability to tie in with a major to potentially supply upwards of three million pounds for more than 50 years, it’s an attractive alternative to unstable production.

“This policy change is a transformational event for the company as it now allows us to move forward with the mining licence application and continue to progress end

Greenland Minerals & Energy

Looking north up the Narsaq Valley

user engagement,” says McIllree. A bigger transformation, he continues, lies in the statement it puts out to the world at large.

“Greenland, and its government, is now our biggest advocate; it is very vocal about its desire to get a mining industry up and going, and this is going to be one of the main foundations of the country’s move toward eventual independence. This is not a niche event – it is something that is being discussed at all levels of government from the Danish government down to the local population at Narsaq, where there’s a consensus that everyone wants this to happen.”

Lifting the ban on exploiting materials like uranium and thorium was a transformative event for the company, but it is the beginning not the end of the process. A regulatory and safety structure needs to be established

by the Greenland government covering the extraction, processing, handling and transportation of these materials. In this it will no doubt benchmark on Canadian best practices which have been in place for a long time, and are particularly relevant considering the geology of north eastern Canada is identical to Greenland – they were a single land mass not that long ago in geological time.

However the decision is a signal that GME can now move Kvanefjeld on with confidence and one that will be noted by current and potential investors. “At the moment we are working with the regulatory bodies in Greenland and Denmark to identify the most appropriate implementation model for all stakeholders,” says Rod McIllree. “Three main modules are required to produce the REEs and uranium: the first is the mineral

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“we are working with the regulatory bodies in Greenland and Denmark to identify the most appropriate implementation model for all stakeholders�

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Greenland Minerals & Energy concentration process which occurs immediately adjacent to the ore body. A second, an intermediate refining step will probably also be done in Greenland though we are still considering the economic implications of that.”

The final stages of stockpiling and shipping the concentrates will require investment in roads and port facilities, and finance will have to be raised for this. However the path is now clear to lodge a mining licence application in 2014.

By then GME will have firmed up its implementation strategy, with partners the government can accept and thereby assure total downstream security of the product: uranium is a new industry for Greenland, still sensitive, and one it wants to get right.

Depending on how long it takes for the licence to be issued (and given the importance of Kvanefjeld to the nation that should not take long) he hopes to start construction early in 2015 to a schedule that will allow production to start at the beginning of 2017.

“We would see one or two ultimate end users for the REEs and a single recognised western uranium utility refiner as an offtake partner for the uranium.”

Kvanefjeld is the one project that will put Greenland on the map processing between three and four million tonnes of rock a year to produce 400,000 tonnes of mineral

Local Greenlandic work force

concentrate. It will, says Rod McIllree, generate more than 20 percent of Greenland’s GDP, boosting employment and downstream industries on top of the direct funds it will contribute in tax and royalties and will finally get Greenland off Denmark’s books. “The economic significance of this project cannot be overstated. When we look back years from now it is this policy event that will be seen as the spark that brought to life Greenland’s long awaited minerals industry” says McIllree, clearly conscious that Kvanefjeld is at the same time, both a company maker for GME and a foundation stone for the nation of Greenland.

For more information about Greenland Minerals & Energy visit: www.ggg.gl

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Alpha Minerals

Achieving high grades Alpha Minerals’ strategically selected uranium and gold properties are producing the results required to take this junior exploration company to the next level

written by: Will Daynes research by: Peter Rowlston

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L

ocated in the Canadian Shield of northern Saskatchewan and Alberta, Canada, the Athabasca Basin is the world’s leading source of high grade uranium and currently supplies approximately 20 percent of all that used across the planet. Covering some 100,000 square kilometres of Saskatchewan, and a small portion of Alberta, the surface of the basin consists of sandstone sediment varying from 100 to 1,000 metres in depth. It is at the base of this sandstone that uranium ore has been mostly found since it was first discovered in the region in the 1940s.

Today a number of high-grade uranium mines are scattered across the basin. One company whose own activities are primarily focused on the discovery and delineation of deposits in the region is Alpha Minerals. A junior mineral exploration company with strategically selected uranium and gold properties in North America, it has a proven record for making high-grade discoveries, including the recent near-surface discovery at Patterson Lake South.

The Patterson Lake South (PLS) property is the most advanced of Alpha Minerals’ projects in the Athabasca Basin, which collectively cover an area of over 170,000 acres. The project, which includes 17 claims that straddle the south-western margin of the basin, is a 50/50 joint venture between Alpha Minerals and Fisson Uranium Corporation.

To date, a total of 156 boulders and 32 soil samples from the property have been submitted for assay. Of the 188 geochem samples, 33.5 percent were found to contain less than one percent of triuranium octoxide

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Alpha Minerals

Geovector Management GeoVector Management Inc. provides mineral exploration consulting and project management services worldwide.

We provide comprehensive project evaluations that integrate the practical application of resource and reserve estimations with economic analyses, incorporating all disciplines, including environmental, community and aboriginal impacts.

We manage all aspects of programs in all phases of the mineral exploration cycle, for a wide variety of deposit types.

We manage multidisciplinary studies from metallurgy to environmental issues first hand. GeoVector implements

quality control programs to ensure your data is accurate and verifiable.

We carry out work under the most stringent environmental, health and safety guidelines and within budget constraints. Work sites managed by GeoVector are safe, clean and cost efficient. www.geovector.ca

G E OV E C TOR M A NAG E M E N T I NC . P ROV I DE S M I N E R A L E X P L OR AT ION C ON SU LT I NG A N D P ROJ E C T M A NAG E M E N T SE RV IC E S WOR L DW I DE .

With over 115 years of cumulative industry experience ranging from grass-roots exploration to advanced pre-development programs, we seamlessly integrate geological, geophysical and geochemical project databases for a complete multidisciplinary approach in the search for economic ore deposits. www.geovector.ca

Alpha Minerals

“The Patterson Lake South (PLS) property is the most advanced of Alpha Minerals’ projects” (U3O8), 26.6 percent contained between one and ten percent and 39.9 percent had over ten percent. The highest grade assayed at 40 percent U3O8. Since the autumn of 2012, the company has carried out regular drill assays, the latest of which were released in August 2013. This event involved the drilling of an additional five holes on the Properties R39OE zone, which returned 54 metres of 9.08 percent U3O8, which included 21.5 metres of 21.76 percent U3O8 and assays of up to 52.2 percent.

In addition to the PLS property, Alpha Minerals can also lay claim to both the Cluff Lake and Hook Lake assets within the Athabasca Basin. The former covers a collective area of 41,380 acres, within which the company operates under a joint venture with Rio Tinto.

The project itself adjoins the former Cluff Lake open pit mine, which was responsible for producing 63 million pounds of U3O8 at a grade of 0.93 percent during its lifetime.

Meanwhile, located northeast of the company’s PLS discoveries, Hook Lake

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covers some 32,000 acres of land within the basin. The area, known to be prospective for unconformity hosted uranium deposits, has been subject to comprehensive exploration in the past by the likes of UEM Inc., Cameco Corporation and Imperial Oil Limited. This has seen it subjected to airborne ground geophysical surveying, geochemical sampling and diamond drilling totalling over 2,400 metres. These tests have helped identify 17 electromagnetic conductors with a total strike length of 80 kilometres. Three of these conductors have been drill tested, with one intersecting 0.24 percent U3O8 over 2.5 metres.

In addition to its uranium activities, the company holds two gold assets, the Donna Gold Property in British Columbia and the Mikwam Gold Property in Ontario. The former lies within one of the largest clusters of anomalous values in stream sediments for gold and its typical pathfinders found anywhere else.

Alpha Minerals obtained and reviewed various reports concerning past exploration work conducted on the Donna property.

These indicated a strong linear zone of gold values intersected by four trenches over a distance of 250 metres and open on both ends, to the North West and South East.

Corresponding soil samples ranging from trace to 4,200 parts per billion of gold were found covering and surrounding this area.

Initial drilling of targets related to the known gold zones was completed by the company in 2010. The results indicate a strongly anomalous zone that extends west from the trenching and is as yet undrilled further to the west along the soils anomaly.

“There is much for Alpha Minerals to be positive about as we approach the New Year�

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Alpha Minerals

Understandably the company was and is very encouraged by this initial drill programme as it further identified the targets on the western side of earlier trenching and a gold anomaly in soils that extends more than 1,600 metres along the height of land between the Kettle River and Yeoward Creek, which are both historical gold placer producers.

The Mikwam Gold property on the other hand lays North East of Timmins, on the Casa Berardi Deformation Zone. An area of historical gold and other precious metals mineralization, the zone has in the past played host to exploration work costing in excess of $12 million, carried out by companies such as Newmont. The property remains on trend with the nearby Casa Berardi gold mine,

operated by Hecla Mining, while recent drill programme highlights include identifying 4.10 g/t gold over 19.0 metres, 4.99 g/t gold over 13.0 metres and 6.32 g/t gold over 5.6 metres.

With both its uranium and gold assets now producing sustained results, an event that at one point this year saw its shares hit a peak of $5 dollars per share, having previously been at a low of $0.20, there is much for Alpha Minerals to be positive about as we approach the New Year.

For more information about Alpha Minerals visit: www.alphaminerals.ca

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Underpinning Trinid & Tobago’s prosper

Damus is a privately owned company fulfilling an essentia advancing the upstream and downstream oil and gas indu that promise to define the Caribbean over the coming dec

written by: john o’hanlon | research by: robert hodgs 146 | BE Monthly

Damus

dad rity

al role in ustries cade

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Damus welder at work at the La Romaine facility

Damus

A

s we have recently seen in our extensive coverage of Trinidad & Tobago’s state oil company Petrotrin and its engagement in the exploration, development and production of hydrocarbons as well as the manufacturing and marketing of petroleum products, this island nation’s near term future is largely defined by its onshore and offshore resources. Major and junior exploration companies are scrapping over new licences and preparing to pour billions of dollars into development projects.

To succeed, though, they need to partner with competent local companies that can provide the support services they need, and this is where Damus, a key supplier to Petrotrin as well as the private sector, comes in. Established in 1973 the company has established some nine subsidiaries and affiliates since the time of its acquisition by the Mahabir family in 1981. Since then it has grown to become not only the largest mechanical fabrication and construction contractor in Trinidad & Tobago but the largest in the whole eastern Caribbean region. With a permanent staff of 200 augmented by a temporary workforce that can vary from 500 to over 2,000 depending on current projects, its services focus on the design, manufacture, procurement, installation and maintenance of almost every class of equipment required by the industry.

Damus’ headquarters is at La Romaine to the south west of Trinidad. There it operates a twelve-acre yard which used to house its main fabrication operation until it built a much larger shop at Point Fortin, 30 kilometres to the south. This houses a

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GEORGE UNION’S

PIPE AND TANK COMPANY

The Best in our Industry George Union’s Pipe and Tank was first founded to meet the demands of the petroleum industry in Guyana, specifically as it relates to the manufacturing and fabrication of Industry-standard Tanks and pipelines.

What we offer PIPING • Fabrication and Installation of pipelines for Petroleum products, including LPG. • Repairs and maintenance • Pressure Testing • Installation of Service Stations, hoists, air meters, etc., TANKS • Fabrication, erection and repair of vertical and horizontal tanks.

• Installation of underground tanks at Service Stations.

• Installation of LPG Tanks.

TESTING OF PIPES AND TANKS • Thickness Testing (Ultra sonic) • Pressure Testing (Hydrostatic) • Tank Calibration CLEANING • Sandblasting, painting of Pipes, Tanks, etc; • Cleaning of Petroleum Storage Tanks

www.georgeunionpipeandtank.com

Damus 50,000 square foot workshop, George Union’s Pipe and Tank over 160,000 square feet of George Union’s Pipe and Tank are committed to a very high warehouses and an office standard of work, innovation and on-time delivery, this building on a 30-acre site, has allowed us to expand our operations in new frontiers, with the capacity to turn out always endeavouring to meet our clients varied needs and 300 tonnes of steel fabrication objectives. We have the privilege of serving very large multia month based on working national companies with operations in the Caribbean, North America, Europe and other parts of the world. one shift per day. TwentyHaving well over 35 years in business, with a highly skilled four hour operation will and trained workforce, customer satisfaction is guaranteed. add an incremental eighty www.georgeunionpipeandtank.com percent of production. The 24,000 square foot workshop at La Romaine is now mainly used for light fabrication work and the submarine pipe fabrication that the company performs for Petrotrin’s offshore Trinmar operations.

It is worth dwelling for a moment on this work, as it illustrates Damus’ innovative approach to solving customers’ problems.

“Petrotrin is investing significantly in its Trinmar fields” confirms Director of Overseas Operations Stuart Mahabir. There are two ways of installing the undersea pipelines that link the rigs and transfer crude onshore – you can either use a specialised pipelaying ship to position continuous coil or join sections in situ from specially adapted barges. However high mobilisation costs and availability issues make the former a very expensive operation.

Trinmar continues to use Damus’ Atlantic LNG Plant built by Damus

“The work done for Bechtel on the 15 million tpa LNG plant at Point Fortin was a major milestone for the company” BE Monthly | 151

Protective and Marine Coatings

Providing a wide range of high performance marine and pc coatings. Addressing the needs of a worldwide Clientele in an ever changing operating environment.

International Paints Available at:

Tel: 1 868 665 6260 / 1676 | Fax: 1 868 671 6518 For Technical Information contact:

Joshua Madoo: 1-868-788-5984, Email: joshua@integra-pc.com Anil Maraj: 1-868-741-3517, Email: anil@integra-pc.biz Denesh Ragbir: 1-868- 775-9067, Email: denesh@integra-pc.com

ANALYSER SERVICES TRINIDAD LTD. is a company registered in Trinidad & Tobago and in existence for the past 15 years. We are part of a group of companies headed by Norsk Analyse AS of Scandinavia. Our support center is staffed with highly trained and experienced technicians to service and support Analyzer, Sampling Handling Panels, and Gas Detection Equipment.

Services we offer are; • Sales & After Sales Support • Preventative Maintenance • Service • Training • Spares Parts Tel: 868 679 3839 / 636 6576 | Fax: 868 679 3840 | Email: anaserv@tstt.net.tt

Damus pipelaying barges, on which pre-fabricated sections of Integra Protective Coatings Ltd has happily partnered with pipe – ‘pipe strings’ – are Damus Ltd in their successful provision of quality work over welded together in situ. This the years. From providing appropriate coating products, is the most effective solution technical advice, inspection services to introducing the for the client, and was made latest in coatings technology. Integra’s direct relationship more effective when Damus with International Paints also ensures all projects and backup services are monitored by our global team. re-engineered its barges to joshua@integra-pc.com enable them to operate in sea conditions that would have delayed the work in the past. “This is industry best practice. The work is now done higher above water level – it saves both money and time,” says Mahabir.

Pipelaying is a good example of the bread and butter work that Damus does, however in recent years it has distinguished itself by taking on and successfully completing some very high profile and complex projects.

The first such project to be landed in 1998 lasted nearly a decade and involved the construction of a four-train gas liquefaction facility at Point Fortin with a total capacity of 15 million metric tonnes per annum (tpa) for Atlantic, one of the world’s largest producers of Liquefied Natural Gas (LNG).

The EPC contractor for the $5 billion project was Bechtel Corporation of the USA, and Damus was Bechtel’s main mechanical

Integra Protective Coatings Ltd

300 tonnes Monthly capacity of Damus’ Point Fortin fabrication site

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Our Edge is Efficiency Advantage Lab Services Ltd. provides comprehensive laboratory testing services, which help physicians and other healthcare providers in the prevention, diagnosis, treatment and monitoring of disease and illness in patients. We also provide access to specialized clinical tests, used to detect cancer, monitor heart disease, identify neurological disorders and pinpoint individual allergies, among other things.

You can rely on our adherence to the highest levels of quality assurance and our employment of state-of-the-art technology.

For every test performed, we monitor the quality of the entire process from initial request, through test performance, to the prompt reporting of the result.

Phone: 868.653.6993, 868.290.3211, 868.648.0549 | Fax: 868.652.8017 E-mail: rmaraj@advantagelabservices.com www.advantagelabservices.com

Stationery & Office Consumables Specialised Library Supplies Office Furniture & Machines Audio Visual Equipment Computer Supplies Self-Inking Stamps Printing Services

Quality Brands • Attractive Prices • Free Delivery • Knowledgeable & Responsive Staff

Damus subcontractor, completing Advantage Lab Services Ltd train one in 1999, trains two Advantage Lab Services Limited, located in San Fernando, and three in 2002 and 2003, Trinidad, is a company specializing in high technology with train four finally being Laboratory testing services. The business was established commissioned in 2007. “That to offer a high quality diagnostic service to Clinicians, was a major milestone for Hospitals, Nursing homes, Corporate Companies and the the company,” recalls Stuart community at large.

Our Ultra modern facility and state of the art Laboratory Mahabir with pride. “At the complimented with our 25 years experience in Laboratory time the Point Fortin facility medicine provides a full range of Lab services including was the fourth largest in the Drug & Alcohol testing, Lipid Profiles, HIV, DNA Paternity, world.” Damus’ contribution Executive & UKOOA Medicals, Occupational Health Testing, included installation of all Ultra Sounds and ECG’s. above ground piping, static Advantage Lab Services Limited: Guided by the people we and rotating equipment, spool serve, provided by people who care. www.advantagelabservices.com and utility tank fabrication.

More recently the company completed its largest job ever, showing its diversity in the very different field of power generation. Between 2009 and its commissioning in 2012 Damus was the main mechanical contractor for a new 720 MW combined cycle power plant (CCPP) built

by Germany’s Ferrostaal GmbH for Trinidad Generation Unlimited (TGU) at La Brea. At the $740 million plant’s official opening in October 2013 Trinidad’s Energy Minister Kevin Ramnarine hailed it as the nation’s most efficient, producing electricity at half the unit cost of other sources.

Damus’ client list includes such major companies as BP, BG, BHP Billiton, Repsol and, of course, Petrotrin. To work with these companies presupposes best practice enshrined in certification, such as ISO 9001:2008, which assures the company’s quality management system (QMS) and the Safe-to-Work (STOW) accreditation. STOW assures not only safety but also environmental performance, stresses

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RM ENGINEERING

R.M. Engineering Limited is a Multi-Disciplinary Consulting Firm which provides services to Government, Institutional and Industrial Clients in the Architectural, Civil, Structural, Mechanical, Electrical Fields as well as Project Management.

Email: rm_eng_01@yahoo.com Telephone: 1 (868) 665 5575 / 671 9467 Telefax: 1 (868) 665 5575 Address: R.M. Engineering Limited 505 Centre Pointe Mall, Ramsaran Street. Chaguanas.Trinidad and Tobago

Stretching the Miles MILEAGE MACK offers the widest range of passenger, commercial and industrial tyres in Trinidad & Tobago. Our certified technicians provide sophisticated, professional, and highly technical services using state-of-theart computer diagnostic equipment. Mileage Mack is a certified member of the Tire Industry Association of North America (TIA) and Specialty Equipment Market Association.

inspired Your weekly digest of business news and views

Telephone: 1-(868)-657-1704 Email: sales@mileagemack.com www.mileagemack.com

www.bus-ex.com

Damus Mahabir. “Achieving that accreditation in 2012 was R.M. Engineering Limited was established on the 7th significant in that it confirmed January, 2005 and has been providing Consultancy Services that our workers were trained, since then. The company’s key personnel have considerable approved and recognised experience in the successful management and execution of a by the industry accepted wide variety of projects in Trinidad and Tobago. regulatory body in the local We actively aim to always satisfy our Clients by continuously improving on our operations and are proud to be associated energy sector. It affirmed with Damus Limited for whom we have been providing once and for all the company’s engineering consultancy services for over eight years. record of compliance.” rm_eng_01@yahoo.com Being a large employer, Damus recognises the importance of a well-trained and accredited workforce, he continues. “We operate a mixture of internal and external training, with an in-house syllabus for our junior engineers covering structural design, mechanical design and other topics. We also offer financial incentives to encourage them to acquire qualifications that may be required for our contracts.”

Though the global economic situation is reflected in a current slowdown regionally, Damus is planning ahead for the O&G boom that is in the making. The port of Galeota on Trinidad’s south-eastern tip is central to Trinidad and Tobago’s deepwater acreage and its shallow water acreage on the east coast. It is also close to Venezuela, Guyana, Suriname and French Guiana. If Portof-Spain is becoming the Houston of the Caribbean, as Minister Ramnarine states, he also proposes that Galeota should become a significant energy services hub for this part of the Caribbean. “We are planning to build a new fabrication facility on the east coast of the island,” says Mahabir. “It makes sense BP Bombax Subsea Manifold, built by Damus for us to improve our facility at Galeota to

R.M. Engineering Limited

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Damus take advantage of investment that is going to increase over the next five years.”

While activity levels are reasonably high offshore, Damus continues to seek out downstream project opportunities. One significant opportunity coming over the horizon is a proposed $850 million petrochemical plant at the Union Industrial Estate in La Brea, to be built by a consortium led by Japan’s Mitsubishi Heavy Industries (MHI). The plant will produce a million tonnes a year of methanol and 100,000 tonnes of dimethyl ether (DME).

If the project goes ahead, it would be the first new downstream energy plant in Trinidad and Tobago since 2010. Damus, as the only regional company with the experience, capacity and track record in delivering projects like this is well placed to capture particular construction elements of such a project.

Meanwhile Stuart Mahabir is looking further afield in a region that is increasingly grappling with the conflict between traditional industries like tourism and fishing and the oil trade. Curacao, with its huge independent refinery is a case in point. But Damus will always maintain its standards, he assures: “We are proud of our reputation and our brand. We will always conduct business in a transparent way and never tarnish the good name we have established for ourselves. We hope our customers continue to recognise our efforts in providing excellent contracting services to the local and regional oil and gas industry.”

For more information about Damus visit: www.damusgroup.com

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Wide-ranging

potential

160 | BE Monthly

Range Resources

Trinidad Chief Operations Officer, Walter Cukavac discusses the incredible progress made by Range Resources in the little over two years that it has been present on the Caribbean island

written by: Will Daynes research by: Robert Hodgson

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Range Resources

I

t was in 2011 that Range Resources entered into the oil market of Trinidad. A listed oil and gas exploration, development and production company already boasting interests in Puntland, Somalia, Texas, USA and the Republic of Georgia, Range’s arrival on the Caribbean’s southernmost island nation was instigated through the acquisition of 100 percent interest in three production licences, Morne Diablo, South Quarry and Beach Marcelle.

Each located within producing onshore oilfields, Range’s newly acquired assets were complemented by the acquisition of a local, fully operational drilling company possessing six drilling rigs and further completion and workover rigs, and operational personnel.

The Morne Diablo onshore licence comprises 9,300 acres along the south coast of the island and is subject to a farm-in agreement with Trinidad’s national oil company, Petrotrin. Range has extended its existing FOA until 31 December 2021.

The licence has 2D and 3D seismic coverage and features multi-productive horizons, all of which are currently being targeted. Of its 300 plus wells, 165 are currently producing with 33 new development wells having been added since its acquisition in 2011 and potential for a further 100 wells to be drilled over the coming years.

Comprising of 3,700 acres of land, the South Quarry onshore licence is another of Range Resources’ three original acquisitions.

Subject to the same type of farm-in agreement with Petrotrin as Morne Diablo, the licence also shares characteristics such as the fact that it been subject to 2D and 3D seismic and

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Gulf Engineering Services Limited

Gulf Group of Companies have been servicing the Oil and Gas Industry in our Twin Island Republic of Trinidad and Tobago, South America and the Caribbean for the past Thirty-Seven years on a twenty-four hour basis

with a combined working knowledge of over three hundred years. Our facility is API and ISO 9001 certified. The principal area of business includes Machine Shop Services, Sales and Supply and Rental of drilling and cleanout tools and associated equipment. We are pleased to be associated with Range Resources and welcome them to our shores and wish them every success in their future undertakings as we continue to provide our services to meet their specific needs.

E. rgopeesingh@gulfengtt.com

SERVICING THE OIL & GAS INDUSTRY

GROUP OF COMPANIES

Email: rgopeesingh@gulfengtt.com | Telephone: 1 868 652 8447/8

Range Resources

is home to multiple horizons that are being Production Sharing Contract with Petrotrin, actively explored. The field was discovered which extends in ten year periods. The in 1938 and resulted in over 90 wells drilled licence contains four individual fault blocks to date, 14 of which are currently producing. that will be targeted using a waterflood EOR What makes South Quarry stand out however programme, while a technical study carried is the fact that there are numerous oil seeps out in 2012 also identified more than 50 infill present in areas yet to experience any well locations. In total, there are currently 230 significant appraisal work. This has led Range wells found on the Beach Marcelle licence. to mobilise one of it shallower rigs from “It was the availability of these licences Morne Diablo programme and the drilling company that really presented us with across to South Quarry to undertake appraisal of some the opportunity to come of the oil seeps along with the in and establish ourselves development of an inventory as a significant player in Trinidad,” explains Trinidad of up to 20 wells.

Of Range Resources’ Beach Marcelle on the other Chief Operations Officer, wells are currently hand is a 3,900 acre licence Walter Cukavac. “In the producing oil in Trinidad subject to an Incremental time since we have made

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considerable strides, doubling our employee count to 240 people, adding a new technical administrative office which allows us to do more in house engineering and evaluation of projects, and increasing the operational capability of our drilling company.”

This latter development has seen the company bring a further two drilling rigs online and complete the drilling of more than 30 wells. “There are very few independent operators in this market that possess the infrastructure that Range has to offer,” Cukavac continues. “Trinidad is a small market in relative terms and this naturally presents some limitations for companies when it comes to things like gaining access to rigs and equipment at short notice. Our capabilities allow us to execute our projects with our own equipment and better control the timing of our activities.”

Boasting a stable economic and political climate, a judicial system based on English common law and solid infrastructure in the form of roads and transportation networks, Trinidad is clearly a great place to be for a business like Range Resources.

“What we have established in the country is an experienced management team dedicated to the longer term outlook in Trinidad,” Cukavac says. “I think historically

the smaller operators in Trinidad have shared certain characteristics that have seen them collectively play a low risk game based on short term goals. What makes Range different is the fact that we are undertaking field development plans that are setting us up for years to come. We know it will take more than drilling one or two new wells to make a telling difference and we have a huge inventory of close to 200 wells to drill.

“What we have established in the country is an experienced management team dedicated to the longer term outlook in Trinidad” 166 | BE Monthly

Range Resources

This is what will make a real as often as possible has also had a positive impact on difference over time.”

The difference Cukavac Trinidad’s environment. speaks of doesn’t just come W hen it comes in the form of benefits for to suppor t i ng loc a l Trinidadians, it is important Range Resources. It also means positive developments to first consider the fact that for the areas around which some 98 percent of Range’s Range’s production the company operates and workforce are nationals target for the end of 2014 the communities who live of the island. “Almost all there. Aware of the sensitive of our technical staff call nature of Trinidad’s ecology, Trinidad home, while we it has always been the aim of the company to have also made great strides to bring optimise its operations in order to minimise in young engineering talent from local the footprint it leaves behind. Part of its schools that we train, mentor and help to efforts have seen Range focus on the drilling absorb the right culture that we line our of slimmer, six inch holes which utilise less business with from top to bottom,” Cukavac drilling fluids, while the reusing of water enthuses. “In addition to the work we do

4,000 barrels of oil per day

BE Monthly | 167

onsite we also continue to support local businesses, endeavouring to maximise our local content of supporting items, and also provide capital and sponsorship of several local schools and charities.”

As we speak, Range is in the process of ramping up its drilling activity in Trinidad, with the next ten wells scheduled to be

accessed by its production and work over rigs in the coming weeks. This is all part of its plans to lift and maintain the oil production to 4,000 barrels of oil per day by the end of 2014, before increasing this again to 9,000 by the end of 2015 through conventional and unconventional work programmes.

Equally if not more significant is the fact

“To date we have ramped up our personnel levels and our internal infrastructure, now it is time to put that to use in order to increase our oil production levels and revenues”

168 | BE Monthly

Range Resources

that Range now finds itself close to finalising a partnership with Niko Resources, a deal that will give it access to 280,000 acres of onshore and offshore acreage. “Access to this acreage, which itself has a huge upside in terms of reserve potential, will allow us to consolidate an even larger presence in Trinidad,” Cukavac says. “It also follows on from our participation in the recent onshore bidding round for the St. Mary’s Block. This is a 35,000 acre block, again with massive reserve potential, that really typifies the kind of long term projects that we want to target in Trinidad.”

Consolidating acreage that will bring the long term opportunities it desires is clearly high on the list of the company’s priorities moving forward. Nevertheless, as Cukavac

concludes, Range remains conscious of its own need to press forward with the progress it has made across the business. “To date we have ramped up our personnel levels and our internal infrastructure, now it is time to put that to use in order to increase our oil production levels and revenues. As our work force matures technically and gains greater capabilities we will be able to take on increasingly complex types of drilling and production work that will ultimately allow us to further reduce costs and increase profitability.”

For more information about Range Resources visit: www.rangeresources.com.au

BE Monthly | 169

the

gia

Mexico’s largest ga go-to partner for c to set up operati because of its lo history as an imp and distributor

writt John O’ resear Peter Ro

170 | BE Monthly

gas

Grupo Zeta

ant

as company is the companies looking ions here simply ong and stable porter, processor of gas products

ten by: ’Hanlon rch by: owlston

BE Monthly | 171

Manzanillo

Grupo Zeta

F

ounded in 1977, Grupo Zeta started life as a simple sales organisation set up by the legendary Don Miguel Zaragoza Fuentes, one of Mexico’s best known entrepreneurs.

Knowing that there would be a growing demand for gas in the country as its industrial base grew in tandem with its population, Zaragoza then set about the task of creating a full-scale downstream industry. He began to fabricate storage tanks, gas cylinders and every kind of gas handling equipment. Today Grupo Zeta is a fully integrated gas company that employs 70,000 people. It has a presence in seven countries, more than 70 distribution centres bringing gas to nearly 1,000 towns and industrial sites and controlling the entire supply chain from the industrial or domestic consumer at one end, only just stopping short of production. Don Miguel even has his own fleet of tankers to bring liquid petroleum gas (LPG) to replenish the huge Zeta owned tank farms at the port cities of Manzanillo and Ensenada as well as the storage facilities he has established in Guatemala and Peru.

From these facilities the gas is taken to depots across Mexico as well as to the Central American countries of Belize, Guatemala, Nicaragua, El Salvador, Costa Rica as well as Peru, where Grupo Zeta has a strong presence.

With expansion in all these territories Zeta is currently constructing a $40 million expansion to the vital LPG terminal at Guatemala’s main Pacific port Puerto Quetzal.

Back in Mexico the network of road tankers is robust, says Juan Pablo Fierro, Zeta’s Assistant Director of Operations, reaching customers in every state.

BE Monthly | 173

This is of vital importance equally to largescale consumers and those households that depend on gas for heating and cooking. “We have a phone in system for ordering domestic supplies: for businesses, how we supply them depends upon the amount they are consuming.

For instance mining companies consume huge amounts of gas, and are typically located in remote areas, way beyond the reach of pipeline reticulation that exists in the cities. The good thing about LPG is that it can be tanked like water and we do exactly that! We schedule our deliveries in such a way that they will never run out of gas.”

Many mining operations consume so much gas that that they need their own on-site storage capacity. Zeta will install all the equipment and tanks that they need, says Fierro, but he then points out that this is far from the end of the story. Once there is any significant gas storage – a level set fairly low at 20,000 litres – a whole raft of regulation kicks in, part of which involves fire precautions. Essentially the site has to have its own fire fighting service with staff trained and equipped to deal with any emergency that might arise. Zeta will install the equipment, and man the station with trained staff to a level that provides the client with complete confidence that it is compliant with industry best practice and statutory regulations.

The shareholders of mining companies that come in to exploit Mexico’s rich silver and gold reserves insist upon world class levels of environmental, safety and social performance.

In many jurisdictions this is a real challenge, however Mexico has plenty of experience available and in Zeta they find a competent partner to which to outsource this aspect of the business. “The bigger the storage facility the bigger the risk,” says Fierro. “We provide end to end service for mining companies, so if there is

“Gas is dangerous … that is why we insist on standard operating procedures in everything we do” 174 | BE Monthly

Grupo Zeta

Ensenada Esferas

a leak or any other problem we have people who reorganised its business units to treat these are well qualified and experienced in dealing two as a single unit. It will be recalled that with the product available to fix that problem.� the Toronto-based company Agnico-Eagle had Dealing with gas leaks is not started to develop its Pinos something that can be handled Altos gold mine, with silver as by general engineers, no matter a by-product in 2007, pouring how well qualified they are, its first gold in 2009. Pinos he adds. Special tools have Altos is located in the Sierra Madre mountains in northern to be used when working on People employed by Mexico, 220 kilometres west gas equipment, designed to Grupo Zeta eliminate the risk of generating of Chihuahua. Underground any spark either through mining began in the late friction or static electricity. And the operator has spring of 2010, and a satellite operation was to know how to use them. This is all part of the started nearby in 2010, pouring its first gold service offered by Zeta. in December that year. Agnico-Eagle expects Much of the current mining development to be producing in its Chihuahua mines until seems to be happening in the north-eastern 2029, and has now turned its attention to states of Chihuahua and Sonora, and Zeta has Sonora where it is developing its La India

70,000

BE Monthly | 175

mine in the prolific Mulatos gold belt. That mine is expected to start producing in 2014 and to average 90,000 ounces of gold per year over the reserve life. Zeta is negotiating a deal with Agnico-Eagle that would revamp its entire LPG storage and pipework in its Chihuahua operation, a deal that would include a specially built long chassis truck (at Zeta it is affectionately known as ‘the beast!) that carries a 22,000 litre tank. The Sonora and Chihuahua operations are only 70 kilometres apart, providing operating synergy between the two properties, he points out.

With both Sonora and Chihuahua attracting new companies, Zeta has plenty of opportunity to bring its innovative equipment to new projects. With an unequalled track record in the sector, and the capacity to guarantee supplies of gas, Zeta is the perfect partner for these companies says Fierro. “We always have gas. Other companies tend to run out but that never happens with us.” Most of

176 | BE Monthly

the competing gas companies buy their gas at the border between Juarez and El Paso, Texas.

This gas is piped through from the USA and when that pipe breaks down, lines of trucks build up waiting to get filled. That can take a week, he says. Zeta has independent supplies, tank farms at strategic locations, and its customers will never run out of gas, he assets confidently. “In the gas business everything has to be 100 percent serviceable. If you are relying on old equipment and it breaks down you have a problem. Small details can cause huge problems in this industry.”

Attention to detail in maintenance and the provision of the most up to date equipment is something that Zeta is passionate about, he says. “We have maintenance teams always on alert. They think like doctors! Even if they are at home they have their phones on 24/7 to deal with either gas supply or for maintenance.”

And in a rather smart marketing move, this service is available whether or not the supply

Grupo Zeta

contract is with Zeta. Service is every bit as important as price to these customers.

One of Juan Pablo Fierro’s responsibilities is to train the staff, not in technical matters, which is done at the company’s Juarez training facility, but in matters relating to customer service. It is another area in which Zeta is differentiated from its competitors. “We have a meeting every morning talking about how we can improve our service to customers and analyse any glitches.

We want to sell more gas of course but the priority is service, and in that we start with our own employees, the people who are touching our clients.” It is a concept more familiar in the hospitality industry, he says, but among gas suppliers it is rarely found.

Finally, he says that Mexico needs to follow other countries in requiring that individuals

as well as companies are nationally accredited before they are let loose on gas. A scheme similar to the UK’s Gas Safe Register would do a lot to raise industry wide standards. Meanwhile it is down to Grupo Zeta to be the guardian of best practice, something that Juan Pablo Fierro wholeheartedly accepts. He thinks it is crazy that you can’t cut hair in Mexico without a certificate, but you can repair a gas leak! “Gas is dangerous. People who work on it daily can get blasé and drop their guard. That is why we insist on standard operating procedures in everything we do.”

For more information about Grupo Zeta visit: www.grupozeta.com

BE Monthly | 177

Hydrocol

Making things

happen

Hydrocol has made its name by being an expert in developing infrastructure projects on a large scale and its legacy can today be found throughout Ghana

written by: Will Daynes research by: David Brogan

BE Monthly | 179

Hydrocol

O

ver the last two decades and that they are blessed with the flexibility the West African country and adaptability required to prosper in of Ghana has successfully this market. By possessing such a high evolved into a stable and degree of local knowledge, the company mature democracy. Hand-in- has been able to bring together the type of hand with this development has been the public-private partnerships that have seen emergence of its blossoming economy, one Ghana continue to make massive strides in that continues to grow ahead of the average infrastructure development. for the African region, with GDP growth The primary operations of the company registered at 15 percent in 2011 and 7.9 can be found in the activities of the two percent in 2012. areas of its business, those being Hydrocol Analysts now predict that the Ghanaian Infrastructure and Hydrocol Energy. The economy will have expanded rapidly once former is a pioneer when it comes to large again during the second half of 2013, growth scale projects that have the ability to greatly that is bench marked on enhance the lives of the the continued expansion of communities in which they the country’s service sector, are established. higher oil production and Water projects represent improved energy supply. several of these life Hydrocol was established enhancing projects. One, the Ghana’s GDP growth to facilitate investment in Befesa Seawater Desalination rate for 2012 Plant in Nungua, is a perfect large scale water utilities example of Hydrocol’s and infrastructure projects in Ghana, areas of massive importance efforts to support the development of local for a country that was quickly finding communities within Ghana. The company itself becoming a centre for national and was granted the 25 year concession to build, international business activity. Headquartered own, operate and transfer this project by in Ghana’s capital city of Accra, Hydrocol Ghana Water Company Ltd (GWCL), and it has built itself on the back of its ability to is executing it in partnership with Abengoa leverage international partners with the Water and Sojitz Corporation of Japan. Once financial, technical and operational capacity complete the plant will supply approximately that ensures that the solutions it provides are 60,000 cubic metres of potable water per day tailored specifically to local requirements. to GWCL for onward distribution to TeshieHydrocol understands local business Nungua and surrounding areas of Accra in and realises that in order to implement a the Greater Accra Region of Ghana.

A similar project, the Western Region project successfully it is fundamental that all parties are familiar with the unique Seawater Desalination Plant, is also currently peculiarities of doing business in Ghana under development in city of Takoradi. This

7.9%

BE Monthly | 181

Weekly Because a month is a long time to wait...

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Hydrocol reverse osmosis treatment ENDSIGHT CONSULTING plant will again supply potable Looking to expand your company’s international portfolio? water to GWCL, this time to The most promising high-growth markets for the next 20 the tune of 100,000 cubic years are in Africa. Chinese, Indian, and other international metres per day, a figure that competitors have already made that bet… and they’re not will almost double GWCL’s wrong. Don’t let revenue, profits, and market share sit current production capacity there for others to take. Give Africans a better alternative – they’re looking for one. supplying the twin cities of info@endsightconsulting.com Sekondi and Takoradi, and the surrounding areas.

Hydrocol Infrastructure’s expertise also extends to power distribution. An example of its efforts in this field can also currently be found in the Western Region of the country where it is partnering with engineering and construction company Abeinsa on the construction of a 400MW combined cycle power generation plant. Working in collaboration with the Volta River Authority, the two companies are helping to address some of Ghana’s power generation challenges by creating a facility that, when complete, will help to fill a critical supply gap in Ghana’s power infrastructure.

Hydrocol Energy, on the other hand, was established as a result of the Ghanaian government’s expressed commitment to promote indigenous companies in the country’s relatively new oil and gas sector, and ensure effective capacity building which

“in order to implement a project successfully it is fundamental that all parties are familiar with the unique peculiarities of doing business in Ghana” BE Monthly | 183

“the company has become a leading figure when it comes to creating collaboration at the cutting edge of public-private development� will facilitate a more competitive sector.

Hydrocol Energy specialises in offering bespoke consulting and advisory services for the oil and gas sector, with one of its biggest strengths being its ability to

184 | BE Monthly

leverage on the strong relationships it has developed, particularly the relationships it has with key institutional figures that are proactive and instrumental in decision making in the country.

Hydrocol

Across both Hydrocol Infrastructure and Hydrocol Energy the company maintains a key supply chain on all projects under development. This includes a core base of local suppliers, who help bring local knowledge directly to the projects, as well as a collective of international suppliers and contractors who are capable of bringing industry leading expertise into a still evolving region.

Hydrocol recognises that infrastructure is capital intensive. By selecting the right partners to participate in the right projects the

company has become a leading figure when it comes to creating collaboration at the cutting edge of public-private development in the utilities and energy sectors. This has provided Hydrocol with an invaluable foundation from which it can move ahead with its plans to continue to improve the landscape of Ghana in the years ahead.

For more information about Hydrocol visit: www.hydrocolgh.com

BE Monthly | 185

186 | BE Monthly

Eskom - Kusile Power Station Project

power to the people The on-going construction of Eskom’s Kusile Power Station Project highlights precisely how a large-scale new build project should be built for the benefit of local people and communities

written by: Will Daynes research by: Vincent Kielty

BE Monthly | 187

Eskom - Kusile Power Station Project

E

stablished as the Electricity Supply grow to more than a trillion rand by 2026.

Commission in South Africa in This will ultimately see Eskom double its 1923, it was in July 2002 that capacity to 80,000 MW by that same year.

One of the major undertakings with Eskom was converted into a public, limited liability company, Eskom’s Build Programme is the development wholly owned by government. Today Eskom of the Kusile Power Station, a coal-fired is responsible for generating approximately power station being built near Emalahleni 95 percent of all the electricity used in in Mpumalanga, the contracts to which are South Africa and approximately 45 percent valued at around R31.5 billion and were of that used in Africa. awarded to the company in February 2008.

Among the top 20 utilities in the world by Terracing work commenced on the project generation capacity, with a net maximum in mid-2008, with the first unit going online self-generated capacity of 41,194MW, Eskom during 2013. Work on the station is expected directly provides electricity to about 45 to be completed come late 2016.

Located close to the percent of all end-users in South Africa, with the other existing Kendal Power 55 percent being resold by Station in the Nkangala District of the Mpumalanga redistributors, including municipalities.

Province, the Kusile site At home Eskom generates, is about 1,355 hectares in Of all electricity used in transmits and distributes size and represents Eskom’s South Africa is generated most advanced coal-fired electricity to industrial,

by Eskom power plant project. m i n i ng, com me r c ia l, agricultural and residential Upon completion the customers and redistributors. Meanwhile station will consist of six units, each rated at outside of South Africa’s borders the approximately 800MW of installed capacity, company buys electricity from and sells giving a total of 4,800MW. This will make it to the countries of the Southern African one of the largest coal-fired power stations Development Community (SADC). in the work once finished. The coal itself will In 2005 Eskom commenced activity be sourced from Anglo Coal’s New Largo on its Build Programme in South Africa, and Zondagfontein collieries. The first unit a programme revolving around the is planned to begin commercial operations construction of additional power stations in 2014. Thereafter, the other units will and major power lines on a grand scale in be commissioned at approximately eight order to meet rising demand for electricity month intervals, with the last unit expected in the country. Up to the end of 2013 the to be in commercial operation by 2018. company’s capacity expansion budget was To date, the project remains on schedule to R385 billion, a figure that is expected to meet its target date.

95%

BE Monthly | 189

TRANSFORMING BUSINESS BUILDING OUR NATION T-Systems is a localised ICT services multinational which is fully committed to South Africa’s national priorities and is going beyond compliance to become a leader in transformation and deliver innovative ICT that works for South Africa.

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Eskom - Kusile Power Station Project Kusile Power Station also holds the not inconsiderable honour of being the first complex of its kind in South Africa to have Flue Gas Desulphur ization (FGD) installed. A highly sought after, state of the art technology, FGD is used to remove oxides of sulphur, sulphur dioxide for example, from the exhaust flue gases created in power plants that burn coal or oil.

This technology is fitted as an atmospheric emission abatement technology, in line with current international practice, to ensure compliance with air quality standards.

This is of particular importance in the case of Kusile, which is located in a priority airshed or airshield.

The construction of Kusile Power Station is having, and will continue to have, a major positive impact on the lives and the economy of the community of the Nkangala District. Job creation is expected to reach a peak of over 12,000 direct jobs during the plant’s construction, with homes and social infrastructure constantly being developed around the site to serve its many thousands of contractors. Today some 8,000 people

T-SYSTEMS SOUTH AFRICA T-Systems South Africa is an ICT services provider with a unique blend of German heritage and local shareholding. Partly owned by Deutsche Telekom, the company established a local office in South Africa 16 years ago and has since grown to become a leading ICT outsourcing company in the country. Today we can proudly say that we have been able to combine the ingenuity and commitment of our employees, 97% of whom are South African, with the technology and international best practice of our majority shareholder Deutsche Telekom, to deliver “ICT that works” for our customers.

In order to create value for our customers and help build our nation, T-Systems South Africa is focused on transforming business in three key areas:

• Transforming business through ICT that works • Transforming business through innovation • Transforming business in South Africa, for South Africa To transform our business in South Africa, for South Africa, T-Systems has been on a journey of accelerated transformation, and can now proudly say that we are a leader in terms of enterprise supplier development and employment equity within the ICT industry.

T-Systems South Africa is proud to be associated with utility provider Eskom and to provide permanent converged network infrastructure at its Kusile Power Station in Mpumalanga, and would like to congratulate them on all of their successes. www.t-systems.co.za

BE Monthly | 191

can be found working on the construction site, more than 40 percent of which reside in the local area.

As a result of Eskom’s construction activities alone, Nkangalas’ gross domestic product (GDP) is expected to increase by approximately 25 percent per year. On a wider scale the power station will also be

responsible for a 0.35 percent rate of annual growth for South Africa as a whole, with approximately 40 percent of the project cost expected to be spent locally.

The lasting contribution that Kusile Power Station has already made to surrounding communities cannot be overstated. To date its construction has enable countless numbers

“Kusile site is about 1,355 hectares in size and represents Eskom’s most advanced coal-fired power plant project”

192 | BE Monthly

Eskom - Kusile Power Station Project

of residents from eMalahleni, Delmas Ogies, Phola and other neighbouring towns to be able to provide for their families by being employed on the project. Meanwhile, local businesses also continue to benefit greatly from the project, from those within the hospitality and catering sectors to construction and material supply businesses.

The project has a multi-package contract strategy, and included in each contract is a strong focus on the requirement for local development, a focus that falls under Eskom’s Competitive Supplier Development Programme.

The focus here is on local employment, business

development, sustainability and financial investiture to leave a long-term legacy in Mpumalanga and South Africa.

It is thought that from 2008 until 2019 the Kusile Power Station Project will have had a direct impact on the lives of some 88,600 people, be it in the form of employment, skills development or through community support.

Whichever way you look at it that is one impressive legacy for any project to have.

For more information about Eskom Kusile Power Station Project visit: www.eskom.co.za

BE Monthly | 193

An elementary approac

to renewable ener

It is in Ireland where global renewable energy developer Element Power is bringing to fruition several vital wind developments, including the ground-breaking Greenwir

written by: Will Daynes research by: David Brogan 194 | BE Monthly

Element Power

ch

rgy

r d energy re Project

BE Monthly | 195

Mike O’Neill, President and COO, Element Power Group

Element Power

I

n more than two decades since the three people to one employing between first wind farm project was realised 60 and 70 in a matter of years.” in 1992 at Bellacorrick, County Mayo, At the time that O’Neill, Harte and his wind energy’s contribution to Ireland’s former colleagues at SWS Energy, Tim electricity supply has steadily risen to Cowhig and Kevin O’Donovan set up Element the point where it had installed 1.7GW of Power’s operations in Ireland, the country’s capacity by the end of 2012. domestic wind business was in many ways With the country now tasked with a struggling sector, one facing problems achieving its national targets for renewable with curtailment, refit schemes and with energy by 2020, which calls for 40 percent establishing greenfield developments due to of its electricity to come from renewable a lack of good grid connections. The answer sources, an estimated 5,500 to 6,000MW of to these challenges was for the company wind generation is required. to buy into two existing projects, the One of the companyies contributing Garranereagh Wind Farm Project and the towards Ireland’s long term Monaincha Project, which it energy plans is Element has since gone on to develop Power. Owned by Hudson and improve upon further. “ T he Ga r r a ne r eag h Clean Energy Partners, Wind Farm Project is a Element Power is a global renewable energy developer 9MW project that was The generation capacity that develops, acquires, officially commissioned in of the Greenwire export August of this year, while builds, owns and operates project to the UK the Monaincha Project is a portfolio of wind and a 36MW undertaking that solar power generation facilities worldwide. The company is active is currently under construction, with in 16 countries, with more than 9,280MW the turbines due to arrive on site at the of projects in development and a number of beginning of December, with the aim operating assets already sold. being for it to be commissioned come “Element Power itself is not an old the Spring of 2014,” Harte continues. “In company, having only been set up in 2008 addition to these we have a further two

by President and COO, Mike O’Neill,” projects, the 17MW Acres Project Donegal states Peter Harte, Chief Technical Officer and the 32 MW Barranafaddock Project for Ireland. “What it does possess however in Cork, where construction is also set to is a management team with a great deal begin during 2014.” of experience having previously been a A quick glance at Element Power’s busy part of SWS Energy, a very successful calendar of activities over the coming months independent wind business that we highlights the fact that the wind power collectively built from having a staff of industry has undergone a notable change in

3gw

BE Monthly | 197

Fehily Timoney & Company (FTC)

Fehily Timoney & Company (FTC) is a leading consultancy in the wind energy sector, providing specialist services throughout the project lifecyle. We are market leaders in this sector, working with key industry players, to deliver projects of exceptional quality. Our in-house capability extends across full EIA & planning services, technical due diligence, design, construction and

operational monitoring. Our engineers and scientists are of the highest calibre, with significant experience in specialist areas such as ecology, geology, peat stability, water quality, noise and shadow flicker, turbine base & civil infrastructure design and construction management.

E. info@ftco.ie

IDEAS SET IN MOTION For a successful project contact our dedicated

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email: info@ftco.ie www.fehilytimoney.com Head of Environment and Energy | Clodagh O’Donovan email: clodagh.odonovan@ftco.ie

DUE DILIGENCE CONSTRUCTION MANAGEMENT OPERATIONAL MONITORING

A leading Consultancy in Renewable Energy

Element Power

only the five years since the company was planning, grid allocation and pricing, making established. The driving force behind this it more favourable to build wind projects change is without doubt the aforementioned in the country. I think in many ways this Irish national policy to meet its target of was a relatively easy policy decision for the ensuring that 40 percent of its electricity is government to make because, while it could derived from renewable sources by 2020. meet its renewable targets using a variety This itself is the result of European Union of technologies, Ireland already boasts demands that 16 percent of exceptional wind resources the country’s total energy and the type of favourable mix should originate from conditions that have allowed it to become a most renewable methods by the turn of the next decade. mature and competitive “In response to being renewable source for a percentage of our electricity.” set these targets,” Harte Ireland’s installed In addition to the various explains, “the Irish wind energy capacity projects detailed previously, government introduced a as of the end of 2012 Element Power has also spent raft of policies centred on

1.7gw

BE Monthly | 199

the better part of the last three years laying the groundwork for one of the largest and most ambitious wind power related undertakings ever seen anywhere in the British Isles. I am referring to the Greenwire Project, a 3GW export project to the UK. “To date, we have secured private land for approximately two of the three gigawatts for the Greenwire Project, have secured a good connection in the UK for a 2017 connection date and will be looking to submit a complete planning application in 2014,” Harte says. “Powered by a fleet of approximately 40 projects in the midlands of Ireland, the objective for the Greenwire Project is to have it providing green power to the UK by 2020 for an estimated operating lifetime of 25 years.”

The sheer scale of the Greenwire Project can be highlighted in several ways. In megawatt terms the project alone will deliver more than twice the amount generated across Ireland at present, while in terms of wind farm sites it will see Element Power building a further 40 on top of the 160 that already exist.

Meanwhile the scale of the grid connection alone is huge, with over 1,000 kilometres of underground cable being required to connect up all the turbines and export the power to the UK. “As you can imagine, this is a very

specific engineering task in itself,” Harte says.

“Nevertheless, the feasibility and costs have been demonstrated pretty well by the recent 500MW East-West Interconnection, which was commissioned last year.”

The significance of Harte’s reference to the East-West Interconnection also stems from the fact that this was a project overseen by

“The Irish government introduced a raft of policies making it more favourable to build wind projects in the country” 200 | BE Monthly

Element Power

British Energy Secretary, Edward Davey with President and COO of Element Power, Mike O’Neill at the Liberal Democrats party conference in 2012

Dermot Byrne, a highly respected figure in the Irish energy business who was officially unveiled as non-executive director of Element Power’s Irish subsidiary at the end of October.

“Dermot joins us having successfully led EirGrid, the transmission system operator for Ireland, through a substantial period of change to become a world leader in the integration of wind power into the power network,” Harte enthuses. “Element Power will be able to call upon his experience to guide it, particularly throughout the Greenwire Project which will break a lot of new ground in the years to come.”

Other plans for the months and years ahead for Element Power look set to revolve

around continuing to acquire projects that are not yet fully developed, before improving them through the use of its own development expertise and construction skills. “We have good access to both bank and equity finance and this will allow us to continue to replicate the business model which has proven so successful to date, and place us in a position to have two or three projects running through the system at any one time,” Harte concludes.

For more information about Element Power visit: www.elpower.com

BE Monthly | 201

Carrying a reg

2013 has been a momentous year for Yantian Internation Container Terminal and, as Managing Director Patrick Lam explains, the future looks equally bright

written by: Will Daynes research by: James Boyle

202 | BE Monthly

Yantian International Container Terminals

gion forward

nal

BE Monthly | 203

YICT

I

n the early 1990s, a period of time now recognised as being the dawn of China’s economic take-off, the country’s import and export industries were very much in their infantile days,” explains Patrick Lam, Managing Director of Yantian International Container Terminals (YICT). “It was against this backdrop that the Central Government and the Shenzhen Municipal Government resolved to develop a large container port at Yantian, in Guangdong Province, China.

This would become a reality when, in October 1993, the State Council approved the founding of YICT, a joint venture between Hutchison Ports Yantian Limited and Shenzhen Dongpeng Industry Company Limited, now the Yantian Port Group, which would be responsible for the construction and operations of Yantian Port.”

Now, twenty years on, YICT has developed into one of the most innovative and technologically advanced container handling facilities in the world. A natural deep-water port, it exists as the leading gateway serving import and export container traffic generated by its immediate cargo hinterlands. With a total of 16 berths and a yard area of 373 hectares, YICT has built up an extensive cargo base which attracts some 40 major shipping lines that provide approximately 100 weekly services linking to major ports worldwide.

Over the last two decades, Yantian Port’s annual throughput has risen consistently and in Lam’s opinion this can be put down to a number of key factors that continue to drive business growth. “There are a number of factors that have contributed to our success since 1993,” he continues. “These include

BE Monthly | 205

373 hectares Size of YICT’s yard area

internal qualities that we possess as well as external factors, from the fact that Yantian Port boasts the longest contiguous berth in the region and strive to deliver excellent service based on state-of-the-art terminal facilities, IT systems and a skilled workforce, to our on-going strategy to serve megavessels incorporated in port construction, facility design and terminal management system. Furthermore, we cannot forget that Yantian Port represents the gateway to the Guangdong Province trade catchment area, one of the densest manufacturing regions in the world.�

Of course more recent years have also brought with them a wildly unpredictable economic climate. One by-product of this has resulted in shipping lines widening their efforts to reduce costs and achieve economies of scale. They have attempted to do so by deploying more mega-vessels, entering into more vessel sharing agreements with other companies, and consolidating levels of traffic at large ports. So while traffic volumes through Yantian Port have steadily increased, it has not been immune to an economic climate that has helped create several unique challenges for YICT that it needs to overcome. “The trend of deploying ever large vessels is increasingly becoming the norm, presenting

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YICT

a challenge to all terminal operators,” Lam states. “YICT, however, is well-positioned for the challenge. Not only are we physically capable of servicing mega-vessels, thanks to our technical expertise, operational efficiency, state-of-the-art systems, and skilled workforce but we are also able to provide these vessels with the fast turnarounds they demand.”

YICT’s ability to respond to changing

market conditions and customer demand not only shines through in its ability to sustain high traffic volumes, but also in the countless awards and honours it has been presented with over the years.

In 2005 it was presented with the award for Best Global Container Port of the Year for 2005-2006 by the Global Institute of Logistics (GIL) in London. What made this

“YICT has developed into one of the most innovative and technologically advanced container handling facilities in the world” BE Monthly | 207

“Looking ahead, we remain convinced that southern China is still one of the most dynamic regions in the global economy�

208 | BE Monthly

YICT particular award so special was that it meant that YICT was recognised by GIL as the first port operator to be awarded such an accolade, and it represented the first ever international award to be granted to a Chinese port.

In recent times YICT has been proud to accept a number of other titles and has been recognised as being among the top ten container terminals in China, the top six container terminals in intermodal services in China, and for its technical innovation in the utilisation of LNG tractors at the terminal to create sustainable tractor operations. The latter award was presented by the Container Brand of the China Ports Association.

One other award of particular note was presented to YICT in 2008. Presented by the World Health Organization and General Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic of China, the International Sanitary Port award is proof positive of the standards that YICT has achieved in its efforts to become a green operator.

“Care for the environment remains a core priority for us and as such we continually review our sustainability and green practices,” Lam enthuses. “As well as being a pioneer when it comes to the use of LNG to power our fleet of 260 container tractors, we have also

set out to reduce port emissions and save fuel through the use of electric power rubber-tyre gantry cranes (RTGCs). Today we have 150 of these RTGCs in use, as well as a further 19 hybrid RTGCs, which run both on both electricity and diesel, helping to reduce fuel and carbon emissions by 40 percent.”

YICT also considers itself to be something of a catalyst for community vitality. In this role it continues to contribute towards a number of worthy causes, including caring for the elderly within the community, offering summer camp placements for students from the rural areas of Southwest China’s Yunnan Province and organising summer internship programmes for local university students.

2013 has been another year of milestones for YICT, beginning on 8 January when it

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YICT officially handled its 100 millionth twentyfoot equivalent unit (TEU). Achieved in the space of 18.5 years, this feat set a new record in container port history. “This milestone follows YICT’s 2007 performance when we became the world’s first container terminal to reach an annual throughput exceeding ten million TEU,” Lam highlights.

“With “100 Million TEU and beyond” as our slogan, YICT is committed to overcoming all challenges and reaching new heights in the years to come.”

YICT followed up this achievement in July 2013 when it welcomed the inaugural call of the world’s largest container vessel, the 18,000 TEU Maersk Mc-Kinney Møller. This marked the beginning of a new phase for the port, which to date has seen approximately 95 percent of the world’s super mega-vessels with carrying capacity in excess of 10,000 TEU calling in on a regular basis.

“Looking ahead,” Lam concludes, “we remain convinced that southern China is still one of the most dynamic regions in the global economy, and that the port sector, as one of the key drivers of economic growth and a gateway for exchange and communication, will remain robust for the foreseeable future.

For our part, we will continue to harness our strengths as the preferred-port-of-call for super mega-vessels and constantly create customer values through service excellence and innovations.”

For more information about Yantian International Container Terminals visit: www.yict.com.cn

BE Monthly | 211

Riding the waves of change As Maersk Line’s Chief Operating Officer, Morten Engelstoft explains, despite being the largest container ship operator in the world, Maersk Group continues to steer itself forward into new areas of growth

written by: Will Daynes research by: Peter Rowlston

212 | BE Monthly

Maersk

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Maersk

F

or some companies their very name has come to be synonymous with their particular area of industry.

Think mobile phones or tablets and Apple springs to mind. For oil and gas it will be BP or Royal Dutch Shell, while mention of the fast food sector immediately conjures up images of McDonalds or Burger King. While these businesses are hugely different when it comes to what they do, what they share is the fact that their strong history and track records of success have made them the leaders in their field.

The same holds true for Maersk Group, arguably the most recognisable name in the global maritime world. Made up of four core business, Maersk Line, APM Terminals, Maersk Oil and Maersk Drilling, with Services and Other Shipping set to become its fifth core business unit from 2014, the group today employs around 121,000 people across 130 countries and generated some $59 billion in revenue in 2012 alone, a figure that is all the more astounding when one considers the challenging environment the group finds itself in at present.

“Our market as it exists today is unquestionably tougher than it has been in the past,” states Maersk Line’s Chief Operating Officer, Morten Engelstoft. “At present we are witnessing a trend whereby our more mature markets are experiencing flat development, while emerging markets are slightly better, giving us a global annual growth rate of between three and four percent.”

While growth of any kind is of course welcomed, it does pale in comparison to the tenplus percent yearly growth that the industry

BE Monthly | 215

NUTEP – Russian growth success story NUTEP (situated in Novorossiysk and owned

by DELOPORTS) is the most modern container terminal in the South of Russia • Constructed greenfield in 2004-2005 with several completed expansion projects since inception • Modern technological equipment and infrastructure • Own 5-track railway park • Throughput capacity – 350 thous. TEUs • Container turnover in 2012 – 215 thous. TEUs • 32% of container turnover of Russian ports in the Azov and Black sea basin • Plans to launch construction of a unique deepwater berth for ocean container vessels

DELOPORTS Tel.: +357 25 591 501 E-mail: deloports.com E-mail: post@deloports.com www.deloports.com

Maersk regularly experienced in the deloports years between 2002 and DELOPORTS owns and operates container, grain, oil 2007. Nevertheless, where products terminals and a bunkering services company in there is growth today there Novorossiysk. Total turnover in 2012 - 4.7 million tons. is opportunity, particularly if NUTEP is DELOPORTS’ specialized container terminal you happen to be the largest (throughput capacity - 350 thous. TEUs), which was container vessel operator built greenfield in 2000’s and thus benefits from modern equipment and infrastructure, offering a unique client on the planet. service. Execution of NUTEP’s development plans will secure “Emerging markets are its leading positions in the Russian container market. definitely the source of any MAERSK has been a partner for NUTEP since 2006. In 2011 green shoots we are coming MAERSK launched ECUMED via NUTEP - its first direct link across at the moment,” between Latin America and the Black Sea. Engelstoft continues, “with www.deloports.com Latin American, African and Intra-Asia freights all experiencing strong growth characteristics in recent years. Meanwhile, what we term our back haul business, meaning business moving from regions such as Europe into China, is also picking up well, which is a reflection on the fact that China is importing more now than it has previously.”

The reality of the situation that the container industry finds itself in today is that it is a highly fragmented market in which a vast number of players are essentially competing to offer very similar products and services. Understanding the necessity

“Maersk Group today employs around 121,000 people across 130 countries” BE Monthly | 217

$59 Billion In revenue achieved by Maersk in 2012

to stand out amongst such a crowd Maersk has focused a great deal of effort on the service it provides its clients by creating its own Customer Charter. Made up of eight key components of services that its customers themselves highlight as being most important to them, the Customer Charter provides a transparent overview of how the business is performing in these areas and what its long term targets are for improving itself further.

Another area in which Maersk is very much taking the lead is energy efficiency. The drive towards this actually began in 2007 when the group set itself a target of reducing CO2 emissions per container kilometre by 25 percent before 2020. Remarkably this figure was actually achieved eight years ahead of schedule in 2012. Maersk Line would then go on to raise the bar further by setting itself a 40 percent reduction target by 2020.

One of the more impressive examples of Maersk’s work in this field is without doubt its new Triple E class of vessels, launched in July 2013. Measuring 400 metres in length and boasting a capacity of 18,000 TEU, the Triple E vessel is the largest ever built. It will also represent one of the most energy efficient vessels on the planet, reducing CO2 emissions by around 50

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Maersk

percent per container moved, compared to the industry average CO2 performance on Asia-Europe trade routes.

“In many ways the Triple E vessel showcases the way Maersk Group undertakes a continuous process of innovation when building for the future,” Engelstoft enthuses.

“It also highlights how we do not shy away from ploughing considerable amounts of capital into better, more fuel efficient vessels,

what with each Triple E vessel representing $185 million in investment, $30 million of which has been spent on environment and efficiency improvements.”

By mid-2015 Maersk expects to have received delivery of the 20 Triple E vessels it has on order, each of which will be periodically deployed into the group’s network where they will replace older vessels that are operating along the Asia

“Measuring 400 metres in length and boasting a capacity of 18,000 TEU, the Triple E vessel is the largest ever built” BE Monthly | 219

“This methodology of building upon Maersk’s achievements will ultimately see it further improving on the successes of the Triple E in the years ahead”

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Maersk to Europe trade lines where much of the group’s business is currently emanating from.

Interest in these massive new additions to Maersk’s fleet has been impressive.

More than 250 customers and government officials, and thousands of people, have participated in events in the maiden voyage ports of call; however Maersk’s attention is already turning towards applying the Triple E’s fuel and energy efficiency learnings to other Maersk Line vessels, and replicating it across the group’s different business divisions.

“Looking at the Triple E it should be immediately clear that they are built upon industry leading experience, innovation and confidence in our abilities,” Engelstoft says. “A good example of this is the vessel’s Waste Heat Recovery System, the installation of which costs approximately $10 million per vessel alone. The purpose of the Waste Heat Recovery System is to reduce the engine’s need for fuel and therefore its CO2 footprint. The effect is a reduction in the engine’s fuel consumption and CO2 emissions by approximately nine percent.”

This system was actually developed and perfected on earliest vessel classes, before being upgraded to become a key feature of the Triple E’s energy efficient design. It is this methodology of building upon Maersk’s achievements that will ultimately see it

further improving on the successes of the Triple E in the years ahead.

A separate development that has occurred in recent months took place in June of this year. It was then that news broke that Maersk Line, MSC Mediterranean Shipping Company and CMA CGM has agreed, subject to regulatory approval, to establish a long term operational alliance on East-West trades, called the P3 Network.

“If and when we get regulatory approval, we will operate a joint network of approximately 250 vessels with a total capacity of around 2.6 million TEU,” Engelstoft highlights. “The creation of this network will benefit all parties by providing increased cost efficiency and will also provide our customers with better

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Maersk

$185 Million The amount invested in each Triple E Class vessel

frequency, increased coverage, lower CO2 footprint, and ultimately a better product.”

While 2013 will go down as a year of big achievements for Maersk Line; longer term we know that the coming months will remain challenging, with annual market growth expected to reach between four and five percent.

One of the primary reasons for this will be the increase in vessel capacity set to be delivered throughout the world’s major markets. This trend however is expected to subside during 2015, meaning that the sector does still possess encouraging growth potential in the long-term.

“Our own business approach revolves around the fact that we want to grow with the market, retaining our market share,” Engelstoft concludes. “In the meantime we will continue to work to improve our bottom line by working to reduce our cost levels to among the lowest in the industry, and to deliver best-in-class customer service, all while carefully watching how the industry performs so that we can grow accordingly as the environment evolves.”

For more information about Maersk visit: www.maersk.com

BE Monthly | 223

224 | BE Monthly

Eti Aluminyum

Among the integrated elite Since it was privatised is 2005, Eti Aluminyum has channelled a great deal of effort and capital into a comprehensive modernisation programme that is now set to bear fruit

written by: Will Daynes research by: Abi Abagun

BE Monthly | 225

T

he world’s second most used metal after steel, aluminium is blessed with a host of positive characteristics that have made its use invaluable to the modern world.

The most common metal found in the earth’s crust, it possesses a remarkably low weight-tostrength ratio, high resistance to corrosion, is easy to shape and is 100 percent recyclable.

Despite aluminium’s importance to several multi-billion dollar sectors, including the aerospace, transportation, medical and construction industries, surprisingly there remain only a handful of integrated aluminium producers in existence today. One of the elite few is Turkey’s Eti Aluminyum.

Eti Aluminyum was originally established in 1962 by the Turkish government, with 15 years passing before it reached full capacity production in 1977. More recently the company embarked on a transition into the private sector when it was acquired in 2005 by the Turkish construction, energy and mining group Cengiz Holding. This event kick started a comprehensive modernization process for the company, one that continues to this day.

Eti Aluminyum is Turkey’s only producer of liquid aluminium and it is the country’s only fully integrated producer which takes in untreated ore downstream and then has the capacity to fulfil every process requirement to the finished product. The company has its own bauxite ore mines located just 20 kilometres away from the factory and this is the starting point of its operations—the chemistry of aluminium means it is always found combined in other minerals, most frequently bauxite ore.

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Eti Aluminyum

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CYTEC A leading supplier of chemical reagents to the mining industry for nearly 100 years, Cytec enables customers to improve productivity and reduce operating costs while meeting complex economic, environmental and metallurgical challenges.

As the demands of the industry are changing, Cytec is partnering with mining companies around the world to deliver reagent solutions for the recovery and production of copper, alumina, gold, nickel/ cobalt, polymetallic ores and many other metals and minerals.

Cytec Industries provides the alumina industry with value-adding, efficiencyenhancing technology for all stages in Bayer Process alumina production. Cytec’s technological innovations for alumina processing began with programs for the solid-liquid separation processes and the introduction of synthetic polyacrylate flocculants to replace starch.

Cytec developed the HX flocculants over 20 years ago and since then has remained the premier supplier to the mining industry.

Our flocculants are constantly improved to better meet the industry’s requirements and CYFLOC® ULTRA Series, is the latest advancement in flocculant. The performance benefits includes: • Allows difficult to handle bauxite (high silica >5%) to be processed economically.

• Process variability is reduced due to steadier operation in the clarification section

230 | BE Monthly

• Overflow suspended solids are reduced by 50% or more over polyacrylate flocculants, resulting in significant improvements in filtration.

• Gives superior results over existing HXPAMS at reduced dosage requirements • Rapid settling rates allow for high throughput in settler operation.

• High mud densities combined with improved rheological properties of the underflow solids results in less torque on the thickener rake system.

• If the product becomes frozen its performance is fully restored when thaw and mixed All of Cytec’s initiatives in alumina are supported by a global team of field engineers - and a vertically integrated supply chain - to support today’s programs and technologies with an eye on future industry needs. www.cytec.com

Eti Aluminyum

Hot rolling mill

Using the technology of today there are two main production phases. These are bauxite primary ways of producing aluminium, the mining, aluminium production, liquid first being from ore, creating what is known aluminium production, the alloying and as primary aluminium, and the other being casting of the liquid aluminium, and the from scrap, creating secondary aluminium. last but by no means least, the production Eti Aluminyum’s SeydiĹ&#x;ehir Aluminium Plant, of semi and/or end products through the located in the Central Anatolia region of Turkey, use of the aforementioned casting, rolling is an integrated primary and extrusion processes. aluminium production plant.

Today Eti Aluminyum From here the company is provides employment for more than 1,300 individuals, able to convert aluminium while its plant possesses the ore into metallic aluminium capacity to process some by first processing the ore and then shaping it through 460,000 tonnes of bauxite ore Processing capacity the use of casting, rolling and each year and 60,000 tons of at Eti’s Seydisehir aluminium per annum. There extrusion systems.

Aluminium Plant of is also an on-site casting The integrated production bauxite ore per year facility with a capacity of process itself consists of five

460,000 tonnes

BE Monthly | 231

75,000 tons a year. Eti Aluminyum produces primary and cast aluminium products as well as wet and dry aluminium hydroxide, calcined alumina and a small quantity of high Mg-alloyed plates. In addition, the company’s facilities are also equipped to handle the production and commercial sale of aluminium hydrate, alumina, and aluminium sulphate and vanadium sludge.

The aluminium hydroxide product is used by aluminium sulphate, poly aluminium chloride (PAC), zeolite and other special hydrate producers. The metallurgical alumina product is used mainly by the smelter department internally, as well as by refractory, ceramic and other special alumina producers. The casting products consist of re-melt ingot, alloyed and non-alloyed ingots, billets and slabs. Here, re-melt ingots are used by billet and slab producers while the alloyed and non-alloyed ingots are used by piston producers, cable manufacturers, etc. Billets are used by extrusion producers and slabs are used internally by the rolling plant. Meanwhile, the high Mg-alloyed plates that the plant produces are typically used by machinery builders, ship builders and the defence industry.

Since its privatisation, modernising the legacy of Eti Aluminyum’s plant and related

facilities has been a key priority. While its existing infrastructure has undoubtedly served the company well for almost 40 years, a comprehensive upgrade was nevertheless of paramount importance if it was to be able to increase equipment and process efficiency, plant productive, improve work conditions and safety, and reduce emissions.

Making all of this a reality was always going to be quite the challenge and it is one that the

“Machinery used throughout Eti Aluminyum’s operations is being systematically brought into line with new technology and regulations” 232 | BE Monthly

Eti Aluminyum

company is continuing to face meeting around 15 percent of up to as we enter 2014. As Turkey’s annual aluminium well as upgrading all of the demand. Therefore it stands equipment and infrastructure to reason that many within relating to its two methods the country are waiting Of Turkey’s annual excitedly for the company’s of aluminium production, aluminium demand machinery used throughout modernisation plans to is provided by Eti Eti Aluminyum’s operations is bring about an increase Aluminyum being systematically brought in its plant’s production into line with new technology output from 60,000 to and regulations, while great 75,000 tonnes of aluminium progress continues to be made towards the by early 2014, a target that appears well construction of a new coal powered steam within its reach. boiler plant and the installation of a more modern smelter. Both the latter undertakings For more information about are expected to be completed in 2014.

Eti Aluminyum visit: Eti Aluminyum’s Seydişehir Aluminium www.etialuminyum.com Plant is estimated to be responsible for

15%

BE Monthly | 233

234 | BE Monthly

Zambeef

Feeding a nation

Zambeef has grown from very humble beginnings to become one of the largest integrated agri-businesses in Zambia

written by: Will Daynes research by: Jeff Abbott

BE Monthly | 235

Zambeef

W

ith limited capital, the company known as Zambeef was incorporated in 1994.

Employing 60 staff, slaughtering 180 cattle per month in a rented abattoir, delivering meat via a single Land Rover and selling it through two rented butcheries, it was very much a small-scale operation to begin with. Nevertheless, through a combination of organic growth and acquisitions, the company went on to become one of Zambia’s largest agri-businesses, achieving a compounded organic growth rate of over 20 percent in real terms between 2003 and 2008 alone.

Today boasting annual revenues of approximately US$255 million and providing employment for more than 5,500 people, the Zambeef group is principally involved in the production, processing, distribution and retailing of beef, chicken, pork, milk, dairy products, eggs, edible oils, stock feed, flour and bread. The group also has large cereal row cropping operations, principally maize, soya beans and wheat, with approximately 8,350 hectares of row crops under irrigation and 8,650 hectares of rain-fed/dry-land crops available for planting each year. Furthermore, the company is today is the process of rolling out operations into Nigeria and Ghana.

The scale of Zambeef’s current operations is truly staggering. In addition to slaughtering some 60,000 cattle per year it is also responsible for producing approximately eight million litres of milk, 20 million eggs and 120 million tonnes of feed per annum, while also processing 3.5 million chickens and 90,000 hides.

BE Monthly | 237

....keeping Zambia moving Established in 1992, Autoworld has positioned itself as one of the leading companies in the motor trade industry in Zambia with eleven branches throughout the country.

Autoworld is a retail store and fitment centre catering to the needs of any vehicle or boat with an extensive range of quality guaranteed products and services offering a one stop shopping experience.

We primarily operate in the replacement automotive parts industry with a focus on product ranges from accessories through to lifestyle equipment. Autoworld are dealers in both automotive and marine products from a wide range of global manufacturers.

Our product & service range offered includes: • Motor Vehicle Parts • Accessories • Tyre Specialists • Garage Equipment

• Fitment Centre • Boats • Marine Engines • Marine Accessories

Tel: +26 0211 237716/19 | Fax: +26 0211 223323 Email: info@autoworldzambia.com | www.autoworldzambia.com

Zambeef While the size of the autoworld business has changed Established in 1992, Autoworld has positioned itself as dramatically since the midone of the leading companies in the motor trade industry 1990s, its vision and strategy in Zambia with eleven branches throughout the country. remains virtually the same, Autoworld is a retail store and fitment centre catering to that being for Zambeef to be the needs of any vehicle or boat with an extensive range seen as the most accessible of quality guaranteed products and services offering a one stop shopping experience. Our vision at Autoworld is to and affordable quality protein keep Zambia moving by supplying a staggering range of provider in the region, and vehicle, marine and lifestyle products. to increase the efficiency www.autoworldzambia.com and capacity of its primary production facilities.

To achieve this, the Zambeef group continues to pursue a vertically integrated business model, from primary production to processing and distribution to retailing the finished products in a value-added form directly to the end consumer through its own extensive retail network. The vast majority of Zambeef’s food products are retailed directly to the end consumer through Zambeef’s extensive retail network. Indeed the company has one of the most impressive distribution and retail footprints in Zambia, consisting of 91 retail outlets, three wholesale centres, six fast food outlets and 20 Shoprite butcheries.

The company’s three wholesale centres were opened in 2011 in order to attract

“Zambeef group continues to pursue a vertically integrated business model” BE Monthly | 239

Versapak Zimbabwe began operating in Harare in 1995.

The company is the leading manufacturer and distributor of expanded polystyrene and printed rigid plastics in the country.

Product Range Foam Trays & Boxes for •Butcheries •Fruit & vegetables •Fast Food available in both plain and printed varieties Rigid Products •Dairy Product yoghurt cups •Yeast containers•Disposable cups Bottle and Jars •Petroleum Jelly jars and closures •Beverage containers Other products •Clingfilm for both industrial and domestic use • Vacuum bags •Fomopads -which are used to absorb excess moisture in packaging

We always strive to bring the best products to the consumer by using the latest advances in technology such as in our “Ultra-zorb” range of products that eliminate the use of the traditional fomo pad.

We recognise the need to care for the environment and are actively involved with Environmental Agents, Non – Governmental Organisations and Local Authorities.

We have a wide network of distributors who offer their customers professional service and advice as well as competitive prices. We also sell directly to the public.

For a list of distributors please visit our website www.versapak.co.zw

Zambeef business from the large commercial sector in Zambia.

Versapak Zimbabwe was established in 1995 and is the Elsewhere, Zambeef is leading manufacturer and distributor of Plastic Packaging in continually investing in the country. Our company has a proud history of involvement upgrading and refurbishing in the food packaging industry and offers high quality existing stores as well as products that meet both local and export market demands for opening new retail outlets food grade packaging of the highest standards.

Versapak supplies the Zimbabwean market and exports each year. It also operates one products to Zambia, Malawi and DRC. of the largest transport and www.versapak.co.zw trucking fleets in Zambia, which are serviced and maintained at its own workshop.

One particular quality that the business possesses that assists it in standing out amongst similar enterprises in the region is its commitment to the continuous improvement of its environmental and social management. To this day the company continues to subscribe to the United Nations Millennium Development Goals, while also actively assisting and supporting worthy causes, activities, organisations and charities.

Among the important aims that Zambeef supports is the eradication of extreme poverty and hunger, achieving universal primary education, the improvement of basic health care, and the fight against HIV/AIDS, malaria, TB and other diseases.

Zambeef has also signed up to an

Versapak Zimbabwe Pvt Ltd.

$255 million The company’s approximate annual revenue

BE Monthly | 241

UNITY Quality and Service

Unity group of companies based in Zambia are experts in packaging and distribution with a strong subsidiary specializing in work-wear and clothing. “Unity� group of companies is the preferred supplier to the Zamanita Group of Companies, Zambian Breweries, Tradekings Group and other leading biscuits and beverages manufacturers in Zambia VISIT US ONLINE

www.unity.co.zm UNITY | Ulengo Road, Ndola, ZAMBIA. Phone: +260-212-650222 | Fax: +260-212-650131 | Email: info@unity.co.zm

Show the world what your company has to offer with our tailored packages

Seen www.bus-ex.com

Zambeef

Environmental and Social Action Plan, which for Zambian citizens and local pension funds requires the company to achieve a number of to buy shares in the company. With most local international standards on the environment, pension funds as shareholders in Zambeef, health and safety, and social responsibility. almost every full-time Zambian employee The most recent independent consultant benefits from the success of Zambeef, which reports stated that Zambeef continues to make ensures the company helps with wealth good progress in delivering the approved creation within Zambia.

Environmental and Social Action Plan.

Further to this, Zambeef has a number of Perhaps not surprising, given its size, operations in largely rural areas, and in many Zambeef is one of the largest employers in the of these rural areas the company is one of country. It also boasts a strong the largest business partners development record, being and employers, through one of the largest investors the procurement of locally in the agricultural sector in produced raw materials, Zambia over the last ten years. resulting in povert y The company’s listing on alleviation and sustainable Employees working the Lusaka Stock Exchange in development of these for Zambeef today rural economies.

2003 provided an opportunity

5,500+

BE Monthly | 243

Zambeef Examining what the immediate future holds for Zambeef it is clear that the company’s aforementioned integrated business model provides it with strong foundations for growth, foundations including the underpinning of margin capture and value-add, the security of its supply chain, and the reducing of risk and earnings volatility.

Several recent large capital investments have certainly helped showcase the company’s determination to grow further still. These have included successfully integrating crop production to its Mpongwe farm ahead of budget, and the upgrading and expansion of its activities at uts subsidiary Zamanita, where it has doubled its crushing capacity.

Targeted re-investment on the other hand is helping to drive Zambeef’s organic growth, specifically through the increasing of its production and efficiencies in its stock feed, dairy and milk processing divisions, and by adding additional retail and wholesale outlets where they are required. All of this combined is expected to see the company return to positive net cash generation over the coming year. This will enable Zambeef to start paying meaningful dividends from 2014.

With the company well placed to achieve its long-term ambition of becoming one of the largest food producers in the region, it is understandable why the board of Zambeef looks forward to the future with confidence.

For more information about Zambeef visit: www.zambeefplc.com

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Industrias Correagua

A proud Panamanian business Industrias Correagua’s quality products and passionate approach to each project has made it one of Panama’s most important companies

written by: Will Daynes research by: Vincent Kielty

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family owned and run business, Industrias Correagua was founded almost 60 years ago by one Juan Amado. From its inception the main activities of the company included the fabrication of steel products such as roofing material, gas tanks, and speciality projects such as silos, large tanks, flagpoles and bridges, as well as construction. What has remained consistent over the last six decades is the company’s on-going desire to be innovative, utilise new technologies,

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and identify and harness the potential of new and emerging products.

Today the company is run by the second and third generations of the Zanetti and Amado family and under their leadership Industrias Correagua has branched out and diversified into new production lines such as steel structures, double wall underground tanks and storage racks. In keeping with the company’s heritage it continues to put the newest techniques available to use, particularly in the design and fabrication of speciality steel structure projects. These

Industrias Correagua

range from airports and hangars to large capacity tanks and high rise buildings.

Industrias Correagua’s products and services include, but are not limited to, the fabrication and commercialisation of steel products such as roofing materials and steel products such as rebar and wide flanch beams, water storage tanks ranging from 500 to 1,000,000 gallons in capacity, above and below ground fuel tanks, and the exporting of double jacket underground tanks. Further to this, the company specialises in the design, fabrication and commercialisation of

storage rack systems, and possesses a range of additional products such as 25 pound residential gas tanks, 50 gallon drums, guard rails and wire mesh.

Being a family owned and operated business, Industrias Correagua’s approach to each and every task is considered highly personal with special care taken with all of its clients, regardless of their size. These clients soon discover that their projects are safe in the hands of highly qualified design and construction engineers, working for a company that strives, wherever possible,

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“Industrias Correagua’s approach to each and every task is considered highly personal with special care taken with all of its clients, regardless of their size”

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Industrias Correagua to use environmentally conscious procedures.

Without question one of the primary drivers of growth for the company today is the volume of projects currently underway across Panama. These include the well documented expansion of the Panama Canal, the introduction of a Metro line and the continued expansion of the mining sector. What links these vastly different areas of development is that each requires the support of qualified, reliable suppliers, and Industrias Correagua is working hard all the time to meet all the necessary qualifications needed to participate in such projects.

With these projects in development, and many other in the pipeline, it is understandable why the company foresees considerable growth to come in the years ahead. Panama is currently in an enviable position whereby the construction industry is growing, major cities are expanding and there are large numbers of immigrants arriving in the country, bringing with them new skill sets and experiences.

This latter trend is particularly important for Industrias Correagua, which believes that human resource is a vital component to its success, and as such is constantly looking to strengthen that aspect of the business.

Meanwhile the company is continuing

to expand its sales reach and increasing its exportation capacity, all while providing a healthy working environment for all of its employees.

A proud family business with a rich legacy, Industrias Correagua is similarly proud for being recognised as a leading company in what is a service orientated country, one that is committed to not only its own sustained growth and development, but also the wellbeing of its partners and clients.

For more information about Industrias Correagua visit: www.correagua.com

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Matpro

the professional approach In little more than four years Matpro has grown into a vital and respected supplier of services and products to Solwezi’s ever expanding construction sector

written by: Will Daynes research by: Stephen Vivian

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atpro commenced operations in 2009, hiring out construction machinery to the mines operating in Solwezi, Zambia and their respective contractors. In the four years since, the company has built up its fleet to include a range of machines including an excavator, grader, telehandlers and concrete mixers of various sizes, in addition to the commercial vehicles that are available for customers to

hire, including tippers and low-bed trailers.

In has also taken great strides in ensuring that is constantly retains enough spare parts for its aforementioned vehicles and machines. This of course allows its customers to avoid the negative impact of down-time that can occur in the event of a breakdown or during periods of maintenance and repairs. It is also now a distributor for BASF Chemicals in Solwezi, products that include concrete hardeners, retarders and other construction related chemicals.

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As the business has expanded it has been able to diversify into the supply of other vital products including ready-mix concrete and specialist construction chemicals. The establishing of its own on-site concrete batching plant in Solwezi means it is now able to supply this ready-mix product in large quantities at short notice. Behind the scenes is a highly skilled and dedicated workforce that understand the business and

whose collective knowledge allows Matpro to provide concrete solutions for any project.

By building itself on strong foundations of honesty and transparency, Matpro has been able to count on repeat business from trusted customers, many of whom are more than happy to take possession of the company’s equipment on long-term contracts. Of course it helps that Matpro also endeavours to

“By building itself on strong foundations of honesty and transparency, Matpro has been able to count on repeat business from trusted customers�

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Matpro

provide a consistently high level of customer service and competitive prices.

These qualities have become ever more important in recent years as Solwezi welcomes in an increasing number of service providers keen to prosper from the region’s mining operations. The remote location of the township does conspire however to present several unique challenges for these providers, not least the logistical hurdles that make speed of delivery a hugely important area of consideration for construction projects.

For Matpro this goes back to the need to limit machinery and equipment downtime, something that it is always looking to improve in order to minimalize the inconvenience such events can cause its clients.

In its own quest to grow, Matpro has recently undertaken a major expansion

programme within its concrete supply unit.

This has seen the company purchase a number of bulk tankers and concrete mixers, and upgrade several of its existing commercial vehicles and machinery.

The expansion of Solwezi has meant the demand for ready-mix concrete, be it from smaller construction projects or large scale undertakings, has reached new highs. As this scope of work continues to grow alongside an increasing diversity in construction projects in the area, it is Matpro’s aim to provide a one-stop solution for its customers’ concrete requirements.

For more information about Matrpo visit: www.jaidsgroup.com

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Jaids

Quality in abundance From humble beginnings as a retail centre for stationery and electrical items, Jaids is today a household name throughout the township of Solwezi, Zambia

written by: Will Daynes research by: Stephen Vivian

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ocated at an elevation of some 1,235 metres above sea level, Solwezi is the capital of the North Western Province of Zambia and home to approximately 65,000 inhabitants. Today the main industry of the town is most certainly copper mining, what with it being home to both First Quantum Minerals’ Kansanshi Mine and Equinox Minerals’ Lumwana Mine. However, before either of these mines had even opened, Jaids was established in 1999.

The company began life by selling a very basic range of stationery, household goods and general hardware items. It was in the years that followed that Jaids grew into a sizeable business with a current stockholding of some 6,000 items, a figure that continues to grow steadily. Today the company occupies premises measuring over 4,000 square feet and is a stockist of a number of notable brands, including Cobra, Gedore, Husqvarna, Defy, HP and Phillips.

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Specific hardware items available from Jaids include power tools, generators, water pumps, plumbing fittings and pipes, steel and specialist tools. Among the general items on offer one will find a series of white goods, office furniture, office stationery, printers and computers, laptops and toners, other electrical items and household goods, including bedding and furniture.

With the largest range of stock anywhere

in Solwezi, stock that it is able to source from all four corners of the world, it is easy to see why Jaids is very much regarded as a onestop shop for its customers’ needs, one which believes in quality, reliability and customer service, and has a pricing structure in place that reflects the quality guarantee it places on each individual item.

The business has always strived to maintain a high degree of honesty and integrity with

“In the years that followed Jaids grew into a sizeable business with a current stockholding of some 6,000 items, a figure that continues to grow steadily�

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Jaids

all of its customers. Its approach to its product range is flexible and Jaids always listens to what customers want. Having accordingly built up a diverse stock range, it is now better positioned than ever to stock very specialist items to meet individual customer demands.

Due to Jaids’ flexibility, the company has been well positioned to cater for the needs of the mines, contractors, and general public that have brought business to the region.

Understandably, as the town of Solwezi continues to grow Jaids has witnessed a steady increase in competition arriveing in its vicinity. Nevertheless, by staying true to its ethos of integrity, and ensuring that it always is in possession of quality products and sufficient stock, it has managed to consistently provide customer satisfaction.

A by-product of this allows the company to be able to continually bring new brands and products to its customers, thus staying one step ahead of the competition.

Going forward, Jaids plans to extend the size of its premises, while also introducing an increasingly specialised range of power tools, general hardware items and electrical items to meet the demands of Solwezi’s growing IT sector. The company realises that it needs to cater for needs of the town’s expanding and diverse population in order to remain the mainstay of the region that it has become.

For more information about Jaids visit: www.jaidsgroup.com

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