BE.Monthly

ACHIEVING BUSINESS EXCELLENCE ONLINE

MONTHLY EDITION June 2013

INCLUDING

goldcorp marlin mine: avis uae: petroperu:

perseus mining:

A PROMISE

IS A PROMISE Developing under-explored mineral deposits in West Africa

Included The BE Mining Directory showcases leading mining organisations from across the world, ranging from big corporations to junior mines and their supply chains.

Be seen throughout our portfolio of magazines: •BE Mining Directory •BE Mining •BE Weekly •BE Monthly •

Go to page 282 to see this month’s listing To find out how to get involved contact: vincent@bus-ex.com

business excellence Design Matt Johnson Art Director mjohnson@bus-ex.com Louise Culling Production Designer lculling@bus-ex.com

business Richard Turner Director of sales rturner@bus-ex.com Vince Kielty Director of Editorial Research vkielty@bus-ex.com Sharon Rooke Administration & Operations srooke@bus-ex.com Matt Day Head of technology mday@bus-ex.com Andy Turner Chief Executive aturner@bus-ex.com

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info@bus-ex.com

editorial John O’Hanlon Editor

John has contributed to Business Excellence since its inception: he joined the in-house editorial team in February 2013. johanlon@bus-ex.com

Will Daynes Editor

Will has been a business writer for three years. He joined the Business Excellence team in September 2012. wdaynes@bus-ex.com

CONTRIBUTORS George F. Brown, Jr.

George is the CEO and cofounder of Blue Canyon Partners, Inc., a consulting firm working with leading companies on growth strategy.

charlie mayes

Charlie has more than 22 years’ experience in the IT services industry covering full life cycle development and systems integration projects.

Joseph and JoAnn Callaway

Coauthors of the New York Times bestseller Clients First: The Two Word Miracle and founders of the real estate company Those Callaways.

michael davies Infinity Business Media Ltd

Suite 22, St Francis House, Queens Road, Norwich, NR1 3PN Tel: +44 (0) 203 137 7100 Fax: +44 (0) 1603 666466

www.bus-ex.com The content of this magazine is copyright of Infinity Business Media Ltd. Redistribution or reproduction of any content is prohibited.

Michael Davies is from London Offices.

exact software

Exact Software develop industry-specific on-premises, hosted and cloud-based solutions in a wide variety of industries. Ranging from manufacturing, wholesale & distribution to professional services and accountancy.

© Copyright 2013 Infinity Business Media Ltd.

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features

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12

12 comment: retention

How can businesses retain talent?

In a tough trading climate it’s essential to hang on to good people. Yet in a recession it isn’t always easy to reward loyalty with increased pay.

16 Management

Remote control

22

Home working cut at Yahoo – flexible work backlash or just a storm in a teacup?

22 supplychain

You Don’t Know What You’ve Got Till It’s Gone When changing suppliers, the grass may seem greener on the other side. But in long term supplier relationships it’s the hidden, and less obvious, benefits which add value.

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42

44

34 strategy

Sales & Operations Planning: More than forecasting

S&OP is a hot topic for wholesale companies, here we discuss what it is, and how it can drive performance.

44 strategy

truth pays

Most us were taught as children that ‘honesty is the best policy,’ but would George Washington and Abraham Lincoln make it pay in today’s business world?

52

52 exec insight: Charles Siwawa

Creating a legacy

Charles Siwawa, CEO of the Botswana Chamber of Mines, discusses the positive changes he has witnessed within the mining industry, what motivates him and the legacy he hopes to leave behind.

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business showcase

56

Mining & Minerals: 56 Perseus Mining A PROMISE IS A PROMISE

74

84

West Africa still hosts mineral deposits that for one reason or another have remained underdeveloped: for certain Australian prospectors they became an obsession that is now paying off.

74 Namibia Diamond Trading Company Bright shining light

A key part of the economies in southern Africa, diamonds are more than just another resource mineral.

84 Botswana Chamber of Mines (BCM)

Working towards excellence The vital role that the Botswana Chamber of Mines (BCM) is playing in helping to further develop the country’s rapidly expanding mining sector.

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contents

92

92 Goldcorp - Éléonore mine partnership in northern Quebec

Goldcorp’s Éléonore gold mine is paying far more than lip service to the principles of stakeholder consultation, community benefit and local content.

104 Osisko Mining Corporation The golden touch

112

Osisko’s Canadian Malartic mine continues to go from strength to strength, as its first quarter results clearly highlight.

112 OSSA

Tunnel vision Technical director, Íñigo Núñez Blanco discusses how international expansion and the adopting of innovative technologies have been key to OSSA’s growth.

special focus:

goldcorp - marlin mine

118

an in-depth look into goldcorp’s marlin mine from its operations to its sustainable developmet

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business showcase

162

162 New World Mining Corporation (NWMC) Mexico’s mining masters

Priding itself on the logistical superiority and quality products, NWMC is a key supplier of iron ore and iron ore pellets to the demanding international market.

170 Collahuasi

Copper from the high Andes

180

The giant Collahuasi open pit operation in northern Chile is the world’s fourth largest copper mine: it aims to be a model for other operators in operational excellence, social responsibility, and safety

180 Asian Mineral Resources A first for Vietnam

The Ban Phuc nickel mine represents a new industry for Vietnam, and is perhaps the first of a number of nickel projects to be developed by Asian Mineral Resources.

188

188 Tridum e-Security LLC Safe and secure

Tridum e-Security is one of Mongolia’s leading providers of security and infrastructure services and solutions.

190 Toro Energy

Fuel for the future

152

Toro Energy is emerging as the first company to commence uranium exports from Western Australia.

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contents

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oil & Gas: 200 Petroperu

Embracing the modern way The Talara Refinery Modernization Project is Petroperu’s largest undertaking, the results of which will contribute greatly to the sustainable economic development of Peru.

212

212 Les Gaz Industriels Limited (LGI)

222

The desire to diversify

Managing Director, Jérôme Commins discusses LGI’s diversification over the years and its plan to expand into Africa’s emerging markets.

222 Chantier Davie

More than shipbuilding More than just Canada’s largest shipbuilder – more than any kind of shipbuilder: its ability to provide end-to-end turnkey solutions and its strategic location makes Davie an ideal partner for a range of industries.

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business showcase

232 Transport & logistics: 232 KAA

AIRPORT ON THE MOVE Keeping up with the economic growth in Kenya and the growing importance of its flagship Jomo Kenyatta International Airport (JKI) as a hub for the East Africa region.

242

242 Avis UAE

Total Transportation Avis UAE is so much more than the leading car rental business in the Emirates, built on Avis core values while developing a business model tailor made for its market.

telecoms: 250 MTN

Where others fear to tread

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MTN specialises in going where it is most needed – anything less like a ‘me too’ telecoms provider would be hard to imagine: it is a strategy that is paying off in terms of growth, most of it driven by innovation.

contents

food & drink: 258 General Printers Ltd (GPL)

The perfect package

Managing director, Ketul Tanna, reveals the secret behind GPL’s success within the FMGC sector and its plans for imminent expansion across Africa.

258

266 Unique Dairy Products Ltd Keeping their cool

An award-winning manufacturer and supplier of hard and soft ice cream, frozen novelties, frozen yogurt and related ice cream products.

manufacturing: 274 Er-Bakir

274

Mixing knowledge with quality Er-Bakir has come a long way in three decades.

BE Directory 282 h logistics

THE POWER TO DELIVER ON TIME ANYWHERE IN THE WORLD

284 muchina engineering supplying mines

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How can businesses retain talent? by: Michael Davies

comment: retention

I

n a tough trading climate it’s essential to hang on to good people. Yet in a recession it isn’t always easy to reward loyalty with increased pay. Here are some other ways businesses can retain talent.

1. Make work fun This may come as a shock but studies have shown happy workers are more productive than miserable staff. They are also less likely to leave. Not only that but they become great ambassadors for the company telling everyone they know just how cool their workplace is.

Companies such as Google, Apple and Facebook have all traded on their image as hip places to work with astonishing success.

You may not be a technology giant but that doesn’t mean your office can’t be cool too.

There are limits though: a pinball table is ok as long as the staff don’t play on it all day. Remember you still have clients to keep happy.

2. Invest in your staff Good team members will show an interest in your business. Nurture that and

they will help you to grow.

Training providers offer some great deals at the moment so there are no excuses for not investing in your best people.

3. Free tea, coffee and biscuits This is such a simple thing to offer and it doesn’t cost very much at all but it’s amazing how many firms charge their staff for basic refreshments such as tea and coffee. If you push the boat out and invest in some chocolate biscuits they will love you forever.

4. Extra paid leave Reward long serving staff with extra annual leave when they reach milestones such as five, 10, 15 and 20 years with the company.

As their experience grows they should become more and more useful to your organisation and so little overall productivity should be lost. In fact the gains from having happy, motivated staff will easily outweigh the days lost to the company.

5. Help with parking / transport to and from work Free workplace parking is

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do you have something to say?

We’re always looking for industry experts with an opinion.

Get in touch to share yours with us...

editorial@bus-ex.com

comment: retention For example, don’t just send a bottle of Moet to the wedding venue – make it a case. It might cost a couple of hundred quid but gestures like that buy loyalty much more than annual bonuses ever can.

a big plus for employees but is not always easy for businesses in London. If you can’t provide it think about helping out with Oyster cards or encouraging a cycle to work scheme.

6. Take the team out You spend a lot of time with these people but most of it is probably spent heads down working to deadlines for clients. As a business leader you should make time to take the team out at least twice a year – once at Christmas and once in the summer. Team building paintball sessions are optional but at least stand them a few drinks to let them know you value them.

7. Introduce a pension scheme Every business no matter

how small will soon have a legal obligation to roll out a pension scheme for employees. Don’t wait for the legal deadline – get yours set up early and let the staff know you are looking out for their long-term good.

8. Mark life events Getting married or having a baby are amongst the most important events in anyone’s lives so if this happens to someone in your team make sure you mark it for them with a generous display of your affection.

9. Childcare vouchers Juggling childcare is likely to be one of the major issues facing your employees. Make it easier for them by offering a workplace child care voucher scheme to help them save up to £1000 a year.

10. Eye care vouchers Help with eye care is the most popular healthcare benefit offered by UK businesses. Office staff spend a huge amount of time staring at a computer screen and offering employees vouchers they can redeem against optician’s costs w ill def initely catch their eye.

The LondonOffices.com Blog features news, views and insight into the vibrant office market that exists in Central London. In addition to reporting on activity from the London Office Market, the Blog also features business and general interest items on life in the UK Capital city. www.londonoffices.com

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remote control Home working cut at Yahoo – flexible work backlash or just a storm in a teacup?

written by: Charlie Mayes

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Management

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W

h e n Yahoo!’s Marissa Mayer recently sent a memo to employees announcing that flexible working practices would be stopped and all home workers were due to report back to the office it created much furor. A supposedly progressive company – and a tech one at that – banning remote workers? From many quarters this prompted a level of surprise, and from others tacit agreement. The press has since been awash with articles and the message boards have been lively.

And it’s not just the press, it seems anywhere you go employees and managers alike have strong opinions.

Richard Branson was one of the first high profile figures to wade in on the debate. He suggested that in this day and age, mandatory

office hours for all workers was a sign of ‘old school thinking’. In an age when remote working is easier and more effective than ever, he said the decision seemed like a backwards step.

Vodafone came out soon after and publicly declared a ‘fight back’ against Yahoo!’s home working ban. Vodafone says that the practice encourages smarter, more cost-effective ways of working and they have figures to back it up. According to a recent study undertaken by Vodafone, British business can save up to £34bn a year by freeing up desk space and reducing overhead costs when workers aren’t present in the office.

While the figures are indeed impressive, I imagine what’s going on at Yahoo! isn’t really about saving money.

According to Mayer the ban at Yahoo! was taken to foster greater ‘communication

and collaboration’ between employees. The idea being that important conversations and creative thinking occurred around the water cooler and during casual conversation over lunch or informal meetings when staff are together. If staff are not in the same place, it becomes more tricky to create the kind of environment where this can happen easily.

According to Richard Branson however, to successfully work with other people you have to trust each other. And a big part of this is trusting people to get their work done wherever they are, without supervision.

Trust of course is a big part of the wider debate.

According to Vodafone, a quarter in the survey worried that flexible working would lead to workers abusing the system. Trust or a lack of trust, sparking creativity by working in close proximity

“the ban at Yahoo! was taken to foster greater ‘communication and collaboration’ between employees” 18 | Be monthly

Management

or the freedom to think, create and work from wherever you are – whatever side of the fence you’re on, unsurprisingly, it’s not so cut and dry.

At DAV we have worked with companies of all sizes across many different industries - from small, close knit groups to large, geographically dispersed organisations with teams working together across different countries and time zones. Each structure

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had its own challenges, strengths and weaknesses.

Technology is a great enabler but above all what really matters is how you use it and to what end that makes a difference. Clearly certain roles are more suited to the office environment and others benefit from on the road or at home access. And it is impossible to say that everyone working together from an office is more efficient and productive than those working on the road

or at home. Some aspects of some roles definitely call for more flexibility of location at different times, depending on the task in hand.

The reality is that work patterns are changing and technology has enabled the world to be increasingly connected. 9-5 is a thing of the past with technology now supporting 24/7 business operation. For a business like ours, the very nature of the work we undertake means our people are often

Management

“the move to more flexible, work at home scenarios is on the increase, With the promise of substantial cost savings and greater employee satisfaction” widely dispersed for many months at a time. They therefore need to be strong independent thinkers and self-contained team players who can function in any type of environment. We trust them to be in the right place

at the right time, working in a collaborative environment when that is what’s called for or perhaps remotely when they need the time to think and reflect.

One thing is for sure, when you are working to deliver a large and complex business change programme, good leadership is key. And to perform at this level you have to be in and around your team for a good deal of the time. It’s about having the judgment and flexibility to be where you need to be, when you need to be, in order to get the job done.

Whether or not Yahoo! got it right remains to be

seen. Generally however, the move to more flexible, work at home scenarios is on the increase. With the promise of substantial cost savings and greater employee satisfaction, especially in those markets where attracting and retaining talent is difficult, remote working has its definite advantages. However, for others it may not be such a great fit. Ultimately, success will be dependent on how a business goes about managing its team environment to create a productive remote and distributed workforce that will make the difference between success and failure.

DAV is an independent project and programme management company. Through a combination of expertise, experience and an outstanding work ethic, we help our clients deal with the challenge and uncertainty of complex business and IT change, leading from the front to deliver outcomes that realise maximum business benefits. www.davmgt.co.uk

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When evaluating changing suppliers, often the grass may seem greener on the other side. But in long term supplier relationships it’s the hidden, and some less obvious benefits which add value

written by: George F. Brown, Jr.

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supplychain

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M

ost of us have at least on one occasion recognized the truth in the lyrics to Joni Mitchell’s Big Yellow Taxi. A senior executive with a construction equipment company recent did so as he described his company’s retrospective assessment of a decision relating to a key supplier: “We had worked with [that key supplier] for many years, dating back to before I joined the company, and it was always a good relationship.

But a couple of years ago, we were approached by a Chinese supplier with a very attractive proposition.

They offered a product that seemed in all ways about identical to what we were buying from this supplier, at a most attractive price point.

“We did our due diligence.

The Chinese supplier was

a real company, not one of those outfits you hear about with no walls to the factory and interchangeable signs depending on who was visiting that day. Their product samples met all of our tests. Our only real issue was logistics, and for the price they were offering, we were easily able to come up with some workarounds. So we made the decision to switch.

“It’s taken us a few years, but we’ve now come to realize that we ‘didn’t know what we had till it was gone’.

The Chinese company has met our expectations with respect to their product and their pricing. That’s not the problem. It’s just that our former supplier was important to us in so many ways that really weren’t connected to the actual product itself. This supplier just can’t substitute in those other ways, and while it’s hard to do a dollars-and-cents

calculation, I suspect we lost more than we gained from the lower prices we’re paying for this product.”

This company’s lament is a familiar one, particularly in recent years with the combination of the pressure firms have felt during the recent recession to find ways to cut costs and with the increasingly frequent presence of Chinese Second Mouse firms offering almostas-good products at a great price point. More and more firms are seeing options to save money without compromising on product features or quality by switching away from longterm suppliers. And many are choosing to do so.

What is often missing in these supplier comparisons are the intangibles embedded in such long-term relationships, ones that aren’t captured by head-to-head comparisons

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supplychain

“it was probably the case that the insights about the contributions made by [the former supplier] were best known to people in our firm that weren’t directly involved in the evaluation” of physical products and prices. Almost every supplier with whom I’ve spoken can describe such contributions and the customers that have benefitted from them.

Even more significantly, almost every customer that I’ve ever interviewed can provide multiple examples of “supplier success stories”, many of which involve contributions that aren’t embedded in the products they buy from those suppliers.

Those truths motivate the question “Why all too often are such contributions ignored when firms consider options involving switching suppliers?”

The executive that provided the case study provided earlier offered his own thoughts on why it happened in his firm, citing factors that I’ve seen in many other circumstances:

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“First, it was probably the case that the insights about the contributions made by [the former supplier] were best known to people in our firm that weren’t directly involved in the evaluation.

You can say ‘shame on us’, and that’s true, but even after the fact, it took some time for us to begin to understand what we were missing. For example, that supplier’s contribution to our product development processes didn’t surface until we were into the next cycle, a full year after we had made the switch.

“Second, there is always the challenge of deciding who ‘talks the talk’ and who truly ‘walks the walk’. Every supplier is willing to say how valuable they are, how much they contribute. But it’s only a few that do so. It turned out that [the former supplier] was one of the ones that did

so. We just didn’t recognize that at the time.”

Intangible contributions that go beyond the physical product are in fact real and are important sources of value creation for the firms that get them from their suppliers, but they are elusive to spot. In the following section, some questions are suggested that can enable a firm to evaluate whether a supplier is in fact one of the ones that “walks the walk” in terms of bringing such contributions to the table.

Identifying Suppliers That Provide Intangible Contributions Over the years, I’ve had the opportunity to discuss supplier contributions with literally thousands of business firms spanning numerous vertical markets. In those

supplychain discussions, I’ve heard great supplier success stories told by these firms, spotlighting ways in which suppliers made a meaningful difference.

I’ve had long discussions about the good, the bad, and the ugly sides of supplier relationships. I’ve heard about supplier relationships that failed and about ones that steadily progressed to higher and higher levels, reaching strategic levels involving “win-win” collaboration.

A substantial number of those discussions involved intangible contributions, and, from analyzing the nature of those contributions, certain common characteristics emerge. Those common characteristics provide some tests that firms can use to determine if specific suppliers are in fact making important intangible contributions, ones that they don’t want to

recognize what they had only after they were gone. Three of the most important such tests are described in this section.

The first test involves the question “Does this supplier contribute to processes and activities that are adjacent to or otherwise linked to the products they supply?”

For almost every firm, the products that they buy from suppliers impact on numerous processes and activities. There are obvious connections – whether the product

simplifies manufacturing or complicates it, whether the supplier’s product is the source of warranty problems or not, whether the product is easily integrated with other ingredients in the final product, etc. And there are less obvious connections – whether this supplier contributes to new product development or complicates that process, whether this supplier helps to meet regulatory challenges or not, whether this supplier and its products facilitate the changes that are needed to move into new geographic markets, new vertical markets, or new points along the good-betterbest spectrum or not, etc.

Examples of such contributions are heard over and over in discussions with firms about their suppliers.

The executive who provided the case study in this article

“Every supplier is willing to say how valuable they are, how much they contribute. But it’s only a few that do so.

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talked about [the former supplier’s contributions to product development: “What we learned, after the fact, is that they were frequently herding us in the right directions in terms of our product development, a contribution that was valuable given the importance of their product to our own.”

In a discussion with another company, another similar example was provided: “When we heard from one of our customers about a problem, we often involved [a certain supplier] in the discussions about how to respond and solve the problem. When we replaced them, we lost that. And we miss those contributions.”

A third example involves today’s pressures to reach global markets:

“Our former supplier had engineers in all of our key markets. Our new supplier has a good manufacturing footprint, but for technical support, we have to go to their headquarters, which adds a lot of time and complexity to even getting answers to simple questions.”

For virtually every company, the adjacent processes and activities that are meaningfully linked to the products purchased from suppliers are many and often involve costs far greater than the price of the supplier’s product. Recognizing these connections is important, and identifying whether the supplier makes intangible contributions to these adjacent processes and activities can allow a firm to avoid short-sighted decisions that are only based upon the product per se and its price.

The second test involves the

question “What do we learn from this supplier?” Every supplier organization has its own intellectual capital, involving information and insights important to their line of business. In many instances, such information and insight can be of value to their customers, and some suppliers create value for their customers by proactively serving as a source of critical information to their customers.

In one extreme example, a firm described a decision to outsource a responsibility for a key technology to a supplier: “We recognized that they are the leaders in this technology, with customers around the globe and spanning multiple vertical markets. Their ability to invest dwarfs what we could do with respect to that technology, and they have far more resources to allow them

“we often involved [a certain supplier] in discussions about how to respond and solve problems. When we replaced them, we lost that” 28 | Be monthly

supplychain to stay ahead of the game. So we decided to tap into that, to rely on them as our source of information and leadership.

And so far that’s paid off – what we learned from them has been far beyond what we could have learned on our own.”

There are numerous examples that are more limited than the previous one. One executive described a supplier’s role with respect to the regulatory environment: “We know that they have to stay ahead of [a certain area of regulation] in order to stay in business. So we count on them as our window into that world. They tell us what we need to know and where we need to make changes, not only as it relates to the products we buy from them, but in general.”

Another executive in a different industry explained that a certain supplier: “Has pretty much provided safety training to all of our employees” and said that they were “Our go-to guys on safety issues”.

In still a third example, a supplier that was very active in doing end user market research was described as: “The firm that got us ahead of the curve with respect to advanced diagnostics, sharing their research with us as to what users considered to be unmet needs and helping us bring some solutions to the market earlier than our competitors”.

The latter category of success story, one that involves a contribution that makes a difference in a firm’s

competitive position, is at the top of the ladder in terms of the value of a contribution made by a supplier, but in fact all of the above examples are ones cherished by customers.

And all of them are examples that involve the effective sharing of information by a supplier with its customers.

The third test that provides insight as to intangible contributions involves asking the following question to employees in various departments and divisions across the customer’s firm: “When you think of [name of the supplier], what

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“A critical ingredient to our product, one that is valued by our customers.

They respect [that supplier’s] brand and it helps us make sales.” comes to mind?” I have had the privilege of asking that question frequently to individuals across many organizations about many of their suppliers.

The answers span the spectrum. At the negative end are responses like “sleepless nights” and “looking for a new job”. When those are the answers, it’s probably time to aggressively look for a new supplier. Somewhat less negative are answers like “pretty expensive, which is a problem” and “an OK supplier, but nothing special”, answers that also motivate the consideration of alternatives. At another point on the spectrum are positive answers like “solid products”, “on-time deliveries and no hassles”, and “good responsiveness”.

Such answers suggest that any decision to replace the supplier must ensure that there is no denigration along

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such important metrics.

But at another point on the spectrum are answers like the following: “They are problem solvers. I can’t tell you how many times we’ve faced a challenge with some new application, and turned to them for help and got what we needed.”

“A critical ingredient to our product, one that is valued by our customers. They respect [that supplier’s] brand and it helps us make sales.”

“A key team member. In many ways, part of our eyes and ears to our market.

They’ve helped us get ahead of challenges more times than I can count.”

When the top-of-mind descriptions of a supplier involve intang ible contributions – and especially when they

involve contributions seen as important to the firm’s own end customers – it is a strong signal that the supplier is probably in the strategic category, involving a relationship important in ways that go beyond product and price. As was the case with the firm involved in the case study in this article, the signals are usually there, but aren’t always processed by the decision makers considering alternative suppliers. That is all too often the case, and asking this third key question to people across the organization is a means of ensuring that key signals are not missed.

There are other themes that surface in terms of intangible contributions made by suppliers to their customers, but the three questions outlined in this section can help to uncover the most frequent types of such intangible contributions.

supplychain It takes work to ask these questions and to build a solid foundation from which to evaluate the answers that emerge, but the effort is well worth the cost when it allows a firm to avoid a decision that later forces them to acknowledge that they didn’t know what they had till it was gone.

A Supplier’s Perspective For suppliers serving business customers, the concepts presented here are also highly relevant. I have used the three questions in the previous section as part of an assessment process through which a supplier can evaluate whether it is making intangible contributions to its customers and whether it has the potential to do so in the future. For most suppliers to business markets, such contributions will become more and more important in the future, given the reality of increasinglyequivalent products and transparent prices. Intangible contributions involving services and solutions will grow in importance as a source of differentiation among suppliers.

In working with such suppliers, I’ve emphasized two important action items.

The first involves developing an inventory of the intangible contributions that the firm is able to make. Typically, that list varies by customer, with the relevance and the value creation potential differing from customer to customer, depending on their product line, the markets served by the customer, the customer’s own capabilities, the nature of the relationship, and other factors. But for at least most of the larger customer relationships, suppliers have been surprised as to the length and breadth of the list of potential contributions.

They have also been

surprised as to how many of those contributions are not being delivered to their customers. This can be due to any number of factors – day-to-day pressures, overstretched employees, the wrong touch points within the customer organization, a failure to communicate how important doing so is to the individuals capable of making the contributions, etc. Recognizing the gap between what is possible and what is being done can allow a supplier to take action and assign responsibilities to close the gap in the future. As noted above, doing so may make the difference between success and failure with that customer at some point in the future.

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“suppliers that deliver intangible contributions should ensure that discussions of these contributions are part of their customer relationship plan” The second action item involves proactively bringing such contributions to the attention of the customer.

It is too late to do so during a time of crisis or in the context of responding to a competitive threat. In those circumstances, the customer response is likely to be in the realm of “everyone talks the talk”, as suggested earlier. But when done as part of a strong and well managed relationship plan, communications about intangible contributions can be recognized by customers and at some point in the future can make a difference.

I cannot overemphasize the importance of embedding such discussions in the context of an overall relationship plan. Setting up a one-time visit with a customer to explain “how important we are and how much we are

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supplychain doing for your firm, so that you remember it the next time contract decisions come around” will fall flat with near certainty. But discussing intangible contributions as part of an ongoing dialogue with a customer, focusing on the future and focusing on that customer’s own challenges can work and will be remembered. Suppliers that want to be recognized as making such contributions and to be rewarded for them must incorporate the contributions that they can make as part of a long-term, ongoing relationship plan.

Summary Suppliers have traditionally been a source of value to their business customers, traditionally centered in their products and in their ability to reach an attractive price point. Increasingly, however, more and more competitors will achieve parity along those dimensions, and differentiation will depend more on whether a supplier can provide intangible services and solutions of importance to their customers.

Unlike products and pricing, however, customers will be

challenged to identify and quantify the benefits of such contributions, especially as they are often not easily translated into “per piece” metrics. Such contributions, nonetheless, will matter both to customers and to the suppliers differentiated by their ability to deliver them.

To avoid the disappointments that will occur when a customer displaces a supplier that was providing high-value intangible contributions, it is necessary to have a process through which it can be determined which suppliers are making a difference through such contributions.

Suppliers that are linked to a customer’s adjacent processes and activities, that bring high-value information and insight to the customer, and that are recognized positively for their services, solutions, and end customer

appreciation are ones likely to be important sources of intangible contributions.

Careful decision making is required when considering options to replace such suppliers, as a frequent lament after doing so is that “we didn’t know what we had till it was gone”.

Suppl ier s should themselves be attentive to those same sources of intangible contributions, both to identify where they have the potential to create and capture value and to identify gaps between such potential and what they are actually bringing to their customers.

Those suppliers that are in fact delivering important intangible contributions should take actions to ensure that discussions of these contributions are an important and ongoing part of their customer relationship plan.

George F. Brown, Jr. is the CEO and cofounder of Blue Canyon Partners, Inc., a management consulting firm working with leading business suppliers on growth strategy.

Along with Atlee Valentine Pope, he is also the author of CoDestiny: Overcome Your Growth Challenges by Helping Your Customers Overcome Theirs. www.bluecanyonpartners.com

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Sales & Operations Plann

More than fo S&OP is a hot topic for wholesale companies, here we discuss what it is, and how its sophistication can drive performance beyond that achievable with spreadsheet planning

written by: exact software

34 | Be monthly

strategy

ning:

orecasting

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S

ales and operations planning (S&OP) is an integrated b u s i n e s s management process that was developed in the 1980s

by Oliver Wight. In general terms, it refers to the decision-making processes involved in balancing supply and demand, creating profitable volume and mix propositions, and engaging in optimal asset management.

Its scope is business-wide, integrating financial and operational planning, and linking board-level strategy to on-the-ground day to day operations.

Broad scope S&OP involves a wide range of company activities, the plans drawn up with input from marketing, manufacturing, engineering, finance and procurement to drive the overall financial plan. As such, S&OP is in reality a broad reaching term for how senior management runs the company. It is about creating the optimal balance between goods in and out, and ensuring operations are managed to support profitable

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sales activities. With sales and operations managers not always automatically aligned, strong leadership and fact-based decisionmaking are essential to get everyone pulling in the same direction. It helps operational leaders need to understand that ‘sales’ is the core of the business, and to focus on ensuring transactions can occur as smoothly and as quickly as possible.

Ownership of S&OP The S&OP is top management’s tool for steering the company.

It helps ensure that day to day operations work towards the business plans agreed upon to deliver the company’s toplevel strategic objectives. This visibility into performance against planning allows senior management to effectively guide lower management, helping them successfully steer the day to day activities at ground level.

Ongoing S&OP is also a dynamic process that needs to be re-visited regularly to remain effective. At the end of each monthly cycle, top management needs to

“S&OP is in rea reaching ter senior manag the com

ality a broad rm for how gement runs mpany”

strategy review the balance of the supply chain and ensure the resources for meeting the agreed business objectives are available. The decisionmakers need to be committed to a continuing cycle of Plan, Do, Check, Act – creating one master outline that delivers customer satisfaction, required profit and, above all, is achievable. The plan should be ambitious, yet achievable.

If it asks for too much, it loses credibility.

S&OP Process As mentioned above, the S&OP process runs in cycles.

Input will come in a variety of shapes and forms, all of which need to be carefully transformed to fit an overall plan clear to all stakeholders.

At all points, it is essential that strategy and execution remain clearly connected.

The starting point is the business’ most up-to-date sales history and committed purchase orders. This input for the sales forecasting process is then considered in combination with current inventory and supply capacity, enabling leaders from sales, marketing, operations and finance to reach consensus on

demand and supply, and on what can be made available to promise.

The output of these discussions needs to be one consolidated plan, one set of numbers for the whole business to work from. A business may work with several scenarios and track actual performance against them. However, it is essential that every scenario is based in realism, with firm indicators that such a level of performance is achievable.

Managing expectations over time Expectations and ambitions then need to be clearly communicated. The vision, mission and goals must be understood by all stakeholders, enabling them to successfully cascade from the long term plans to everyday execution. It’s also important that leaders are able to confidently differentiate between trends and exceptions and adjust plans as necessary – an idea that isn’t flexible is likely to break under strain.

Planning horizons, period sizes and review frequencies should reflect the underlying

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“By definition, connecting top level strategy with organization-wide operations is a genuinely complex matter� dynamics of the business.

Business with long supply lead times need to look several months into the future, even for operational planning. The time it takes to make a substantial increase in capacity drives the planning horizon for the capital investment calendar. With the S&OP also linking product mix and product innovation plans to operations, most companies should look to plan at least the next 18 months on a rolling basis.

KPIs With a set of well supported plans in place, the business needs to establish the right set of objective criteria to measure progress.

Strategically aligned Key Performance Indicators (KPIs) are the tool for this job, representative of commercial

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priorities and suited to active monitoring of planning accuracy.

Keeping track of how effective financial and sales volume forecasting has been is a key area. Closely reviewing up-to-date sales volume and revenue data is essential, as are more operational performance indicators like inventory turns, total inventory, lead time adherence, return on promotional spend and new product introductions success.

In general, any business will get a good idea that forecasting was well considered when stock declines steadily to each re-order point, and service levels maintain consistency.

Careful monitoring against well-considered forecasting will also ensure that exceptional occurrences

are highly visible and easily considered for future planning.

The role of IT By definition, connecting top level strategy with organization-wide operations is a genuinely complex matter. Creating an accurate view that touches all relevant processes and stakeholders requires the handling of large volumes of data. To effectively interlink past performance with future expectations, the historical and current information needs to be complete, accurate and highly flexible in how it can be mined, reviewed and presented. In order to serve multiple perspectives, it must be possible to work with the data on a range of levels. This will allow upper managers to visualize the overall status of the business, whilst

strategy maintaining clear links to all operational activities.

Choosing the right tools As a result of these demands, S&OP success is largely dependent on the software employed to support it. Many companies use MS Excel as an S&OP tool, it being easy to configure, flexible, inexpensive and familiar to almost everyone. However, it will always fall short in comparison to a properly configured, integrated planning tool. Excel is not

real time, has poor version management and is not multi-user. As such, it’s a major challenge to use it for effective collaboration.

Spreadsheets have their limitations The information in a spread sheet is relatively static, not easily manipulated and not suited to easy viewing from different perspectives. Deep diving through a top level data set into the various processes that contributed to it is not realistic, while combining separate reports into a useful

top level summary is difficult and time consuming.

In short, Excel misses the manipulative power needed to properly analyze the vast, wide-reaching data streams that hold the information needed to create effective plans. And that’s only in terms of collecting historical data to support planning decisions. Running a set-up where current performance and real time figures can be compared to the plans and then used to effectively update and adjust them is near-on impossible.

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Dedicated solutions The right S&OP software needs to under pi n management by not only thoroughly analyzing the past, but providing easy access to the business’s ongoing progress against the planning as the cycle unfolds.

It must be collaboration friendly, bringing often highly dispersed, international operations together with any external parties involved in the processes (customers and suppliers).

The ability to create and then manage scenarios is also a key aspect of a good solution, effectively sharing them with a wide community of stakeholders throughout the business’ ecosystem.

Connecting operational pl a n n i ng, e xe c ut ion and financial planning capabilities — ideally at the data and process model level — will support a truly active planning environment

that can be followed closely, adapted as necessary and analyzed fully at each point in the review process.

Workf low management, controlling and cataloguing the passage of information through the involved people is an important part of this.

Dealing with complexity Stakeholders need easy access to detailed reporting on the established KPIs – both vertically within specific operational processes, and horizontally in relation to the end-to-end supply chain – helping management identify the root of issues and make the right decisions when trading off competing values.

In short, the right tool needs to be able to capture and manipulate all business critical information, from right across the company, in whatever form the decision makers require it to make choices with confidence. Base

planning data needs to be available in a range of views and formats specific to the various groups that will work with it, supporting them in releasing the patterns and insights they’re looking for.

Creating the right mix The best results will be achieved when system calculations can be combined effectively with human insight. Think about a system that can combine input from sales and marketing professionals with output from a forecasting engine.

The data tells a lot, but it’s also important to fine tune it with intelligence from the people working closest to the market.

Given the above, creating and then managing a realistic, trustworthy Sales & Operation Plan is obviously a complex process dependent on deep understanding of past and current performance.

“Today’s competition is no longer between individual companies but between networks of companies” 40 | Be monthly

strategy

As such, it’s too big and too important a job to be trusted to a tool not fit for purpose.

Why use S&OP? With supply chains becoming longer, wider and more complex, there has never been more “distance” between the raw materials and the consumer. At the same time, modern technology has made it possible to keep all stakeholders informed at every step of the way.

Today’s competition is no longer between individual companies but between networks of companies.

Accurate processes to

optimize a company’s role in these complex environments have never been more important. Without end to end planning covering the entire ecosystem of business relationships, achieving success promises to be a real challenge.

Understanding the customer In addition to the wider reach of company activities, it is essential that businesses respond promptly and effectively to fluctuations in customer demand. Changes in customer needs directly inf luence planning for

logistics, manufacturing and procurement. Companies need to be able to work with these changes effectively, ensuring they are stocked to meet needs without tying up capital unnecessarily.

As product life cycles get shorter, accurately matching supply and demand is certainly not getting any easier. Balancing them to maximize profit has become a key, complex discipline in its own right. Simple, unscientific forecasting, using underpowered IT support, will not give businesses the platform they need to realize their potential.

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“S&OP is the process to help companies go about making corporate strategy an operational reality�

Solving existing issues Executed effectively, S&OP addresses a wide range of internal issues related to unacceptable lead times, excessive on hand inventories, customer service issues and ineffective utilization of resources. It helps companies move away from finger pointing between sales and operations. It ensures optimal use of resources in accordance with effective execution of the company strategy. And if things do go astray, clear ownership allows problems to be addressed quickly and effectively.

S&OP-driven businesses can provide clear answers to questions around which products will be sold, where and when they should be available, in what quantities and at what price. The planning proposes a framework to deliver on the strategic objectives, providing a clear case for the proposed demand

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and the business’ ability to profit from it. It confirms that the proposed course is fully executable with the available resources, and marries the projected sales and operations numbers to the annual business plan and budget.

Increased accuracy boosts the margin Improved coordination, communication and team work will result from clearer starting points for processes, and clearer signposting of where activities should be leading. The details will make it clear who is responsible for what, leading to greater ownership and more careful management of day to day activities. More accurate supply plans can lead to leaner execution of manufacturing processes.

L og i st ic s, Warehousing and Distribution benefit from fewer changes, while more precise inventory management (less working

strategy capital in the form of safety stock) results in fewer incomplete orders and better customer satisfaction.

Conclusion S&OP is an integrated set of business processes linking the company’s top level strategy to the day-to-day activities in place to realize it. Although external factors can never be controlled, having a thorough knowledge of the company’s current position and past performance can provide a reliable basis from which to make important decisions for the business’ future.

Having access to a broad and organized information collection, analysis and reporting tool, able to gather and manipulate wide ranges of current, accurate data,

is one of the prerequisites for success. With a clear picture of the business issues that need addressing, it can provide the insight needed to steer the business on a path to success and growth.

Provided strong leadership ensures buy-in from both sales and operational departments, the S&OP’s process has the power to touch the entire business. Detailed plans, based in sound business intelligence and responsive to actual progress, become the blueprint to which the whole company can look for guidance. While sales forecasting can give businesses an idea of where they are headed, S&OP is the process to help companies go about making corporate strategy an operational reality.

Exact develop ERP, CRM, HR, financial and industry-specific business software for more than 100,000 customers around the world. Based in the Netherlands, where they remain market leader in the SMB segment, their on-premise, hosted and cloud solutions focus primarily on manufacturing, wholesale & distribution, professional services and accountancy companies. With offices across Europe, Asia, Australia and America, their internationally oriented products combine with local support to offer real customer value. Read more Exact business insights at: www.the-biz-box.com

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Truth

Most us were taught as child policy,’ but would George Lincoln make it pay in t

written by: JoAnn an

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Strategy

h p ys

dren that ‘honesty is the best Washington and Abraham today’s business world?

nd Joseph Callaway

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I

n the United States, Presidents’ Day falls between the birthdays of two of the nation’s most revered leaders— George Washington and Abraham Lincoln. As the country’s schoolchildren are constantly told, both men are remembered for their honesty, but would Washington and Lincoln make it in today’s business world?

I believe the answer is yes.

If they showed up in 2013 and truly lived up to their reputations, they would find themselves in huge demand.

People really, really crave honesty and transparency, and it’s mostly because they’re such rare qualities these days.

Do a little soul-searching.

You might be shocked at the number of white lies, exaggerations, misdirections, and lies of omission you’re guilty of. The occasional lie of omission, or even

commission, may not reflect any ill intent toward your clients, but in the long run, even small dishonesties will muddy your relationship and ultimately keep your business from being all it can be.

We can usually rationalize our small or even large dishonesties. But when we examine them, we can see that our lies, little or big, are told to benefit ourselves—to make more money, to cover up mistakes, or to avoid an uncomfortable conversation.

Making the decision to always put your clients first instead—which means telling them the truth and letting the chips fall—will transform your business. It may not happen overnight, but it will over time as you gain a reputation for transparency and trustworthiness. And it will change your life. Just ask Abraham Lincoln, who “lost” a lot of money during his lawyer career because

“People really, really crave honesty and transparency” 46 | Be monthly

Strategy

“Whatever happened, we knew we had to always put the client first” he didn’t like to charge exorbitant amounts, and encouraged clients to settle out of court when it was in their best interests—even though he didn’t get paid!

My wife JoAnn and I built our thriving business—Those Callaways—after a late-in-life entry into the world of real estate. Since then, we have lived through a bubble and survived a horrible economic downturn—and managed to prosper through both, while many of our fellow realtors never recovered. In our new book, Clients First: The Two Word Miracle, we credit our “Clients First” philosophy as our magic bullet— and never, ever telling a lie is part of that.

Early on in our careers as realtors, we faced a notuncommon dilemma: Our sellers, the Smiths, needed to sell their home soon so they could move. Our buyers, the Browns, had fallen in

love with the Smiths’ house.

Perfect, right? Not really. It turned out the Browns’ offer was lower than what the Smiths were asking, but it still stretched their budget.

Should we tell each family what they wanted to hear (and guarantee ourselves a commission)…or should we do the right thing?

JoAnn and I decided to tell each party the truth: This deal really wasn’t in either of their best interests, even though it was in ours. Like a fairy tale, we soon found the Smiths a buyer willing to pay their asking price, and we found the Browns a more affordable home they loved even more. The way we did business was forever changed.

Whatever happened, we knew we had to always put the client first—even though the truth sometimes hurts, and a fairy-tale ending isn’t always guaranteed.

Whether in the days of

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Washington and Lincoln or right now, telling the truth is not rocket science. Honesty really is the best policy in business and in life. I give seven solid reasons why: It’s why you exist If you’re in business, you provide either a good or a service that’s aimed at making the consumer’s life easier, better, fuller, etc. In other words, your raison d’être comes down to helping other people. When you think about your job description

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in those terms, you’ll have to admit that while it may not always be comfortable, telling the truth is what’s in the client’s best interest.

You can’t truly help someone if you aren’t being honest! Sure, you can usually rationalize a blurred line or a white lie. But on whose behalf are you fudging the truth? Even if it’s for the client, broken rules and skipped steps—if and when they come to light—won’t be doing him any favors. And if you’re trying to skirt the

truth to make your own life easier, beware: You’re on a very slippery slope.

Truth breeds trust It’s simple. When the customer knows he can expect the whole truth and nothing but the truth from you, he’ll trust you. And especially in the wake of so many business scandals (Bear Stearns, JPMorgan Chase, and even Bernie Madoff spring to mind), trust isn’t something you’ll automatically get from a client. You’ll have to earn

Strategy

“if you’re trying to skirt the truth to make your own life easier, beware: You’re on a very slippery slope” it. And once you have done so, you’ll most likely have a client for life.

Trust is one of the relatively few remaining things that no amount of money can buy.

It’s also something that’s invaluable once you have it. While I’m no business

historian, I would venture to say that dishonesty, coverups, and stretching the truth played a large role in the collapses of most nowdefunct companies. What would the current business climate look like today if all of those organizations had prized earning long-term trust over earning short-term profits?

It helps you show— and earn—respect No doubt you’ve been lied to at some point in your life.

When you found out that the proverbial wool had been pulled over your eyes, how did you feel? Of course you were angry and hurt, but chances are, you also felt belittled. That’s because it’s offensive and demeaning when someone doesn’t think you can “handle the truth.” On the flip side, though, when you hear the truth—even if it’s not what

you expected—you feel empowered and respected.

Respect isn’t just about being polite and using your manners. To a much larger extent, it’s about letting people make their own decisions. Sure, you can offer your expertise and opinions— just don’t withhold or twist the truth in an attempt to manipulate or manage.

Also, people respect you more when you tell a difficult truth. They may not like what you have to say but they will think more of you for having the guts to say it.

The truth will set you free Remember when you were a kid and your mother told you that if you told her the truth about how the lamp really got broken, you’d feel better? She was right! Making a commitment to always tell the truth will take a weight off your shoulders that you

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“Sticking with the truth isn’t always easy—it’s something you have to dare to do” might not have known was even there! Not only do lies have their own psychic weight, they complicate your life. Truth-telling simplifies it.

JoAnn and I found that the positive effects of telling the Smiths and Browns the truth were almost immediate. The first thing we noticed was a new feeling of strength and courage. By no longer having to juggle the facts, we were relieved of so much strain!

When you have only the truth, you wave goodbye to moral dilemmas and sleepless nights.

You don’t have to worry about getting the story straight or remembering what you have and haven’t shared. You know you’re doing the right thing.

Honesty is a catalyst for personal evolution As you walk the path of putting your clients first, you’ll evolve as a person, not just as a professional. That’s because being honest with

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Strategy your clients isn’t always easy.

In fact, in some situations, it might be one of the most difficult things you’ve ever done. But just as sore muscles after weightlifting means that your body is getting healthier and stronger, feeling uncomfortable but telling the truth anyway means that your motivations and intentions are moving toward a higher plane.

It’s hard to define what a “good” person is, but rest assured that making honesty a constant part of your business will help you to move in that direction. JoAnn and I are not the same people we were 14 years ago. Our honesty now is definitely not what our honesty was then. Before, we weren’t always sure we could trust the truth, and we paid for that with fear and anxiety. Now, we enjoy a wonderful calm, as well as the trust and loyalty of clients we would have once worried about losing!

Telling the truth is the best insurance No matter what industry or field you’re in, things are occasionally going to go wrong. Despite your best efforts, clients will

sometimes be disappointed and angry, and some will seek retribution. While you can’t prevent this eventuality, you can protect yourself by consistently being honest.

Once I heard a fellow real estate agent say, “If you haven’t been sued, you aren’t doing enough business.” I thought about that, and on the one hand was saddened by this person’s hardened attitude, and on the other hand, I was struck by the notion that litigation is a fact of life. It occurred to me that when you’re honest, your chances of being sued plummet. Even if things go wrong, your clients will know you have done your best and will be less likely to blame you for the failure.

Honesty is a powerful magnet When you cultivate a reputation for honesty, you’ll be surprised by how quickly and how far the word spreads.

Clients want to work with

businesses that won’t play them false, and when they believe they’ve found a good thing, they’ll tell others! And, of course, they themselves will stay loyal.

Believe it or not, JoAnn and I have never asked for referrals. We simply put our clients first and watch as they become an army of recruiters.

When you show yourself to be honest and trustworthy, the people with whom you do business will recommend you and advocate for you and want you to succeed. And when you take good care of those they send your way, they’ll be proud to do it again and again.

Sticking with the truth isn’t always easy—it’s something you have to dare to do. Why else do you think George Washington and Abraham Lincoln are revered for doing so? But remember, everything has an impact—and the price of not trusting the truth is always more expensive than the alternative.

Joseph and JoAnn Callaway are coauthors of the New York Times bestseller Clients First: The Two Word Miracle and founders of the real estate company Those Callaways. www.clientsfirstbook.com

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executive insi ht

Creating a legacy Charles Siwawa, CEO of the Botswana Chamber of Mines

I understand you studied at Leeds University, is that correct?

That is correct. I did my Mining Engineering degree at Leeds University, completing it in 1982, after which I returned to Botswana to work for Debswana Diamond Company.

Six years later I went to do my Masters in Industrial and Administrative Sciences at City University in London. In 1990 I returned to Botswana to continue my employment with Debswana before eventually joining the Botswana Chamber of Mines (BCM) in 2010.

You have witnessed first-hand the evolution of the mining industry in Botswana over the last several decades. What have you found to be the most important development made when it comes to mining in the country?

I think what has really impressed me over the years has been just how technological advances have been adopted and in turn developed in Botswana, before going on to be

replicated with great success in others parts of Africa. I have also taken huge pride from the fact that Botswana has made immense progress when it comes to supporting local people and communities in terms of corporate social investment. Debswana Diamond Company for example was one of the first companies in the world to actively enrol all its employees onto HIV/Aids medication programmes, free of charge. Many other businesses have since followed suit and I think this has helped communities in general and also paint a positive picture of the mining companies in the country.

When you compare the state of Botswana’s mining industry today to that of when you first took on the role of CEO of the BCM what change stands out the most to you?

I think one has to look at the mining industry as a whole. You look at where the sector has come from and where it is heading and the change is pretty clear, for example the fact that in the last ten years we have witnessed

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“growing the Chamber, providing it with strategic thinking and vision, has given me with a huge amount of motivation quite a significant increase in the amount of exploration taking place in the country. When one looks specifically at the BCM you can see that here is a Secretariat that has evolved in line with the market and in doing so has managed to achieve an awful lot in what has been a relatively short space of time.

So, what continues to motivate you today?

I think the issue of growing the Chamber, providing it with strategic thinking and vision, has given me with a huge amount of motivation. I have gratefully received a lot of support from mining companies that

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are members of the BCM, in particular its Executive Committee, who understand and appreciate the benefits that the Secretariat offers and are keen for me to pursue this mission. It is that kind of support that is giving me the motivation necessary to achieve even more great things through the work of the BCM.

What do you consider to be some of the bigger achievements of the BCM during your time as CEO? I think it is the growth of the Chamber itself. When I took over in 2010 there were no more than nine members,

executive insi ht whereas now there are closer to 30 and still growing. That to me is proof that our talking to companies about what we can do to support their efforts in Botswana is really paying off. This is in turn creating a snowball effect in which more parties and groups are approaching us to enquire about future membership.

How would you personally like to be remembered when people look back on your time as CEO of the BCM? My first goal was to establish from ground level a functional and successful Secretariat for the BCM. With that achieved my own personal mission now is to help kick start the next quantum leap for our country, which we plan to achieve through the development of Botswana’s coal reserves. If I can establish this industry sector successfully while assisting in the development of the necessary infrastructure to deliver the levels of tonnage that we are currently thinking about then I will consider my work complete and can retire a very happy man indeed.

Charles Siwawa is the CEO of the Botswana Chamber of Mines. The Botswana Chamber of Mines is an organisation established to serve the interests of the mining and exploration companies operating within the country, together with associated industries. www.bcm.org.bw

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Perseus Mining

A PROMISE IS A PROMISE West Africa still hosts mineral deposits that for one reason or another have remained underdeveloped: for certain Australian prospectors they became an obsession that is now paying off

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

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A bar of gold being weighed

Perseus Mining

P

erseus Mining is very much a team effort: an overnight success that was 25 years in the making, as one of its founders Mark Calderwood has described it. Calderwood, the current chairman Reg Gillard and exec director Colin Carson have been taking an active interest in the under-explored mineral deposits of West Africa for that long, but it was not until 2004 that, having secured a couple of gold bearing deposits in Ghana, Côte d’Ivoire and the Kyrgyz Republic that they formed a company and floated it on the ASX. Since then things have moved forward quite quickly despite a couple of years of quiescence while world markets were depressed and trying to sort themselves out. In 2006 it acquired the tenements that today host its Edikan Gold Mine, though exploration and feasibility work could not really get under way till 2009. By 2010 though the company had successfully recapitalised, obtained a positive full feasibility study and started to build its flagship project, the Edikan mine in Ghana’s rich Ashanti gold belt.

It was just before the start of project development that Jeff Quartermaine joined the team as CFO. Up till then, he says, the company had been brought forward by a team whose main expertise lay in exploration and business development – and they were good at it, having grown the resource from about 130,000 ounces of gold at the time of acquisition to almost eight million ounces today. But they were not blind to the fact that along the development curve different skills are needed. In 2011, shortly before

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Tel: +27 12 345 3335 Fax: + 27 86 6609354 Email: muchinaeng@telkomsa.net or info@muchinaengineering.co.za www.muchinaengineering.co.za

Muchina Engineering started out

as a supplier to two mines in Zambia mainly supplying pumps mechanical seals and gaskets.

Over the years we have learnt how the mines work and understand all their special needs.

This has allowed us to branch out in to various projects. We now supply 8 mines across Africa including Perseus mining in Ghana.

Our products: • Pumps • Pumps Spares/Repairs • Mechanical Seals • Gland Packing • Gaskets • General Supplies

Perseus Mining months of this year were a record quarter, continuing As a subsidiary of Associated Pump Engineers UK Ltd, remediation work on the Muchina Engineering are suppliers of mechanical seals, plant notwithstanding, and pumps, gland packing and gaskets. Muchina Engineering the first year’s production are the sole distributors of Gusher pumps in South Africa, a great success. “We are and as from 2010 we are now the sole distributors for on track and the future is Beresford pumps throughout Africa.

In 2008 Muchina Engineering, in conjunction with looking very promising,” says Associated Pump Engineers UK, invested one million dollars Quartermaine. changing from traditional sand castings to investment Ghana, and West Africa castings for our impellers and casings. generally, is not such a risky The vision of our company represents us with an incredible place to do mining business foundation, an underpinning which gives us confidence, in as you might imagine. strength and insight as we continue to be a leader in the “We have worked hard to growing premium pump and seals industry. www.muchinaengineering.co.za forge good relations with the government and our host communities, but I think it is interesting when people talk about the political risk of mining in Africa: I don’t think the risks are that much higher than in many other regions.” The MRRT or super profits tax introduced in Australia from July 2012, he suggests, makes Perseus’s base country as challenging a business environment as any, and Ghana in particular has a very forwardlooking regime when it comes to co-operation with the mining companies.

muchina Engineering

250,000 ounces

Annual gold production projected at Edikan Water quality monitoring at Edikan Mine

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THEODORA ASUBONTENG ENTERPRISE, is a multi-faceted business that has a reputable history of excellent services to big-scale corporations such as the mining industry and our strong dedication to perfection and quality makes us a very viable enterprise to do business with.

THEODORA ASUBONTENG

We supply Household items such as: • Bedsheets • Duvert and duvert covers • Towels • Blankets • Towels • Shower curtains • Door mats • Bed mats • Cutlery sets • Glasses • Blenders • Irons • Microwaves • Rice cookers • Kitchen knives • Kitchen napkins • Mosquito nets • Refrigerators • Television sets We also supply Mining gear such as: • Workers’ Overalls • Reflector Vests • Raincoats • Safety Goggles • Ear plugs • Protective Gloves • Nose guards We also provide Interior Decoration services like: • Curtains • Window blinds • Venetian blinds • Carpet layering • Room furnishing (furniture) We are also Event Organisers for occasions like: • Weddings • Parties • Official Ceremonies Beauty in Virginity: • We also support orphans and vulnerable children

ADDRESS: P.O. Box 2136, Sunyani, Ghana.

LOCATION: Ground Floor of Cocoa House, Sunyani, Ghana.

TELEPHONE: 233208120256/ 233243109618/ 233352023646/ 233208149554 E-MAIL: bevin2004gh@yahoo.com

PERSEUS Mining MINING Perseus Perseus Mining Perseus feature Lorem ipsum dolor sit amet, In reciprocation text to go here....Lorem consectetur adipisicing elit, has been assiduous in ipsum doing dolorright sit amet, consectetur sed do eiusmod tempor the thing by the host incididunt ut labore et dolore adipisicing elit,Ghana sed has do country.

Because eiusmod ut magna aliqua. Ut enim ad a longertempor historyincididunt of mining laboremany et dolore magna aliqua. minim veniam, quis nostrud than other countries, Ut suffered enim ad more minimwhen veniam, exercitation ullamco laboris it the nisi ut aliquip ex ea commodo quis nostrud mining boom hitexercitation South Africa ullamco laboris nisi ut on aliquip consequat. Duis aute irure and other countries the ex ea commodo dolor Sackey, in reprehenderit in continent and all consequat. round the Environment Manager, Michael on the revegetated Duis aute irure dolor in voluptate velit storage esse cillum main embankment of the tailings facility world.

Its best brains were reprehenderit inbyvoluptate drained, tempted the high This is a caption this is a caption dolore eu fugiat nulla velit esse cillum dolore Excepteur sint salaries being offered.

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Excepteur sint occaecat non proident, sunt in of experienced professionals back home, and occaecat into seniorcupidatat jobs. cupidatatis non proident, sunt inby culpa qui culpa qui officia deserunt mollit anim id Perseus trying to redress this actively Of course it would be unrealistic to seek officia deserunt mollit anim id est laborum. est laborum. Lorem ipsum dolor sit amet,

THEODORA ASUBONTENG ENTERPRISE THEODORA ASUBONTENG ENTERPRISE has an N.G.O. called “BEAUTY IN VIRGINITY� which seeks to promote Moral values and discipline among the youth in Ghana.

A chief aim of our N.G.O. is to mobilize, educate and assist virgins to maintain their virginity till marriage.

We also serve as an active voice towards HIV/AIDS sensitization and awareness among the youth in various communities in Ghana.

Some of our achievements in this regard include: A joint collaboration with Perseus Mining Ghana on World AIDS Day in 2012 where we visited schools in the Ayamfuri community to educate and sensitize the youth about HIV/ AIDS and its deadly effects and how they can protect themselves.

A two day HIV/AIDS Sensitization Workshop

for sixty (60) Queens and Opinion Leaders, Long Distance Drivers, Traders and Teachers sponsored by the UN System Gender Program. A Workshop/Quiz was organized for in and out school youth on behavioural modification strategy on HIV/AIDS sponsored by the Ghana AIDS Commission.

At THEODORA ASUBONTENG ENTERPRISE, we are contracted to PERSEUS MINING GHANA LIMITED as a supplier of general goods and interior decoration.

At THEODORA ASUBONTENG ENTERPRISE, we have also been a supplier and Interior decorator for NEWMONT GHANA GOLD LIMITED for about seven (7) years.

E. bevin2004gh@yahoo.com

WEEKLY| |652 be BE monthly

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Perseus Mining IGS Italia

IGS Italia is the European engineering and manufacturing subsidiary of Innovative Gas Systems (IGS) with HQ in Houston TX. IGS is worldwide one of the major suppliers of non-cryogenic air and gas separation plants and instrument air packages. The patented proprietary hollow-fiber membrane technology from IGS sets market standards in terms of performance and efficiency for nitrogen production, gas separation or air dehydration. IGS Italia not only designs and manufactures standard systems, like its patented NITROSWING® and OXYSWING® modular PSA nitrogen and oxygen

experienced personnel in the surrounding community, so it is remarkable to learn that approximately 50 per cent of the workforce at Edikan is drawn from the five villages nearest the mine. “We could have drawn staff from mining operations elsewhere in Ghana,” says Quartermaine, “but we decided that while recruiting locally meant we’d have to spend more on training, it would put money into the local community and increase their engagement with the operation.”

Training local people from scratch has the added advantage that they understand how Perseus operates, he adds. “We went out and

generators, but also offers finely engineered and custom-built packages for nitrogen and oxygen generation, gas separation or instrument air supply. IGS’ scope of supply for standard systems can also be extended with complete turn-key installations on either a single skid or inside an ISO freight container, including feed air system and all necessary receivers. IGS Italia distributes its products and services to the market also through IGS’ Global Sales & Service organization with offices in Germany, Russia, UAE and South Korea. www.igs-italia.com

Geologist Emmanuel Djorjee reviewing cores

“while recruiting locally meant spending more on training, it put money into the local community and increased their engagement with the operation” be monthly | 67

Reach for Aducolly Eng. Ltd. for your first-rate engineering services in maintenance welding & steel fabrication, pump installation, tank building, pipe welding & installation, cladding, conveyor servicing and steel structure erection.

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Perseus Mining did aptitude tests to identify Aducolly Eng. Ltd who would be best suited to Aducolly Eng. Ltd. also deliver to your specification in areas the challenge of working in such as belt splicing hot & cold, poly pipe welding, sand our operation. I was fortunate blasting & painting, agitator shaft/crush mantle building as to be on site the day the first well as apron feeder installation among others. We stand trainees arrived and had the distinguished by our level of commitment to duty and how honour of welcoming them to well we delight our clients with excellent customer service beyond their imagination. the site.� There were around eaducolly@yahoo.com a hundred young men and women, he says, all mightily enthused at the opportunity to become a part of a serious operation within their own community and at having the chance to learn new skills.

Quartermaine believes the best way to generate sustainability is through education because it equips people make their own choices.

Over the last two years Perseus has sponsored 90 students at Kumasi Technical Institute (KTI), instituted a scholarship scheme for students in the Edikan communities to further their education in second and in the future, tertiary institutions in the country and announced a sixmonth apprenticeship programme to train 120 young people in masonry, carpentry, electrical installation and plumbing.

Meanwhile his objectives for this year remain firmly to deliver on what has been promised, or at least planned. The process plant will be upgraded to increase throughput from its A view of the Edikan plant

“the best way to generate sustainability is through education because it equips people to make their own choices� be monthly | 69

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Perseus Mining H-Logistics

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present level of 5.5 million tonnes per annum to eight million tonnes per annum by July 2013.

From that point he expects gold production to go forward at a rate of some 250,000 ounces a year, with costs kept low so that the company can generate a substantial cash margin. Gold prices may be past their peak, but following this policy will keep Perseus in business where high cost producers crash out, benefiting proportionally when prices rally.

With the world class Edikan mine at full throttle, the subsidiary property in the Ashanti belt, Grumesa 20 kilometres to the east, is taking a back seat though drilling continues

50% Gold Room operator cleans slag residue from a bar of gold

Of workforce from just five local villages

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there. Any spare energy is being diverted to the Sissingué Gold Project in north-east Côte d’Ivoire. Only perhaps 300 miles distant, they are very different. If Ghana is switched on to its resources, its neighbour has less of a mining tradition though Quartermaine thinks it could vastly benefit from development. Following a very difficult and unsettled era, the country is now working very hard to upgrade its mining code so it presents a more attractive investment than its neighbours. But late last year, when the Perseus board was preparing to give the green light to construction of the fully permitted and funded Sissingué project, the Ivorian government started to talk about a super profits tax.

While not denying their need to benefit from their resources, developing governments sometimes overlook the need of overseas investors to see a fair return. So Perseus along with the rest of the world’s mining community is waiting to see what the awaited mining code will contain. “We would be delighted to be able to get into mine development in the second half of this year, with first production in the second quarter of 2014. But,” says Quartermaine, ever the prudent professional accountant, “we won’t commit if we are not certain we can achieve the kind of returns we need.”

However Sissingué is projected to 170,000 ounces of gold a year, at low cost.

Adding this project to Edikan would firmly establish Perseus among the leading West African gold producers.

For more information about Perseus Mining visit: www.perseusmining.com

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Molten gold in crucibles following a gold pour at Perseus Mining’s Edikan Gold Mine

Perseus Mining

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Namibia Diamond Trading Company

Bright shining light Diamonds have an undeniable attraction that has made them sought after by collectors, connoisseurs, investors, and lovers: a key part of the economies of southern Africa they are so much more than just another resource mineral

written by: John O’Hanlon research by: Will Kirby be monthly | 75

N

amibia Diamond Trading Company (NDTC) was established in 2007, to sort, value and sell diamonds produced by Namdeb (the joint venture responsible for mining activities in Namibia) and more specifically to establish a viable downstream diamond cutting, polishing and jewellery design industry in Namibia. In 2008 the man appointed as the new organisation’s chairman, then permanent secretary in the Ministry of Work, Transport and Communications, stepped into the leadership position of Chief Executive Officer at NDTC: in the subsequent six years Shihaleni Ndjaba has presided over the steady realisation of that goal.

NDTC is an equal partnership, or joint venture between the Government of Namibia and De Beers, the world’s leading diamond company with unrivalled expertise in the exploration, mining and marketing of diamonds, employing more than 23,000 people round the world. Its primary goal is to drive the growth of domestic diamond manufacturing industry and the creation of a sustainable downstream diamond industry in the country. The aim is to ensure the maximum, long term value from Namibian diamonds through world class sorting, valuing and sales practices in Namibia.

This strategy supports the development of new employment opportunities and a broadening of the skills base of Namibian citizens and will, it is hoped, encourage inward investment generally.

It has not been an easy time, he admits. The volatility in the international

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Namibia Diamond Trading Company

1,250 People employed by NDTC Sightholders

diamond market has affected the demand for jewellery, and as a consequence the demand for the rough diamonds traded by NDTC. You might have thought that wealthy people might think diamonds were a good investment at such a time, but the bulk of business activity is driven by consumption, not speculation, he believes.

But while waiting for green shoots to appear in the depressed global economy, things have gone really well for the diamond trade in Namibia itself. “One of our clearest objectives is to build up a vibrant and creative domestic beneficiation industry and here we have seen very satisfactory expansion,” says Ndjaba.

NDTC’s customers are called Sightholders – these are the suppliers of choice, selected in a rigorous process to determine their financial viability, technical capability and integrity.

They are appointed for three-year periods during which they have the right to buy diamonds offered to them by NDTC. Historically the centres of excellence in diamond polishing and cutting activities have been Belgium, Israel, India and New York. Now Namibia has its own group of Sightholders, incorporated in Namibia and employing an overwhelming majority of Namibians in their workshops. During the contract period that ended in 2012 there

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Namibia Diamond Trading Company

were twelve such companies in the portfolio, but in the three year period from 2013 to 2016 this has grown to 13. “Right now we have about 1,250 people employed by these 13 Sightholders,” he says, adding that out of a total population of around two million in Namibia and with 27 percent unemployment, that is quite an achievement.

There’s more. Though it is a highly skilled and creative industry, requiring a high level of craftsmanship as well as a great deal of creative and artistic flair, it is suitable for disadvantaged people who are keen

to learn new skills. Just to take one local Sightholder, Schachter & Namdar employs 160 people at its Windhoek factory, a third of them disabled, deaf or mute, modifying its polishing benches, installing handicapped restrooms and purchasing a modified minibus that accommodates wheelchairs.

So successful has this programme been that it has probably already reached its critical capacity. The number of diamonds being extracted in Namibia is not likely to increase. There have been no new discoveries on the land-based diamond

“One of our clearest objectives is to build up a vibrant and creative domestic beneficiation industry” be monthly | 79

fields, which are approaching the end of their life. And while Namibia has become the world leader in marine diamond mining since it started exploiting the beaches and undersea resources that won’t last forever, Ndjaba warns. “Our task is to make sure the Sightholders we do have work hard, maintain those jobs, and transfer their skills

to local people so that one day, even if we are not able to supply them with diamonds, they will be able to source diamonds from elsewhere.” The industry will then be self-sustaining, with all the skills and equipment that it needs in place, and able to supply any shortfall in local materials from international sources.

“Our task is to make sure the Sightholders we do have work hard, maintain those jobs, and transfer their skills to local people”

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Namibia Diamond Trading Company

Turning NDTC into a fully for training in cutting and localised operation has been polishing but they need also largely thanks to the success to understand how to assess of its training academy. rough stones. “They learn Originally the company something of the geology Cut diamonds shown at relied on expatriates from and chemistry relating to Shining Light, Windhoek De Beers to evaluate and rough diamonds and that helps them understand the sort the rough diamonds it receives from Namdeb but now their assortment that we supply to them.”

As time goes on, he continues, the number has reduced as Namibians have acquired their skills. Now the academy Sightholder community is becoming fully offers courses to staff from the Ministry indigenised. No longer seen as a local branch of Mines and Energy, the office of the of an international entity, these companies Diamond Commissioner and to diamond are able to take part in the monthly ‘sights’ or inspectors to equip them with knowledge sales weeks that are held locally and where about the appearance and quality of rough they negotiate for all or part of the diamonds diamonds. It is also open to Sightholders they are offered. Namibia is after all a stable – they have their own specialist facilities and secure location to base an operation, and

14,000

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there is no reason the companies that set up here should be limited to Namibian diamonds for their raw material.

One of the most successful and high profile ways that NDTC has found to promote the industry and take ownership of its African roots is the bi-annual Shining Light Awards. At the launch of the third such event in Windhoek on 21 February 2013 the theme was the Women of Africa, Your Light Shines. More than 14,000 expertly cut diamonds were shown, set into locally designed jewellery pieces, including some from neighbouring Botswana. The overall winner was Erkki Hifindwako, a visual arts student at the Namibia College of the Arts, whose 18-carat white and yellow gold ring set with 575 brilliant cut diamonds took its inspiration from a traditional Namibian basket weave. He was sponsored by Sightholder Julius Klein Diamonds.

“Our African women need to be celebrated,” says Shihaleni Ndjaba. “It is a commonly known fact that a house without a mother is just a house, but a house with a woman is a home full of love and comfort!” The awards are a great showcase for the Namibian diamond industry, the Sightholders and the talented young designers like Hifindwako who are emerging. “Even at the height of the recession we saw no collapse of the industry, so I think we are in good shape to face the future,” he concludes.

For more information about Namibia Diamond Trading Company visit: www.debeersgroup.com

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Namibia Diamond Trading Company

Working toward

CEO Charles Siwawa discusses the vital role that the Botswana Chamber of Mines (BCM) is playing in helping further develop the country’s rapidly expanding mining s

written by: Will Daynes research by: Vince Kielty

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Botswana Chamber of Mines (BCM)

ds excellence

g to sector

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Charles Siwawa, CEO of the Botswana Chamber of Mines

Botswana Chamber of Mines (BCM)

M

ining activities have been share ideas about how they could contribute taking place in Botswana to improving the mining situation in the since the nineteenth century country. Twice a year these companies would with the advent of the gold gather, along with leaders in the fields of rush in the northern part health, safety and the environment. However of the country and have since acted as the it soon became clear that for real progress backbone of the country’s economy. This to be made a dedicated office or Secretariat has been particularly true in the last four was required to carry out the functions of the decades, during which time Botswana’s group. This dedicated office was established hugely significant diamond sector has helped in 2010 with Siwawa at the helm. drive the economy to new heights. Today the Today the BCM boasts close to 30 members, mining industry remains the main driver over half of which are exploration companies, of economic activity in Botswana and is a figure that typifies the rapid increase in the forecasted to sustain the economy further number of companies now present in Botswana into the future. that are searching up and down the land for The Botswana Chamber of Mines (BCM) various minerals. Indeed the country’s mining is an organisation established sector has come a long way over 20 years ago with in a matter of a few decades the purpose of serving the from being a purely diamond and copper driven industry interests of mining and to a varied centre of mining exploration companies operating within the county, activity and this is reflected in The year the first together with associated the work of the BCM in 2013. diamond mine was industries. In its role, the BCM “One of our primary discovered in Botswana aims to ensure that legislation objectives at present,” in the country is conducive Siwawa explains, “is trying for mining companies and at the same time to diversify the economy away from being developing good working relationships with one that is single source driven and this the legislator and other stakeholders. has required the industry to look at the “The Chamber was formed with the idea potential of other minerals, rather than to represent the interests of the mining say just diamonds or copper. This approach companies within Botswana and really is also playing an important role in the promote their ideas to make sure that mining country’s Economic Diversification Drive, in the country takes place as smoothly and whereby the aim is to further rejuvenate responsibly as possible, and in a sustainable the economy of Botswana by internalising its own purchasing power in order to invest manner,” says its CEO, Charles Siwawa.

Initially the BCM was made up of a small capital across multiple industry sectors.” handful of companies which came together to Attracting foreign direct investment

1971

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(FDI) from overseas is equally fundamental to Botswana’s long-term prosperity. In this arena the BCM is working in conjunction with the government to attract investment by way of marketing what the mining sector has to offer in terms of medium-to-long term profits and growth opportunities.

As the government and the BCM look to

establish Botswana as a hub for mining activity, both are also aware that improvements do still need to be made internally to properly support the expansion of the marketplace. At the top of the list of concerns right now is the shortage of skills within not just Botswana, but the wider region.

“In order to combat this shortage,”

“we have taken it upon ourselves to focus a great deal of energy on developing the skills of Botswanan people”

Gem Drill site: exploration drilling for diamonds

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Botswana Chamber of Mines (BCM)

Smelter operations at a copper nickel mine

Siwawa highlights, “we have taken it upon ourselves to focus a great deal of energy on developing the skills of Batswana, many of whom will become the next generation of workers that will take the country into the future. We know that developing skilled people is a continuous and vital process that needs to be done to the highest of standards to remain in line with market demands.

In acknowledging this we are making our intentions of developing Botswana’s mining industry comparable to that of anywhere in the world very clear.”

Since the first diamond mine in the country was discovered in 1971 the mining sector has contributed an ever-increasing percentage towards Botswana’s GDP, a trend that shows no sign of diminishing any time soon, particular as the country braces itself for the next phase in its development. It is the BCM’s belief that the next launching pad for this particular phase will be the exploitation of Botswana’s coal reserves, thought to be the second largest in all of Africa.

“As a land locked country,” Siwawa states, “we are well aware that in order

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“Over the years the government has worked hard to develop the kinds of infrastructure networks this country needs” to generate revenue from these coal reserves a great deal of work needs to be done to improve the infrastructure of the region, particularly when it comes to road and rail networks that will be needed to transport the product to ports in Namibia, Mozambique or South Africa to be exported

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overseas. Such infrastructure will be of vital importance to the country, without which we would not be able to access the full potential of our coal reserves.”

It is the opinion of Siwawa, and many others for that matter, that despite coming on leaps and bounds as an epicentre for

Botswana Chamber of Mines (BCM)

Flamingos in the forefront of soda ash mining

mining in recent times Botswana remains grossly underexplored. Despite having a land mass equivalent to that of France, Botswana is home to little over two million people and thus only a select few areas of the country possess the necessary infrastructure to host the operations of multi-national mining players.

“Over the years the government has worked hard to develop the kinds of infrastructure networks this country needs,” Siwawa concludes, “while at the same time introducing water and power networks so that we are now able to branch out further across the land. Simply put,

this would not be the case if we didn’t feel that Botswana had an enormous amount of mineral potential still to be realised. Our diamond reserves have taken the country to where it is today, from amongst the bottom four poorest countries in the world to a middle-income nation and now we believe that with the resources that we are yet to develop, such as coal, the country can push itself even higher still.”

For more information about Botswana Chamber of Mines (BCM) visit: www.bcm.org.bw

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no

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Goldcorp - Éléonore Mine

partnership in orthern Quebec Goldcorp’s Éléonore gold mine is paying far more than lip service to the principles of stakeholder consultation, community benefit and local content

written by: John O’Hanlon research by: james boyle

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Goldcorp - Éléonore Mine

J

ames Bay, a tongue of water licking out between Ontario and Quebec, is by any standards remote. The Cree nation that lives on its shores have staked their claim, not always without difficulty, to such economic development as has taken place in the region, but today the greatest impact on their way of life is undoubtedly mining.

Nobody coming into this area should doubt the need to involve the Cree, as traditional owners of the land, in their plans. Perhaps the highest profile local business to have been developed is Air Creebec, founded in 1982 and today carrying more than 60,000 passengers a year – it’s a wholly-owned Cree enterprise, and its largest customer is Goldcorp, one of the world’s fastest growing senior gold producers, with operations and development projects located throughout the Americas. Goldcorp plans to fly more than a third of that number to its Éléonore project during 2013.

A Canadian company headquartered in Vancouver, British Columbia, Goldcorp employs more than 16,000 people worldwide however one of its most significant current projects is its fast developing Éléonore project located some 200 kilometres inland from the Cree centre of Wemindji on the east cost of James Bay. When it comes into operation in 2014, according to figures from a pre-feasibility study published in 2011, it should be processing 3,500 tonnes of gold bearing ore a day, extracted from an underground resource that is known to have a lot more potential than so far confirmed. By 2017 this rate will double,

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making the Éléonore mine one of Canada’s most significant gold producers, but as the deposit is ‘open at depth and along strike’ (there is more to be discovered below and beyond the areas already drilled) the ultimate limit is not yet known.

It is a brand new, greenfield site, says Guy Belleau, site manager at the Éléonore project and it has been moved forward in an exemplary way. “In February 2011 we announced that after a successful negotiation with our Cree partners we had reached a collaboration agreement with our First Nation partners, the Cree Nation of Wemindji, the Grand Council of the Crees (Eeyou Istchee) and the Cree Regional Authority.”

The agreement will ensure that the Crees receive a fair share in the project’s financial

Goldcorp - Éléonore Mine

Concentrator under construction

benefits. It protects the environment while supporting the Crees’ social and cultural practices in a spirit of continued collaboration, and establishes shared responsibilities in critical issues of environmental stewardship, community development, local employment, and small business development. It reflects an approach to working with indigenous communities that Goldcorp hopes will provide a benchmark for its own and others to use in

future projects, he says.

Construction started in November 2011, and has progressed excellently. “We are on schedule,” says Belleau. “We have dug an exploration decline, or ramp, that is now three kilometres long and down to 400 metres in depth, enabling us to initiate our diamond drilling definition so we can get better knowledge of the detail of the ore body and definition drilling also takes place from

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our 725 metre exploration shaft. We have also made a start on the production shaft. It is already 200 metres deep, but is projected to end up at 1,500 metres so still has a long way to go.”

A 63 kilometre road was built from the La Sarcelle Hydro-Quebec power plant which is located 60 kilometres from James Bay Highway, a 60 kilometre power line brought to the site, an airstrip constructed complete with

communications tower. All in all Goldcorp has invested $130 million in infrastructure at Éléonore. “We are in a win situation here with these world class infrastructures: there is no excuse now – we are going to deliver!”

Above ground there’s a great deal of building work in progress. The steelwork for the processing plant is substantially completed, and cladding has started. From May the ball mill that crushes the ore will

“Today 30 percent of our workforce are from the Cree communities - that is a great achievement just a year into the construction phase”

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Goldcorp - Éléonore Mine

be installed, an important milestone towards getting the processing plant ready to receive its first batch of rock from the mine.

At the moment Éléonore is a fly-in-fly-out operation served by Air Creebec, however a 400 person permanent camp is under construction. “The accommodation is just about complete, and we are starting to build a new kitchen facility, the recreational areas and a gymnasium – all that will be completed by the end of this year.” There will also be a world class tailings management facility, an administration building and a water treatment facility with a daily capacity of 26,000 cubic metres. Contributing to this hive of activity, 850 workers are currently at the site, which means that the mine is providing direct employment to around 1,300 people.

The permitting go-ahead from the Québec department of environment could have come at a better time than November 2011. Many companies would have put off construction till the spring, but Goldcorp thought it could perhaps save time by working the foundations for the concentrator and the production shaft through Canada’s unforgiving winter. “You know that every time we have obstacles or challenges our people respond,” says Guy Belleau with irrepressible enthusiasm.

“They always think outside the box and find solutions so we did pretty well to speed work up and build during the worst time of the year while keeping up the schedule.”

The solution was to build a shed over the foundations. It was, he claims, just like working in the summer! Additionally the

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“Firms like this will be training others in the community to create a sustainable industry” concrete elements for the foundation were cast in a factory off-site. “They arrived ready made so it was just like putting together Lego – that also helped us to speed up a lot.”

First and last, Guy Belleau believes in the mantra that people are the key to a successful project. “Our main challenge is to find the right people, and so far we have been very successful in attracting the best-in-class simply because of Goldcorp’s reputation in

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promoting people, safety and partnership.”

Staffing a project like this ought to be difficult, but it has not been hard. Good people really want to work for Goldcorp and gravitate to the company, as evidenced by the large number of résumés he gets on his desk.

Safety is an important pillar in attracting the best people, he continues. The results of the continuous improvement efforts were recognised by the Quebec Mining Association

Goldcorp - Éléonore Mine

Aerial view of the operations

when it awarded the FJ O’Connell trophy to Éléonore in 2011 to acknowledge an 85 percent improvement in safety at the site in the past three years. However training is also key where the First Nations are concerned.

A committee comprising 50 percent Cree and 50 percent Goldcorp employees meets regularly with the objective of maximising Cree employment, training and retention.

“Today 30 percent of our workforce are from the Cree communities - that is a great achievement just a year into the construction phase and we are very proud of it.” These are not just any jobs, he emphasises. “When someone joins us as a janitor or washing up in the kitchen, and a year later I see them working as technologists with the geology or explorations teams, or doing skilled jobs

like roof bolting underground, operating sophisticated equipment or shaft sinking it makes my job really worthwhile!”

Some operators who joined without qualifications or experience are now operating 50 tonne trucks underground, thanks to the ore extraction training program, and that really warms his heart. Now Belleau’s team along with Cree partners are developing a similar programme in mineral processing. “We think this is the first time, in Quebec anyway, that the Cree have had the opportunity to learn mineral processing. They will end up with a high school diploma in the subject.”

The first cohort of 16 students is already in session, he says.

That is important. The mine life is estimated at 15 years. It will probably be there decades

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Goldcorp - Éléonore Mine after that, but at some point it will stop but then there will be a core of experienced Cree able to take their skills anywhere in the world.

Outside of direct employment, he wants to leave a legacy of sustainable investment.

A laundry is being established by the Cree in Wemindji and Goldcorp participated in the purchase of some of the equipments. The new business has a three-year contract to wash all the overalls, all bed liners, sheets and cleaning cloths generated by the mine. “Firms like this will be training others in the community to create a sustainable industry,” enthuses Guy Belleau. “We promote Cree contractors on site too. Today 80 percent of the material brought to the site is transported by a Cree company.

And Air Creebec has added to its fleet thanks tour contract with them.”

But the First Nations are not only concerned with making money. One of Goldcorp’s proudest innovations has been the way it manages its tailings at Éléonore. “In consultation the Cree made it very clear they didn’t want traditional tailings management involving a large body of water under which we would do the tailings deposition. Water is very important to them. So we decided to filter 85 percent of the water and transport the thickened tailings truck by truck to the tailings facility.” The area is rehabilitated progressively, he adds, so that be the end of the project the tailings will have been already 95 percent revegetated.

For more information about Goldcorp - Éléonore Mine visit: www.goldcorp.com

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Osisko Mining Corporation

The golden touch

Osisko’s Canadian Malartic mine continues to go from strength to strength, as its first quarter results clearly highlight

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The mining complex

Osisko Mining Corporation

F

ollowing more than 800,000 metres of drilling and intense preparation, financing and community relations works, in addition to obtaining hundreds of permits and constructing the actual mine, it was in April 2011 that the first gold bar was poured at Osisko Mining’s Malartic mine in Canada.

The pouring of this gold bar represented a sight that had not been seen in Malartic for 28 years previously and what followed a month later was the commencing of commercial production. Today the Canadian Malartic deposit is recognised as being one of the largest gold reserves in production in the country with proven and probable reserves of 10.11 million ounces of gold. In fact this figure continues to grow to this day through on-going drilling on adjacent mineralised zones.

Osisko Mining Corporation, a mid-tier gold producer based in Montreal, Quebec, is a mining company focused on acquiring, exploring, developing and mining gold properties. In addition to the Canadian Malartic gold mine in Malartic, Quebec, Osisko continues its exploration work on the Hammond Reef Project in Northern Ontario, the Kirkland Lake Project in North-eastern Ontario, as well as other projects elsewhere in Canada and around the world.

The Canadian Malartic gold property is very much the flagship asset of the company.

Located in the heart of Quebec’s prolific Abitibi Gold Belt, immediately south of the town of Malartic, approximately 20 kilometres west of the town Val d’Or, the property includes the former Canadian Malartic underground

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Heard Tell us about your company and we’ll tell everyone else www.bus-ex.com

Osisko Mining Corporation mine, which produced more than one million ounces of As the Caterpillar dealer for Quebec and Labrador West, gold from 1935 to 1965 from Hewitt Equipment Ltd (Hewitt) has been involved as a ore containing three to six strategic supplier from the early stages of the Osisko grams of gold per tonne.

Canadian Malartic project. Relying on their expertise and The deposit is an Archean extended experience in servicing mining customers, Hewitt porphyry gold system, and Caterpillar supported Osisko in the areas of mining equipment optimization, project financing and operational consisting of a widespread effectiveness. Caterpillar state-of-the-art mining equipment shell of disseminated gold combined with innovative solutions such as Caterpillar Mine and pyrite mineralisation Star system, the industry’s broadest suite of integrated mine hosted by diorite porphyry operation and mobile equipment management technologies, and altered metasediments. helped Osisko in reaching new benchmarks of equipment Drilling and compilation reliability and mining performance. work has outlined a www.hewitt.ca gold mineralised system measuring 1900 metres by 350 metres, with a variable true thickness ranging from 40 to 270 metres to a vertical depth of 320 metres from surface. The system is open to the west and to the south at depth.

Between August 2009 and May 2011, Osisko invested more than $1 billion in capital expenditure into building its largescale mining complex, with more than half of that figure being spent directly in the AbitibiTémiscamingue region. Today, the Canadian Malartic Mine employs more than 700 people, most of them from Quebec, and they are the face of Osisko.

Osisko Mining commenced commercial production effective May 19, 2011. Commercial production is determined within the gold industry as the first continuous 30 day period of plant operation at a rate of 60 percent of design capacity, which is 33,000 tonnes per day for the Canadian Malartic Mine.

The company’s focus in 2013 is centred Gold pour on synchronising the mining and milling

Hewitt equipment ltd

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“The company’s focus in 2013 is centred on synchronising the mining and milling operations in order for the mine to reach its full production capacity” operations in order for the mine to reach its full production capacity. Part of this mission involved the construction of a second crusher plant that was completed at the end of the first quarter. This new plant incorporates the use of an XL Raptor 2000 crusher, which are among the largest cone crushers found anywhere on the planet, and its use will allow the mine to ramp up production further still

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by the end of the third quarter The main challenge that Osisko, and the vast majority of other miners throughout the world for that matter, faces today is its ability to attract and then retain a multi-skilled workforce, and the costs associated with that.

The industry is facing a shortage of technical men and women with the required expertise to take a project like the company’s Canadian

Osisko Mining Corporation

Malartic Mine forward and Osisko knows full well that no matter how good a plan may look on paper, in order for it to succeed it needs to have the right people in place to implement it.

In a concerted effort to combat this challenge the company are now in the process of identifying suitable third year graduates who would be interested in joining Osisko on a four year course of employment. At the end of this course these graduates will have gained all the necessary experience to potentially embark on a long-term career at Osisko.

On 9 April 2013 the company released a preview report of its operational results for the mine for the quarter ending 31 March 2013. Highlights during the first quarter of the year included achieving record gold

production of 106,047 ounces, record total tonnage processed of 4.23 million tonnes and record average daily tonnage processed of 48,389 tonnes per day, based on 87.5 operational days.

The month of March also saw the company achieve record one-month gold production of 42,521 ounces, record one-month tonnage processed of 1.59 million tonnes and record one-month average tonnage processed of 51,439 tonnes per day, all with an average recovery of 88 percent.

For more information about Osisko Mining Corporation visit: www.osisko.com

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Tunnel

vision Technical director, Íñigo Núñez Blanco discusses how international expansion and the adopting of innovative technologies have been key to OSSA’s growth

written by: Will Daynes research by: Gary Smith

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OSSA

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Hydro Power Plant tunnel

OSSA

F

ounded as a family owned mining established connections, and also booming company in Spain in 1952, economies such as Asia, where underground OSSA is today active across the infrastructure continues to develop rapidly.” globe and recognised as being a The company’s most important goal is to leading figure in the underground transform OSSA into a globally recognised construction sector specialising in three core tunnelling brand. Meanwhile, as Blanco business segments, those being construction, goes on to highlight, another crucial aim for energy and mining.

OSSA is to become what he refers to as a Over the last six decades the company global reference in the market for its high has been responsible for the excavation of quality standards and reliable solutions. “Our more than 700 kilometres of underground commitment to investing in research and tunnels, 75 kilometres of shafts and more development has allowed us to remain at the than 500,000 cubic metres of caverns cutting edge of new technologies and this in on behalf of clients such as Rio Tinto, Southern turn has resulted in increased productivity.”

Perú Copper Co, CODELCO, While global expansion is Narcea Goldmines, Somincor, vital to the company’s longPizarras Expiz, Iberpotash, term strategy, it does continue to value its mining operations Hullera Vasco-Leonesa and Hunosa. in Spain, where it currently Today the mining segment holds two contacts, one with The year that OSSA accounts for around ten León’s Santa Lucia coal mine was established and the other with Huelva’s percent of OSSA’s total Aguablanca nickel mine. activit y, with further Further afield, OSSA has recently been growth expected as investment in the industry continues in line with the rising awarded a contract from Anglo American price of metals such as copper and gold. in Brazil. “This particular contract, which Considering this, you might well say that involves digging a tunnel around 250 metres the OSSA of 2013 is starting to return to in length, while not the biggest we have ever its mining roots. It is doing so by carrying received, represents our first foray into Brazil,” out projects in Chile, Peru and Brazil, while Blanco enthuses. “This provides us with a also tendering for new opportunities in great opportunity to further establish OSSA other Latin American countries. as an important global mining company.”

“The international expansion of our Elsewhere, OSSA is to participate in a large operations has certainly been one of the main joint venture project on behalf of CODELCO drivers of our growth in recent times,” explains in the Andina sector of Chile’s mining sector. technical director, Íñigo Núñez Blanco. “In Work on this particular project is expected that sense our focus is very much on Latin to commence in the first quarter of 2014 and America, due to our cultural influence and OSSA is very keen to contribute its experience

1952

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700 KM Total tunnel length OSSA has excavated over its 60 years

Construction at the Hydro Power Plant, Cortes de Pallás

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to what may well turn out to be one of the region’s more significant undertakings in the years to come.

The last 12-to-18 months have also seen the company make a number of important internal moves, namely the preparation of its first Communication of Progress statement, something that will result in the company adopting a more comprehensive social responsibility governance framework when it is completed around July of this year.

In addition to this, 2012 also saw OSSA develop an Ethics Code of Conduct, which encompasses critical issues such as safety, labour and the environment, and will be published on its website in the weeks to come.

Looking ahead to what the future holds for the business, Blanco is aware that while the high price of minerals is currently the driving force behind the mining boom in many countries, such a situation is not sustainable in the long-term, meaning a downward trend in mineral prices is all but inevitable. When such a situation does arise it will result in new project investment falling and will create a scenario where new developments in the sector will be analysed according to a more demanding set of criteria.

“With this in mind,” Blanco concludes, “it is

OSSA

Bifurcation at the Carrasconte Mine for Minero Siderúrgica

“The company needs to continue its legacy of betting on innovation and investment in research and development” clear to all of us within OSSA that the company needs to continue its legacy of betting on innovation and investment in research and development, which we see as the best way of creating a sustainable company that has the ability to succeed in the long-run. One of the ways we will look to do this is by adopting new technologies, including those from other industries, particularly those related to the monitoring and automation of processes, to

increasing productivity and of course further guaranteeing worker safety. In turn we hope this improves the overall efficiency of our mining operations and our contribution to a more sustainable sector in general.”

For more information about OSSA visit: www.ossaint.com

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Marlin Mine:

Sustainable o

Through its Marlin Guatemala, a subsi to ensure the count

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Goldcorp - Marlin Mine

opportunities

n Mine operations, Montana Exploradora de idiary of the Canadian firm Goldcorp, is working try will soon be able to unlock its potential

written by: Will Daynes research by: Candice Nice

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Panoramic view of the processing plant

Goldcorp - Marlin Mine

P

ossessing a land mass of almost 109,000 square kilometres, the Central America country of Guatemala shares its borders with Mexico, Belize, Honduras and El Salvador, as well as the Pacific coastline to the Southwest and a part of the Caribbean coastline to the east.

Boasting a diverse history, a rich and distinctive culture, and areas of immense natural beauty, Guatemala has, in more recent times, become just as well known for its enormous gold potential. Indeed in 2007 one mine alone processed some 1.7 million tonnes of mineral with an average gold content of 4.55 grams per tonne and 84.31 grams of silver per tonne, further confirming the country as a mining destination of particular interest.

Possessing a stable, macroeconomic backdrop, Guatemala is fast earning a reputation as having perhaps the greatest future mining potential of any Central American country. Other factors that are helping to attract the interest of international investors include the free movement of goods and trade, and a local labour force with a reputation for being hard working, fast learners.

Spanning the boundaries of the San

“Guatemala has the greatest mining potential in Central America� special focus | 121

MARLIN MINE GOLDCORP

KAESER COMPRESSORS Tough screw compressors and the right technical support are the true solution in Central Americas Mines.

When integral and reliable solutions are required, in compressed air, Kaeser is the best answer. This is the case in Mina Marlin in Guatemala.

Mina Marlin operates through Montana Exploradora de Guatemala which is a subsidiary from Goldcorp (Canada) and being in production since 2005, with yearly average of 250,000 ounces of gold and 3.5 million ounces of silver, with reserves of 2.5 million ounces of gold and 36 million ounces of silver.

The mine is located in the department of San Marcos, 271 km from Guatemala City, but it takes 5 to 6 hours to get there by car from the city due to the last 20 km of dirt road.

Mina Marlin has today basically two mining stages: Underground mining: with a ramp 4.6 m wide and 4.9 m high for 20 tons dump trucks, and tunnels with pipes for compressed air, water, ventilation ducts and electric cables.

Process: until sodium cyanide leaching to separate the gold and silver minerals from the rocks, with cyanide destruction facilities to prevent and guarantee environmental and human hazards.

Although this is not the normal industrial environment, Kaeser compressors generate the compressed air, in Mina Marlin, for the blast process and for the ventilation tunnel drilling. We can find, for example, a Kaeser DSD175 compressor, installed at a depth of 350 meters, at 40 °C ambient temperature with lots of mine dust in the air.

Nevertheless, it is not only about really heavy duty equipment. “Kaeser made the difference due to their accompaniment, the installation, application and technical support”, as the mine superintendent engineer said. The system users are satisfied with the Kaeser compressors operation, thanks to their reliability, high volume delivery capability running at low rpms, and because they are very compact units that can perform in very harsh environments. The support and technical consulting have been keys to the daily improvements in the compressed air system in the mine. According to the mine manager: “No other company has provided us with such a complete technical consultancy”, exclaiming after the compressed air audit presentation, performed by Kaeser, in the mine. This as a mandatory task in order to really provide an excellent support, added to the close aftersales service and maintenance, supplied from the Kaeser subsidiary in Guatemala. www.kaeser.com.gt

BE WEEKLY | 1

Goldcorp - Marlin Mine

Mine entrance

Miguel Ixtahuacรกn and Sipacapa, located the Ministry of Energy and Mines of in San Marcos, the Marlin Mine was Guatemala into issuing a licence for the originally discovered in 1998 by two development and operation of the Marlin project, on 27 November Guatemalan geologists.

2003.

Follow ing t he Acquired in July 2002 by Canadian Company Glamis successful completion of Gold, it was they who, in the construction phase in conducting an exploration the third quarter of 2005, study, determined that the mine began producing the mine held a projected gold and silver before Gold recovery rate 1.4 million ounces of gold. the turn of the year. from the mine This projection spurred During the three years

98%

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MARLINMine MINE Goldcorp - Marlin between Marlin Mine 2003 feature and 2006 text tempor incididunt ut labore et dolore magna aliqua. Ut ap to pgo r oxhere....Lorem i m at e l y ipsum $300 enim ad minim veniam, quis million dolor sit amet, was consectetur invested nostrud exercitation ullamco iadipisicing nto t he elit, op er sed atordo ’s laboris nisi ut aliquip ex exploration eiusmod tempor activities incididunt and ea commodo consequat. overall ut laborepreparations et dolore magna for Duis aute irure dolor in exploitation. aliqua. Ut enim It ad wasminim then reprehenderit in voluptate in veniam, 2009 that quis Goldcorp nostrud invested an ullamco exercitation additional laboris $69 velit esse cillum dolore million nisi ut aliquip into ex theeaoperation, commodo eu fugiat nulla pariatur. with a similar consequat.

Duisfigure aute being irure Excepteur sint occaecat ploughed the business dolor in into reprehenderit in This is a caption this is a caption cupidatat non proident, sunt in 2010. Such Goldcorp’s in culpa qui officia deserunt voluptate velitisesse cillum commitment to nulla the longipsum dolor plant dolore eu fugiat pariatur. Excepteur mollit anim id est laborum. LoremSmelting termoccaecat success of the project sint cupidatat non proident, sunt sit amet, consectetur adipisicing elit, sed do that in culpa it intends qui officia to deserunt invest a mollit further anim $150 id from eiusmod such tempor investment incididuntand ut labore commitment et dolore million est laborum. into Marlin LoremMine ipsum bydolor 2014.sit amet, however. magna aliqua.

Indeed Ut enim the ad ripple minim effect veniam, created quis consectetur adipisicing elit, sedisdo eiusmod by nostrud this has exercitation spread throughout ullamco laboris businesses nisi ut It is not just the mine that benefiting

Brenntag brings to the Mining Industry a broad line of chemical products as well as alliances with both local and internationally known suppliers. With over 100 years of business experience, we are well positioned to provide customers with a diverse array of quality products and services at competitive prices.

In addition, we have an unparalleled ability

to support our multinational customers with Brenntag’s globally-based organization.

With distribution and sales locations throughout the United States, Canada, Europe, South and Central America, Africa, China, Australia and New Zealand, we are capable of meeting the needs of customers… from commodity to niche market products in a broad range of packaging containers and sizes.

Our product portfolio includes an extensive line of chemicals for use in different applications throughout the mining operations, including flotation, dust control, solvent extraction and water treatment. www.brenntag.com

special BEfocus WEEKLY| 127 |2

Atlas Copco specialises in providing equipment and solutions to companies involved in mining, rock excavation and construction. We develop, manufacture and sell services related to underground and surface rigs, underground haulage and transport, crushing, anchors, jet grouting, drill steel, exploration and a full range of parts and consumables.

Operating within the marketplace for 140 years, Atlas Copco is continuously looking to innovate in order to achieve sustainable productivity in the fields of surface and underground mining, infrastructure projects, deep drilling, geotechnical applications and civil works.

El área de negocios Mining and Rock Excavation Technique de Atlas Copco provee equipos y soluciones para construcción y minería. Desarrollamos, fabricamos, comercializamos y ofrecemos servicio técnico para nuestros equipos de perforación subterránea y de superficie, acarreo y transporte, trituración, anclajes, inyección de cemento, aceros de barrenación, exploración así como una gama completa de partes y consumibles.

Con 140 años en el mercado, en Atlas Copco innovamos continuamente para lograr una productividad sustentable en la minería subterránea y de superficie, en proyectos de infraestructura, perforación profunda, aplicaciones de geotecnia y obras civiles.

For the attention of Central American and Caribbean countries.

Atlas Copco Central America S.A. Panamerica Corporate Center Edificio 9080, Local #3, Boulevar de las Americas, Panamá Pacífico Ciudad de Panamá, Panamá Tel:+507 8306155 / 56 / 57 Fax:+507 8306160 www.atlascopco.com

Goldcorp - Marlin Mine

Local workers

in the local community with Marlin Mine today having more than 1000 suppliers, a figure that is helping to generate contracts worth over $907 million.

“One of the first things we recognised about this mine and what makes it so

unique,” explains Marlin Mine General Manager, Christian Roldan, “is just how well the ore itself responds to metallurgical treatments. When it comes to gold we have extremely high recovery rates of about 98 percent recovery and more than

“One of the first things we recognised about this mine and what makes it so unique, is just how well the ore itself responds to metallurgical treatments” special focus | 129

buildings • bridges • warehouses • mezzanines • industrial buildings shopping centers • special structures • civil works • pipes

MARLIN MINE, GOLDCORP 2011

MINERA SAN RAFAEL, TAHOE RESOURCES 2013

MINERA SAN RAFAEL, TAHOE RESOURCES, 2013

Guatemala | El Salvador | Honduras | Nicaragua | Costa Rica | Panama | Belize

Goldcorp - Marlin Mine

Exterior view of the water treatment plant

90 percent for silver. We also benefit from the fact that Marlin is located in a very strong mining district where, to this day, we continue to uncover new resources

around the main Marlin vein.”

Average annual production at the mine is today estimated as being 250,000 ounces of gold and around 3.5 million ounces of silver, with current reserves exceeding 2.5 million ounces Aceros Arquitectónicos of gold and 36 million Aceros Arquitectónicos, Grupo Ferroso S.A. is a company ounces of silver. In the five fully dedicated to the Manufacture and Assembly of Steel years between 2005 and Works. With 50 years of experience, we also focus on 2010 it has been calculated Civil Works and turnkey arrangement projects. Clients that some 1.2 million ounces like GOLDCORP, SOLEL BONEH, SAMUEL ENGINEERING, of gold, equivalent to over ENEL, etc. have made our operation renowned worldwide.

Structural engineers specially trained in designing metal $1.1 billion, that originated structures have the necessary equipment for structural from the mine was exported analysis and design, using specialized software such along with 18.2 million as STAAD Pro Ver 8, the most widely accepted program tonnes of silver, which in the world. There are a total of 220 employees in the generated $299.3 million in manufacturing area and 25 people in the technical area, export revenues. supervision and administration.

The production process www.acerosarq.com of the Marlin Mine is

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Procesadora de Minerales, S.A. –PROMISA- is a Guatemalan based company founded in 1971. We are the main suppliers of nonmetallic minerals to different industries, but also share our experience, technology, services and knowledge with the mining business.

Our main objective focuses on supporting our clients, which include Marlin Mine-Montana Exploradora/GoldCorp Guatemala, with high standard products, on site engineering services and training and tools aimed especially for mining processes, thus minimizing ecological and local community liabilities, and ensuring business sustainability.

We represent MI-HDD Mining & Waterwell, a MI-SWACO Division, as well as Diamantina Christensen Mining Products, known worldwide for its high efficiency drilling fluids, bits and tools, additives, products and equipment that increase the productivity of operations and reduce environmental footprint and fluid consumption.

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• Bentonite • Drilling Fluids formulated for both small and large borehole stability and core quality • Polymers • Fluid Loss Control Agents • Shale Stabilizers • Viscosifiers • Filtration Control Additives • Lubricants • Drill Bits and Tools

www.promisa.biz | info@promisa.biz (502) 23366696 | fax (502) 23366705 Guatemala City, Guatemala

Goldcorp - Marlin Mine divided into four phases, these being exploration, As miners go deeper underground to provide the materials construction, operation and on which the world depends, they need safe, reliable production, and technical equipment designed to handle demanding conditions. From closure and reclamation. “At the first cut to the last inch of the seam, we’re committed to present,” Roldan continues, meeting the needs of customer in every mining application “there are three main and environment. Our broad product line includes drills, loaders and trucks for hard rock applications, and underground areas that precision-engineered products. Since the beginning of we are mining. In order to Montana’s operation (Gold Corp Mine in Guatemala), extract the full potential of Gentrac has provided equipment, parts and services as what the mine has to offer support in their mining operation. Gentrac is grateful to we have had to overcome Marlin Mine for the confidence given. a number of challenges. www.gentrac.com.gt T hese have included creating ventilation systems for both on-going and future underground activities and establishing strong water controls around the mine site.”

Strong environmental controls have been a feature of the mine site since it first opened. Today these controls include the use of emergency response teams that are on call at all times of day to respond to all manner of events. These include responding to signs of increased sodium or sulphite levels in the surrounding water network or dealing with any issues that may arise during the transportation of hazardous materials. Such is the skill of

GENTRAC

1.4 million Ounces of gold Marlin Mine is estimated to hold Water treatment plant

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We at Ingenia are highly qualified in all areas of electrical engineering, industrial and mining projects.

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Goldcorp - Marlin Mine

the mine’s emergency teams that they were even called in to assist in the rescue and recovery efforts that followed the earthquake that struck the San Marcos area in November 2012.

In 2012, Montana Exploradora de

Guatemala commissioned the building of a tail filtering plant near to the mine.

The concept for the plant came about as a solution to how the operators could reclaim the open pit section of Marlin Mine that is no long in operation. The plant’s core

“Marlin is located in a very strong mining district where, to this day, its operators continue to uncover new resources around the main Marlin vein” special focus | 135

This is a caption this is a caption

Goldcorp - Marlin Mine function today is to dry the tailings from the mine in order for them to be used to fill pipes and cover the decommissioned pit wall in order to avoid further erosion or drainage.

The immediate future of Marlin Mine revolves around what Roldan calls an extensive aspiration programme. “We presently have a number of aggressive exploration programmes underway in many areas of the district surrounding the mine and we have been greatly encouraged by the results we have seen. This gives us great hope for extending the Marlin Mine network further into these parts of the region.”

In the meantime the operators also remain committed to setting a strong example of what responsible modern mining can bring to the country in the decades ahead, “On average,” national executive director, Mario Marroquin concludes, “mining in countries such as Chile and Peru accounts for as much as 12 percent of their annual GDP, while here in Guatemala that figure is more like two percent. If we were able to bring this up to just six percent, I believe the results of that would be more than enough to convince a great deal more people to begin accepting the industry and help them realise just how many positive benefits a strong, responsible mining sector could bring to the country.”

For more information about Goldcorp - Marlin Mine visit: www.goldcorpguatemala.com

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Marlin Mine:

Supporting development The legacy left behind by Marlin Mine in Guatemala is something of huge importance to its operators, Montana Exploradora de Guatemala, and is what drives its work in the field of corporate social responsibility

written by: Will Daynes research by: Candice Nice

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Goldcorp - Marlin Mine

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Area of environmental recovery

Goldcorp - Marlin Mine

L

ong before it commenced operations at its Marlin Mine asset, Goldcorp made a commitment to not only respect the cultural values of the local communities of San Miguel and Sipacapa, but also to support the sustainable development of the area.

It remains the company’s aim to seek out and establish strategic alliances throughout the region in order to promote its dedication to improve the lives of the local population and generate sustainable prosperity that lasts beyond the lifetime of the mine.

The operators of Marlin Mine, Montana Exploradora de Guatemala, a subsidiary of Goldcorp, are very much pioneers within the country of Guatemala. “We have known since day one,” Marlin Mine General Manager, Christian Roldan says, “that by being situated on indigenous land it has been fundamental to build strong relationships with local communities. By sitting down and listening to their concerns and needs we quickly found that job creation was a big issue for them. Today we are proud to say that approximately 90 percent of our workforce is Guatemalan, with 60 percent of these being people from the local area.”

Being a 24 hours a day, 365 days a year type operation, logistics is a hugely vital ingredient in the mines success. Once again the local community has become a major strategic partner in this area of the business. “We take great pride in the fact that over 68 percent of our suppliers are local providers,” enthuses materials manager, Pedro Richmagui.

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Keeping your world up and running

Fluke has the right tool for surface, underground and process on the mine Clamp Meter

Process Calibrator

PBX: 502-23695000

Diagram is not an exact physical representation. Diagram elements are not to scale and are for illustration purposes only. Modification of this document is not permitted without written permission from Fluke, Š 2010 Fluke Corporation. Reproduced with permission.

CNX Wireless

Power Quality and Energy Analyzer

www.conpro.com.gt

Thermography

Vibration

ventas@conpro.com.gt

Goldcorp - Marlin Mine In getting to this position, conpro the mine operators have We are a Guatemalan company with 18 years of experience worked tirelessly to develop serving the industrial power market in Central America, local businesses and to through the representation and distribution of global improve their understanding brands, leaders in each of its segments. We provide of mining and how it solutions in measurement equipments, distribution will become even more equipments for low and medium voltage, transformers built under design, electrical enclosures, cables for special important to Guatemala in application, and lighting fixtures. The wide range of the years to come. “A good options offering with the support and the guarantee of the example of our work in this companies we represent, along with the knowledge of our field,” Richmagui continues, sales force. “is how we have helped We have provided Mina Marlin electrical equipments along develop local transport with technical training for power quality, process calibration companies, bringing them and, certified Level 1 thermography for maintenance and operation in the underground and process areas, to keep up to a level of operational the mine up and running. excellence that means that www.conpro.com.gt when the day comes that the mine is no longer in operation the community is left with a strong enterprise that can then pitch itself to other organisations.”

While local communities have already experienced the benefits that mining can bring to the country, the perception of mining amongst the wider population of Guatemala remains somewhat divided. It is for this reason that the operators of Marlin Mine continue to make a concerted effort to bring people, groups and agencies together in order to highlight how a prosperous Locals prepare trees for planting

“Strong environmental controls have been a feature of the mine site since it first opened” special focus | 143

Proud to be Operating for Excellence with Goldcorp at Marlin Mine.

With over 20 active projects across two continents, Dumas brings ingenuity and expertise to some of the world’s most challenging underground mines.

www.dumasmining.com Toronto | Timmins | Val-d’Or | Guatemala | Chihuahua | Lima

Goldcorp - Marlin Mine mining industry can benefit Guatemala in the long term.

A trusted partner of Goldcorp since 1990, and onsite “While there is a large at Marlin Mine since February 2011, Dumas is proud number of people who to be aligned with every pillar of Goldcorp’s Operating support what we are doing for Excellence philosophy. For example, supporting the and understand the vital Grow Safety element, implementation of Dumas’ world role that mining has to play class safety program has resulted in 560,000 man hours with no LTIs at Marlin as of March 2013. Other in enhancing the economy elements of Operating for Excellence are demonstrated of a country by means of by consistent performance increases achieved by Dumas, greater investment and and a commitment to training and employing locally – revenue flows, one of our Guatemalans represent 76 per cent of Dumas’ workforce in core missions is to help instil the country. this belief in the rest of the www.dumasmining.com population of Guatemala,” states national executive director, Mario Marroquin. “This was never going to be a quick process, however trends do suggest that support for mining is slowly growing.”

While support for mining continues to build, other challenges lay ahead for Marlin Mine’s operators, in particular the question of what kind of legacy the mine will leave behind once it has closed. This is a question that has been posed not only to Montana Exploradora de Guatemala, but also to Guatemala’s local politicians and its national government.

“In planning for the future of the

DUMAS

10,000 Direct and indirect jobs created by the mine.

Reforestation in progress

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T H E E X T R AC T I O N O F G O L D A N D S I LV E R With Guatemala having many valuable natural resources, Productos del Aire can highlight the extraction of gold and silver, among others.

M.Sc. Juan Ram贸n Pallais | Special Applications Advisory | Guatemala Air Products, Inc. jrpallais@productosdelaire.com | Phone 2421-0400 Ext. 227

Overland Conveyor, Marlin Mine, GoldCorp, Guatemala

IGC covers virtually all types of services in various areas of engineering and construction. Our main focus began in the electrical-mechanical engineering and construction field. In 1992 IGC implemented a civil work division, due to the growth in the Central America industry. In 1998 the Operation & Maintenance division for thermal power plants was created. IGC basically ensures the coordination of local engineering, constructors and administration.

PBX (502) 66 44 18 00 grupoigc@grupoigc.com www.grupoigc.com DELIVERING INTELLIGENT SOLUTIONS TO THE CENTRO AMERICAN INDUSTRY SINCE 1970

Goldcorp - Marlin Mine

68% Of Marlin Mine’s suppliers are local providers

Productos Del Aire

We use a multi-stage process: first extract large amounts of land where the mineral is present then grind until a fine grain, where chemically separating the mineral soil in a process called Leaching. (Dissolving a metal in a liquid, such as water to separate the soil, so that the mineral suspension while floating on the ground or precipitated to the bottom of the tank) This is due to a chemical equation: Gold: 4Au + 8CN-+ O2 + 2H2Og4Au (CN) 2 - + 4OHSilver:4Ag + 8CN-+ O2 + 2H2Og4Ag (CN) 2 - + 4OHThey can be summarized as follows: Mineral + Cyanide + Oxygen + water - Mineral water soluble!

Finally this liquid with the precious metal is separated, and by another chemical reaction is precipitated mineral and melts the ingot ready for marketing.

E. jrpallais@productosdelaire.com

area around the mine,” explains corporate social responsibilit y director, Gustavo Cabrera, “we are looking at a host of factors, from ensuring the long term wellbeing of the local communities to making sure that they have the tools needed to bring economic activity to the area after we have gone. On-going efforts involve closing the gaps that exist in education, healthcare and

employment in order to boost the economy.”

Montana Exploradora de Guatemala has played a big role in various social development projects for the better part

The education complex

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RELIABLE SOLUTIONS FOR THE MINING WORLD Prodac´s Mining Unit specialises in providing solutions to rock mass stabilization in tunnels. For this purpose, we have quality products and professional staff in geo-mechanics, explosives and operations, that can provide technical advice and on site training.

Telephone: 51 (1) 613 6666 mineria@prodac.com.pe www.prodac.com.pe

Goldcorp - Marlin Mine of a decade, particularly in the fields of infrastructure, Tritech has been helping industrial customers for more education, productivity, than 40 years. With its origins in Guatemala distributing community relations and the brand Molub-Alloy (now within Castrol Industrial), the healthcare. Through its company has grown into a multinational company serving Sustainable Development the industrial sector from Mexico to Colombia. Focused only Department it has executed on lubrication, we have brought also automated lubricating systems, filtration and most important knowledge into our over 2,000 community offer so we can give documented savings to our customers. development interventions Our relationship with Marlin Mine started in 2005 with a and more than 150 detailed lubrication plan, training, implementation and close projects that have directly follow up in site. To this day we keep these tasks to ensure supported new and existing the best results possible. infrastructure found among www.tritechoverseas.com the local communities.

While Guatemala is slowly making positive steps towards greater social and economic prosperity the country does still suffer from significant shortcomings when it comes to education and healthcare, a fact that has long been a major obstacle in raising the rate of national productivity. Montana Exploradora de Guatemala understands that education is the cornerstone in the development of communities and as such it has striven to support the building and development of schools, school kitchens, computer centres and sports parks. To date the company has driven almost 300 initiatives Education in the local communities that share the same goal of improving

Tritech

“Montana Exploradora de Guatemala has made sure to integrate Goldcorp’s Environmental Policy into its Marlin Mine operations� special focus | 149

Quisertec, is a Central American Company with its central offices in Guatemala that offers a wide variety of lines of raw materials directed to the productive sectors of the region for the following sectors: • Food industry • Cosmetics • Pharmaceutical • Bottling • Mining Industry • General Industry In each of the countries in our market area, we have offices, warehouses and highly qualified staff to meet the needs of our customers, permanently keeping a stock of different products.

Quisertec would be happy to meet any requirement, as our sales policy is what sets us apart from our competition.

Visit our web page www.quisertec.com Tel (502) 23801300 | email ventas@quisertec.com

“Your best partner, in any business”

STEEL

I N D U S T R I A L S E RV I C E S

Steel Industrial Services is a company dedicated to designing, manufacturing and rebuilding of parts for mining equipment and the industry in general.

Services: • Installation of equipment • Manufacturing equipment of various structures • Repair and maintenance of various equipment • Welding • Maintaining different types of pumps and motors • Tool Supply • Contractor technicians in the fields of mechanics, welding and electricity • Electrical services Telephone: 00502 7840-3497 E-mail: servicios.industriales_steel@yahoo.com

Goldcorp - Marlin Mine the education standards Quisertec and experiences of those Quisertec, SA belongs to a group of 15 companies based within the municipalities in Central America focused on different activities in of San Miguel, Sipakapa, commerce, industry, services and agriculture. Quisertec, Malacatancito and Tejutla.

SA was founded in Guatemala in 1990 with the mission In terms of the help to provide complete satisfaction to our customers in the mine’s operators have our different areas of action. Achieving profitability for our customers, employees, suppliers and shareholders. provided ≠≠towards the Through personalized service and quality products and improvement of healthcare services. Represented in the area major manufacturing in the region it has aided in companies from 5 continents. the building and equipping www.quisertec.com of the Permanent Attention Centre (CAP) in San Miguel.

The creation of the CAP is a prime example as a responsible corporate citizen. of Goldcorp’s Sustainable Prosperity The CAP is today seen as an example of programme being put into action, assisting partnership between sectors. In addition in the company’s mission to be recognised to the efforts of Montana Exploradora de

Exterior of the CAP centre

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“Excellence in quality and service�

We have more than 30 years of experience in the design and manufacture of filter elements

Filter elements: Band filters, Rotary Vacuum Filters, Filter Presses, Dust Collectors

Forjas Santa Barbara, S.A. Barrio Oguena s/n, Apartado 49, Amorebieta - Spain Tel: +34 946 730 737 Email: forjas@fsantabarbara.com www.fsantabarbara.com

G R I N D I N G

M E D I A

Materials: Polypropylene, Polyester, Nylon, Aramid, Polyimide, PPS, Fibreglass Our products are manufactured in compliance with the requirements of each process. www.mfisa.com.mx

Goldcorp - Marlin Mine MULTIGROUP

MultiGroup is an industrial-commercial corporation that has more than 26 years of experience with in North America, Central America and the Caribbean.

We manufacture and commercialize a wide range of steel products. Our main strength is having three, first-class production facilities that allow us to manufacture according to the needs of our customers and in compliance with international standards.

We supply welded mesh for the Marlin Mine, which is used for structural reinforcement of the walls of their tunnels.

MultiGroup, has its own hot dip galvanized plant, which can offer all products on galvanized finish, in order to serve the industrial segment and specialized factories.

The product portfolio includes many steel products such as steel sheets, steel plates, foundation bars, beams, steel tubing, pipes, structural tubing, conduit pipes, roofing sheets, steel rods, welded mesh and drywall accessories. www.multigroup.com.gt

New operating theatre

Guatemala, the municipality of San Miguel provided the land and the Ministry of Health remains responsible for its operation and good performance.

The centre itself is equipped with the very latest technology that is used in a range of medical fields. The investment that all parties have made in the CAP means that today local Guatemalan communities are able to access better health care than they could previously receive.

In its role as a responsible mining company, Montana Exploradora de Guatemala has made sure to integrate Goldcorp’s

99% Of the water used at Marlin Mine is recycled and reused in other areas of the mining process Tilapia fish project

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Underground safety that goes beyond bolts, plates and resin.

In addition to being the leading manufacturer of resin cartridges for more than 40 years, Minova is a global leader in chemical and steel based consumables, associated equipment and services for rock bolting, ground consolidation, ventilation and water control for the underground mining industry.

These are just a few of the many products in the Minova family of innovative safety solutions: AirtiteÂŽ fiber-reinforced pre-mixed coatings for use on stoppings, overcasts and other ventilation controls.

Carbothix instantly thickening, fast curing injectable two-component silicate resin for sealing bolts.

Tekcrete Fast M low dusting, ultra-rapid hardening, high-strength gunite.

Ground Support Systems

Minova Mining Services, S.A. | Lo Echevers 300 | Quilicura, Santiago | Chile +56 9 9918 1878 | www.minovainternational.com

Seen Sika AG, Switzerland, is a globally active specialty chemicals company. Sika supplies the building and construction industry as well as manufacturing industries (automotive, bus, truck, rail, solar and wind power plants, façades). Sika is a leader in processing materials used in sealing.

The Sika target markets are: concrete, waterproofing, roofing, flooring, sealing and bonding, refurbishment and industry.

Contact us today and put your company in the spotlight! www.sika.com

vincent@bus-ex.com

Goldcorp - Marlin Mine Environmental Policy into MINOVA Ground Support Systems its Marlin Mine operations.

Part of Orica Limited, Minova is a leading global provider As part of this policy the of ground support and ventilation products used in operators are committed to underground mining. the responsible use of water, Minova manufactures mechanical, structural and chemical waste management, carrying based solutions for underground mining, infrastructure, out regular environmental tunneling and civil engineering applications.

Since 1970, Minova has offered a wide range of products monitoring, reforestation, and services for rock bolting, ground consolidation, promoting environmental fiberglass reinforcement, ventilation and water control. education and the reclamation Orica’s operations are in 50 countries, on six continents, of mined areas. meeting customers’ productivity, efficiency, safety and A sophisticated closed environmental challenges globally. circuit system means that www.minovainternational.com approximately 99 percent of the water used at Marlin Mine is recycled and reused in other areas of back for reuse. There are two water treatment the mining process, while processed water, plants in the vicinity of the mine itself, one of or sludge, is treated onsite before being which treats aerobic sewage while the other discharged into the tailings and then pumped processes it into tunnel water that is then

Nursery environment

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E-Mail: info@netcoretechno.com www.netcoretechno.com

ALL IN TECHNOLOGY FOR SURVEYING AND GEODESY • Netcore Technologies is a solutions integrator company for different fields and applications covering the Geodesy and Survey fields.

• We have a group of market leading brands to complement and accurate solutions that meet the needs of industry.

• In Netcore Technologies have experience at regional level for several solutions.

Working with large corporations in field solutions and equipment.

• As representatives of Trimble, a world wide leader in GNSS solutions, we have helped many organizations and countries in Central America to solve their needs in GNSS systems.

“WE ARE A CENTRAL AMERICAN COMPANY IN EXPANTION, LOCATED NOW AT GUATEMALA, EL SALVADOR AND PANAMA.”

Goldcorp - Marlin Mine safe to release back into the environment.

EVERLIFE is a Guatemalan company, founded in 2004 Montana Exploradora de with the mission to provide advice and consultancy in Guatemala has worked hard environmental, social and business management. Today, we to establish and implement serve several of the largest and most important companies regular environmental in there sector. We are conformed by a multidisciplinary monitoring programmes that team of professionals with extensive experience in extractive industries, renewable energy and transmission take place around Marlin and distribution of electricity.

Mine. These programmes We know our business and we know how vital this is for look to identify and monitor yours, so we offer integral solutions with the highest terrestrial and aquatic professionalism and quality, supported by the use biological resources and of ultimate technology and equipment approved and wildlife with the aim of helping recognized by international environmental agencies. to maintain Guatemala’s www.everlifegt.com ecological balance.

Soi l mon itor i ng is conducted annually to identify vegetation, macronutrients and nematodes, samples of which are in turn analysed at the laboratories of agronomy at the University Of San Carlos Of Guatemala. Meanwhile, studies of local flora and fauna are conducted by teams of ornithologists, mammalogists, herpetologists and entomologists in order to catalogue species of plants and animals and monitor their respective

EVERLIFE

300

hectares Amount of land Montana Exploradora de Guatemala has helped in the reforestation of to date Livestock project

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At Soiltec we specialise in the following areas: • Soil Nailing • Foundations • Marine Works • Industrial Works • Civil Works • Soil improvements Visit us at www.soiltec.com.gt

NEW PRECIOUS RESOURCE DISCOVERED

Click here to visit our dedicated homepage for the mining community www.bus-ex.com/mining BEST PRACTICE IN MINING

Goldcorp - Marlin Mine population numbers. crelosa To date Montana • Repair everything related to radio equipment.

Exploradora de Guatemala • Diagnosis office equipment without cost and scope of the has helped in the reforestation capital (applies departmental cost varies by region). of more than 300 hectares of • Vehicle Fleet Monitoring with GPS. land in the municipalities of • Construction and installation of towers.

San Miguel and Sipakapa, • Consultancy on special projects.

• Rent of TEAM radio communication. while more than 50 hectares of • Sale and installation of CCTV equipment . land was reforested between www.crelosa.com the two municipalities in 2011 alone. Indeed the operators are playing a core role in one of the Guatemalan government’s most important environmental schemes, that being the Forest Plan. The aim of this plan is to reforest an area of 199.5 hectares, of which over 100 hectares have already been covered.

From a social perspective, Montana Exploradora de Guatemala’s track record in recent years for generating local jobs cannot be disputed, what with some 10,000 direct and indirect jobs created through the mine’s operations, however it is aware that the task at hand now involves building up the capabilities of these same people in preparation for when the mine does close and the possibility that alternative employment may be required.

“One of our responsibilities, as we see it, is to provide our local employees and communities with the skills and expertise A local farmer

“One of our responsibilities, as we see it, is to provide our local employees and communities with skills that they’ll need to take on other roles in the future” special focus | 159

Reforestation panorama

Goldcorp - Marlin Mine that they will need to take on other roles in the future, both inside and out of the mining sector,� Cabrera highlights. “We know, for instance, that the land around the mine has great agricultural potential.

Therefore, what we have been doing is working to establish relationships with big businesses such as Wal-Mart in Guatemala and in Mexico in the hope of creating a scenario in which local Guatemalan agricultural companies can one day earn long-term supplier contracts.�

On top of creating employment opportunities, Marlin Mine has also contributed hugely to the development of Guatemala through the paying of taxes and royalties during its lifetime. Indeed the operators of the mine are recognised today as being one of the biggest tax payers in all of the country.

The Mining Act of Guatemala specifies that for each mining operation, one percent of the total gross sales from the production of gold and silver must be divided equally between the government of the country and the municipality of San Miguel. In its near decade of activity in the country Montana Exploradora de Guatemala has been more than happy to contribute such royalties, the proceeds of which have already begun to create a long lasting legacy by funding crucial infrastructure improvements within the area and beyond.

For more information about Goldcorp - Marlin Mine visit: www.goldcorpguatemala.com

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Mexico’s mining masters Priding itself on its logistical superiority and quality products, New World Mining Corporation (NWMC) is a key supplier of iron ore and iron ore pellets to the increasingly demanding international market

written by: Will Daynes research by: Louisa Adcock

162 | be monthly

New World Mining Corporation (NWMC)

W

ith the 13th largest economy in terms of nominal gross domestic product (GDP), Mexico has a long-standing tradition as a mining country with its history dating back to the pre-Columbian days, when mining was practised by the Maya, Aztec, Mixteco and Zapoteco peoples. Since those early days the country’s underground resources have played a significant role in the development and prosperity of its economy.

To this day Mexico’s geological potential continues to grow, attracting hundreds more national and foreign companies into the country that wish to commence new exploration projects, many of which are based in the northern states of Sonora, Zacatecas and Chihuahua. In figures for the year 2010 it was determined that the mining sector represented more than eight percent of the country’s GDP. It was also during this year that Mexico regained its position as the world’s leading silver producer, while also recording high production levels of copper, gold, zinc, bismuth, fluorite, cadmium, molybdenum, graphite and manganese.

Abundant iron ore and coal reserves, coupled with low labour costs, make Mexico an attractive market for iron and steel production. After Brazil, Mexico is the secondlargest iron ore producer in Latin America and the Caribbean, and consequently, Mexico’s iron ore production is dominated by a small number of large steel producers and a large number of small companies.

New World Mining Corporation (NWMC) is a large Mexican supplier of quality iron ore

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New World Mining Corporation (NWMC)

Terminales Portuarias del Pacífico

SAPI de CV(TPP)s, this Port Terminal will have an annual capacity of 6.0 million metric tons. During the first stage, it has a capacity of 3.0 million metric tons for bulk minerals and steel products handling, and rail and truck connection the Mexico north region and the US. Due to the dynamic nature of the mining industry, the increasing demand for steel and energy products and the highly competitive markets, more efficient alternatives are required. So, TPP is committed to providing its customers with better infrastructures to promote international trade with the Asian-Pacific – North American region.

• • • • •

INFRASTRUCTURE • Two berths with a capacity to receive cape size vessels of up to 150,000 tons of dwt.

• Navigation channel with a draft of - 16.5 meters (54.13 feet).

• Mobile cranes with grabs for loading/unloading different types of products with an average rate of 20,000 metric tons/day.

Capacity to handle up to 6.0 million metric tons annually.

Availability of a bonded storage area for importation products.

Capacity to deliver and receive cargo by truck and railroad.

Swift land connection to the country’s main roads.

Railway connection with the major industrial areas of the country and the southern United States.

www.tpp.com.mx

NEW PRECIOUS RESOURCE DISCOVERED

Click here to visit our dedicated homepage for the mining community www.bus-ex.com/mining BEST PRACTICE IN MINING

New World Mining Corporation (NWMC) and iron ore pellets to global Terminales Portuarias del Pacífico industrial users. As well as Terminales Portuarias del Pacífico SAPI de CV(TPP) is having its products directly the first specialised terminal for bulk handling and steel exported to the hugely products located at the Mexican Pacific in the Port of important Chinese market, the Lázaro Cárdenas, Mich. This port represents the most company has also developed competitive option for exporters and importers in Mexico a large network of suppliers, and the North American region. TPP will have two berths with a capacity to receive cape size vessels of up to vendors and logistic partners 150,000 metric tons of dwt, a draft of - 16.5 meters (54.13 who support their global feet, excellent rail and road connections. Our dock is operations. These operations equipped with state-of-the-art cranes, making loading/ see ore from Manzanillo and unloading vessels extremely efficient.

Lazaro Cardenas shipped www.tpp.com.mx to end users on a turnkey basis. In more recent times shipments of high-grade iron ore from Bellary and Hospet areas of Karnataka have begun regularly to China and the Far East.

The importance of being able to deliver a regular supply of iron ore to China cannot be overstated for one second. China is currently the world’s largest consumer of iron ore, as well as being the largest importer.

NWMC is a business that is constantly looking to expand and as such it continues to explore various inroads and opportunities to diversify its mining offering through the discovery and export of rare minerals, copper and pig iron. In addition to this the company is benefitted by having the financial and logistical capacity to undertake projects

“The company has developed a large network of suppliers, vendors and logistic partners who support their global operations” be monthly | 167

related to mineral extraction, mining operations, processing and commercialisation.

The company has contracts and marketing arrangements with different mining companies and large mineral suppliers in different locations globally. It is continually looking to solidify and expand its business relations in the industry, specifically focusing on providing

good value for its clients and partners.

NWMC is committed to adding value to its customers by providing high quality standard processed minerals with reliable service through its logistics network and excellent financial support. It is continually looking to create supportive and collaborative global business relations.

“Since the very beginning NWMC has built its success on several core foundations, none more important that its quality controls and logistical strength�

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New World Mining Corporation (NWMC)

Loading the iron ore into heavy dump truck at the open cast mine

The company operates its mines and processes minerals according to internationally approved specifications, before selling them directly to its overseas clients. NWMC prides itself of possessing the highest of mineral iron ore standards that it claims are far greater than that of its competitors. The reason behind this is simply that it replies on the quality of the minerals it extracts from Mexico’s fertile underbelly, which itself is seen as being far superior to that found in other regions. Meticulous and innovative processing allows the company to provide high-grade and certified iron to its international customers.

Since the very beginning NWMC has built

its success on several core foundations, none more important that its quality controls and logistical strength. As the company turns its attentions to the future it is making considerable strides to expand its global reach, having recently appointed one of the largest shipping companies in Shipco, whose task it will be to ensure that its minerals are delivered safely and efficiently, while always retaining the qualities that brought it such success in the first place.

For more information about New World Mining Corporation (NWMC) visit: www.newworldminingcorp.com

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Copper from the high Andes

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Collahuasi The giant Collahuasi open pit operation in northern Chile is the world’s fourth largest copper mine: it aims to be a model for other operators in operational excellence, social responsibility, and safety

written by: John O’Hanlon research by: Candice Nice & Robert Hodgson

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Collahuasi

C

ollahuasi, or to give it its full name Compañía Minera Doña Inés de Collahuasi SCM, is a joint venture owned by two equal mining majors, AngloAmerican and Xstrata, with 44 percent of the shares apiece. The remaining equity is in the hands of a group of Japanese interests led by Mitsui & Co Ltd, one of Japan’s largest trading companies and including Nippon Mining & Metals and Mitsui Mining & Smelting. Not surprisingly, then, Japan is an important taker for the mine’s products, mainly copper concentrate of which 417,282 tones were produced in 2011, with a smaller amount of copper in the form of 99.99 percent pure copper cathode, of which 36,002 tonnes were sold. In all this represents 8.6 percent of all the copper content produced in Chile over that year.

The Chilean, Japanese and Chinese markets together account for around 80 percent of Collahuasi’s exports of copper concentrate while over 70 percent of its copper cathodes go to the Chinese market. In the case of the molybdenum, a by-product of which 6,659 tonnes were produced in 2011, 99 percent is sold within Chile and the remaining one percent exported to Thailand.

The mine is located in the Andean plateau 4,400 metres above sea level in the Tarapacá Region of the far north of Chile and close to the border with Bolivia. It is a poor but fertile region, with some of the most significant vineyards in Chile and a very long history of mineral extraction, best known in the past for its production of saltpetre. Copper has been exploited since

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Seen Photography: Efluent treatment plant

INTEGRATED MULTIDISCIPLINARY SOLUTIONS FOR ALL STAGES OF THE MINING PROCESS GEOLOGICAL STUDIES • MINERAL CONCENTRATION • HYDROMETALLURGY • TAILINGS • WATER MANAGEMENT • INTEGRAL DESIGN OF MINING FACILITIES • ENVIRONMENTAL ASSESSMENTS • RISK MANAGEMENT • MINE CLOSURE • EPCM PROJECTS

Contact us today and put your company in the spotlight!

vincent@bus-ex.com

Collahuasi 1880 when the Tarapacá ICV systems of high-grade ICV celebrates the 50th anniversary of its foundation copper and silver veins and 16 years of uninterrupted relations with Compañía began to be attract interest.

Minera Doña Inés de Collahuasi as a strategic partner for Fast forward to 1991, when integral mining services. a combination of satellite, www.icv.cl aerial photography and onsite studies, along with drilling activities, resulted in discovery of the Ujina deposit. From the concentrator plant in Ujina, a 203-km slurry pipeline leads down to the filter plant and loading facilities in Punta Patache, 65 km south of Iquique, Tarapacá’s capital. The molybdenum plant is also located here as well as the port terminal from which processed products are shipped to markets around the world.

The feasibility and environmental impact studies for the Collahuasi Project were approved in 1995 and at the end of 1996, once financing of Collahuasi’s environmental impact studies was approved in 1995, construction and development began by the end of 1996, and commercial production commenced in 1999. Since then it has grown into one of the biggest players within Chile and internationally. Nevertheless it has a future that promises to eclipse its past.

An ongoing pre-feasibility study for the company’s proposed $6.5 million Phase III

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expansion project will pave the way towards a total copper production target of more than a million tonnes per annum (tpa) by 2017, which would make it the biggest mining project in Chile.

It should be noted that the company’s Phase III expansion project, which envisages an investment of US$6,500 million, has reached the pre-feasibility stage. Following this initiative, Collahuasi hopes to be producing over one million tonnes of copper content annually by 2017, positioning it as the largest mining project in Chile. The impact across the Tarapacá Region in terms of job creation, goods and services driven by the supplier base

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and contractors would also be a great boost to the region. When it is considered that in 2011 more than 9,000 contractors’ personnel were working alongside Collahuasi’s 2,600 direct employees, the contribution of this project alone to the economy of the region can be seen clearly. The expansion embraces some significant improvements in water efficiency, so vital in Chile’s uplands. The Phase III development will see the implementation of tailings thickening, increased water recycling and the use of desalinated water at the mine.

In 2011, Collahuasi invested more than US$14 million in environmental projects of which over 40 percent was devoted to the

Collahuasi

“We know that mining is one of the economic sectors with the highest short, medium and long-term growth prospects” treatment and disposal of waste. The efficient use of the water is a key objective of Collahuasi’s sustainable development strategy and this is reflected in its high water management standards. The company has developed a sustainable water extraction policy with demanding targets – a good example of

the best practices being implemented is shown in the impact of mining activity on the Jachucoposa Wetland and Spring, the main water source affected by extraction for Collahuasi’s operations.

The company undertook to contribute to the restoration of the natural water flow.

Thanks to the measures it has taken, water flow in the Jachucoposa Spring has shown a sustained increase from 12.6 litres per second in December 2007 to 39.2 in December 2011 – in other words, water flow increased more than threefold in just four years. Additionally that year the company reduced its unit consumption of raw water for the fourth consecutive year. This not only reflected the greater efficiency it achieved but also positioned Collahuasi as an industry leader in the field of water management.

But people come first. “We consider the contractors and their staff a key element of our operations,” remarked CEO Giancarlo Bruno. “We therefore, seek to ensure that their working conditions are similar to those of our own employees.” In 2011 the company made a number of infrastructure improvements, principally regarding living conditions, canteens and recreation facilities.

It has also been implementing a supplier development programme, co-financed

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by the Chilean government’s Economic Development Agency (CORFO).

From the start of its operations, one of the values to which Collahuasi has given most emphasis is its commitment to the development of the communities of the Tarapacá Region. This is reflected in a range of initiatives that seek to enhance the quality of life of their inhabitants in such fields as arts and culture, entrepreneurship and job creation, education, social development as well as health and sporting activities. In 2011, its investment in community relations projects amounted to more than $13 million.

For Collahuasi, its people are the company’s principal asset and their commitment and collaboration are essential for its sustainability. For this reason, it constantly develops initiatives that contribute to the welfare and progress of its workers and their families. These initiatives include the company’s training programme, its policy of local hiring, its Apprentices Programme and the pension, health, educational and housing benefits it provides. They also include imaginative social programmes. For example, in July 2009, Collahuasi signed the historic Techos para Tarapacá (Roofs for Tarapacá) alliance with the Un Techo para Chile (A Roof for Chile) Foundation, the

Ministry of Housing and Urban Planning (MINVU) and the También Somos Chilenos (We are Chileans too) Leaders’ Corporation, an organisation that represents shanty-town inhabitants. The goal of this four-year project is to overcome the harsh housing conditions and social exclusion of the Tarapacá Region’s most vulnerable families, building definitive housing for 1,477 families from the 13 shanty towns that still exist in the region.

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Collahuasi

Education is the way out of the cycle of deprivation in this community. “In our relations with the Tarapacá Region,” says Bruno, “and as part of our undertaking to contribute to educational improvement, we continue to work through the Collahuasi Educational Foundation. We know that better education is one of the great aspirations of the people of the Tarapacá Region and, indeed, of all Chileans. Through the Foundation, we can help to improve the quality of life of children and young people and we continue to see progress in the attainment of pupils at the 18 schools that form part of our programmes.”

In 2011, the company’s direct employees received a total of 302,102 hours of training, equivalent to an average of 108 hours for each person.

With a 50 year estimated mine life Collahuasi is certain to play a vital part in northern Chile’s continued economic development. As Giancarlo Bruno puts it: “We know that mining is one of the economic sectors with the highest short, medium and long-term growth prospects. That implies great challenges which we must manage correctly in order to transform them into opportunities for our company’s growth and the development of our collaborators and a better future for the Tarapacá Region and our country.”

For more information about Collahuasi visit: www.collahuasi.cl

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A first for Vietnam The Ban Phuc nickel mine represents a new industry for Vietnam, and is perhaps the first of a number of nickel projects to be developed by Asian Mineral Resources

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

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Asian Mineral Resources

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nalysts talk of Vietnam production in June 2013. “We are flat out becoming the fastest growing finalising construction of the process plant Asian economy, reaching a ten and the infrastructure to support that,” says percent growth rate within AMR’s CEO Simon Booth, who has moved to the next twelve years with Hanoi to oversee progress of the company’s one of the main drivers being its natural 90 percent owned subsidiary Ban Phuc Nickel resources. The country has significant known Mines (BPNM). “Our activities are very much deposits of many bulk and niche minerals, focused on getting the plant operational, including bauxite, rare earths, tungsten, and restarting the underground operations titanium, phosphate, coal and iron ore but next month, leading to the opening of the with the exception of its coal most current processing plant at the end of June,” he says. mining operations are on a small scale. There The mine represents nothing less than the is a huge opportunity there for large-scale start of a new industry, and while there is a development, since the mining industry limited amount of expertise in the country, the Vietnamese are hungry currently contributes only for additional skills. “The two percent of Vietnam’s GDP, if oil, gas and coal are mining industry is not a well developed industry here,” excluded.

Nevertheless, with China he explains, “but that said on its northern border Vietnam every mine presents its own Jobs at the mine once has to be in the best place to challenges of drawing on the it’s in production supply the mineral needs of national expertise and talent its powerful neighbour. For and developing that. We these reasons there was bound to be a lot are bringing in a number of trainers from of interest in the country’s first nickel mine. overseas to train up the local workforce, Asian Mineral Resources (AMR) listed on the though the general level of education here is Toronto Stock Exchange’s Venture Exchange high, and there’s a strong will to acquire new in 2004, focusing all its efforts on developing skills.” If specialised mining is something of the massive sulphide nickel resource located a new area, a strong engineering base exists on what is now identified as the Ban Phuc in the country. It is just a question of taking Project Area located160 km west of Hanoi in those skills and moulding them to what is Son La Province, in north-western Vietnam. required on a mine site, he says.

There’s no need to dwell on the period Currently the progress of the mine sounds from October 2008, when metal prices frenetic. As the finishing touches are made fell and work was suspended until market to the process plant, the infrastructure to conditions improved in 2012 and the project support it – the power connection to the could be restarted. Since the end of last year national grid for example – is being installed all systems have been go, aiming for first and tested. The tailings storage facility is being

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Seen

Contact us today and put your company in the spotlight!

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prepared, and at the same time preparations are going ahead for the recommencement of underground operations in May, so that there will be some ore ready for processing when the mill opens at the end of June. Once built the ore processing plant is expected to process 1,000 tonnes of run-of-mine ore per day to improve its nickel concentration from 2.2 percent to 9.5 percent. The process plant consists of a crusher, ball mill, classifiers, flotation cells, thickeners and filter press.

Before the mine was put into maintenance mode nearly a kilometre of underground development and shafts had already been prepared, Booth points out, so this is not like starting a mine from scratch. “We have already intersected the ore body on two different levels, so much of the hard part

Asian Mineral Resources

Overview of the plant site

is already done.” Concentrate from the mill will be packed in two tonne bags for ease of handling and transportation, but also to reduce dust. Then it will be taken by truck from the mine site to the port of Haiphong and sold to the international market through a Hong Kong based commodities trading group.

In the immediate vicinity of the mine the majority of the people available are either

unskilled or semi skilled. For technicians it is usually necessary to spread the net wider, throughout Son La Province or beyond. If they can’t be found in Vietnam, then they are brought in from abroad. There’s a core of people who were working with AMR back in 2008, and who are very keen to get back into the saddle. For the rest, an intense training programme started at the end of 2012. “They are doing very well under our expat training

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team, which includes one trainer that we recruited from a mine in Laos. It has been very much easier for him to understand the culture here and the key tasks that are needed to build a successful training programme.�

The programme uses recognised training modules that have been translated into Vietnamese. They are learning to operate some very sophisticated machinery controlled

by PLC (programmable logic controller) systems accessed by HMI (human-machine

interface) with output that is largely numerical and graphic so language is less important than the ability to read figures. Having been involved pre-2008, another contractor Aurecon is returning to provide electrical, and control and instrumentation design as well as engineering, procurement and construction management (EPCM) services for the process plant, slurry line to the tailings dam, and potentially the underground mine.

At the time of writing there are around

“We have already intersected the ore body on two different levels, so much of the hard part is already done�

Plant worker carrying out maintenance

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The next phase of construction being discussed

250 people working on the site, but once the mine is in full production numbers will rise to around 400, perhaps 10 percent expatriate.

The actual mining operation will be carried out by a specialist contractor from Australia.

Mancala was appointed in December 2012 under a three-year contract to supply the underground mine with development and pre-production personnel, mine equipment and management services to develop and mine some 350,000 tonnes of ore annually.

The company is bringing in its own expert trainers, however it aims to have a largely Vietnamese workforce within six months.

“The best thing in underground mining,” says Booth, “is to keep it simple. This is an operation that will be raising standards in safety, health, environmental performance and in the way it looks after its community

and it will be a proud place.”

Though the resource as defined at present will support commercial mining for around six years with more than 200,000 tonnes of nickel and copper concentrate, its extent could be considerably greater – with a consequently longer mine life. “It has very good exploration potential, and geologically this is a very attractive area for new nickel resources to be located,” says Simon Booth.

“We will recommence drilling after we commission the process plant, and I can see AMR operating in Vietnam for a great deal longer than just six years.”

For more information about Asian Mineral Resources visit: www.asianminres.com

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Safe and

secure One of Mongolia’s leading providers of security and infrastructure services and solutions

written by: Will Daynes research by: Will Kirby

Tridum e-Security LLC

S

ince 2005, Tridum e-Security has been providing high quality services and solutions to all manner of industry fields including the finance, enter pr ise, t e l e c o m mu n i c a t i o n s , transportation, logistics, mining and government sectors.

Today the company is recognised for offering information and communication systems securit y and professional network infrastructure services, as well as being an expert provider of planning, implementat ion a nd maintena nce solutions that are linked to banking software and hardware.

Tridum e-Security boasts a workforce made up of qualified and experienced individuals, among them certified engineers who have graduated from both domestic and foreign universities, and have a track record of exchanging experience with specialists from the likes of Cisco, Thales, and many other wellknown companies.

These employees are one of the primary reasons for the company’s success and are fundamental to its ability to provide its clients with customised solutions. It also provides professional services in the form of network architect, architecture design, security and encryption product development and evaluation, information security, unified communications, a liaison centre, data centre, and application delivery and service management.

Tridum e-Security commits itself to guaranteeing stable network performance

and excellent efficiency via best practice and advanced technologies so as to help customers to reduce operation costs.

The company’s mission is to be a leading company that provides update information and technology with its customers on the basis of demand for aggregated solutions of information and communication, using revolutionary techniques.

For its part, Tridum e-Security has formed business and technical alliances with some of the world’s leading providers of IT solutions such as Cisco Systems, Thales Group, Diebold Inc., Hewlett Packard (HP), Giesecke&Devrient. Therefore, the International Council of Electronic Commerce Consultants (EC-Council) has recognised Tridum e-Security LLC as an Accredited Training Centre in Mongolia.

Tridum e-Security possesses a long list of successful projects that have taken place across Mongolia on behalf of all manner of clients, from the Ministry of Nature, Environment and Tourism and the Information, Communication, Technology and Post Authority to Khan Bank, Mobicom Corporation and of course Oyu Tolgoi Co., LTD. For the latter, the company has completed projects including the supply and installation of network equipment, the configuration of various software platforms and the first two phases of IP phone development.

For more information about Tridum e-Security visit: www.tridum.mn

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Fuel for the fu

Toro Energy is emerging as the first company to commenc uranium exports from Western Australia: it is ready to establish a new industry and cement Australia’s position a a reliable supplier to the growing nuclear economies of As

written by: John O’Hanlon research by: Jeff Abbott

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uture

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as sia

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I

t has happened. Vanessa Guthrie told hopes – and expects - that on-going drilling us she was not anxious about the twice will extend the size of the resource and the delayed approval by Australia’s Federal lifetime of the project considerably.

Minister for Sustainability, Environment, She has invested a lot of her personal Water, Population and Communities energy in developing the project to this Tony Burke to go ahead with Toro Energy’s point, culminating in her appointment as A$269 million Wiluna uranium mine, but Toro’s Managing Director in December the uncertainty must have cast a bit of a 2012. A noted advocate of sustainability cloud over the Easter break. In the event and environmental best practice, and with the decision came through on April 2, in the an impressive track record with several wake of last October’s Western Australian mining majors, it was no great surprise Government environmental approval for when she was named as 2013 Outstanding Wiluna and completing environmental Professional Woman by the Chamber of assessment processes that have lasted almost Minerals and Energy of Western Australia. three and a half years.

But for now most of So Dr Guthrie, Toro’s her attention is focused on Wiluna. It is a calcrete hosted Managing Director, was deposit, close to the surface. delighted to realise she “The pits only go down 15 would be leading Western metres, so it will be a surface Australia’s first uranium Reactors planned by sales in 2015. “Wiluna is one strip mine,” she explains.

India and China alone of the few projects in the “The tailings are returned world capable of bringing to the pit progressively, so new uranium production to the market in the at the end of the project the landscape will medium term, when a shortfall is predicted look just as it did before.” There speaks the environmentalist, who puts a lot of effort into from 2015 onwards,” she says.

Wiluna is bang in the centre of Western listening to and working with the Traditional Australia and a thousand kilometres from Owners of the land. “There are two native Toro Energy’s head office in Perth. Toro’s title claimant groups involved, and I think flagship and wholly-owned Wiluna Uranium we have been very respectful of their cultural Project, which has a regional resource base heritage in the region. A good example is of 54 million lbs, is situated 30 kilometres where we are building a thirty-kilometre to the south of the township of Wiluna. The haul road between our two mining sites, project is the most advanced of the new Centipede and Lake Way. In determining both generation of uranium mines in Australia. the mining footprint and haul road alignment It’s expected to yield 1.8 million lbs of we negotiated with the Traditional Owners uranium oxide concentrate per year over a about areas they did not want us to disturb.”

This included an area of the Lake Way lifespan of at least 14 years, though Guthrie

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Toro Energy

Dr Vanessa Guthrie, Managing Director

Toro Energy

Resource evaluation pit - Wiluna

deposit which is very sealed and numbered, placed important to the local people, on pallets and loaded into so they were pleased that containers. “Our production Toro was prepared to avoid volume is just four sea these culturally significant containers – or two trucks – Overall cost of areas and respect their per month. We will take it to Wiluna mine wishes. Wiluna will use an Port Adelaide by road: it’s a alkaline leach process rather 40-hour trip but as the first than the acid more commonly used in mineral producer in WA it makes economic sense to processing plants. The process of grinding, co-ship with other producers and through leaching and extracting uranium from the the currently permitted ports based in either ore to produce a concentrate is a standard South Australia or the Northern Territory.” hydrometallurgical circuit, which will be For Toro to ship through a Western built on site, next to the Centipede deposit.

Australia port would delay the cash flow, so However uranium oxide concentrate is a that would never make sense at this stage, high value, low volume product, so rather than she explains. Port Adelaide is a certified and being transported in bulk it is transported permitted secure port that has been handling by truck in sealed, lined drums, security radioactive material safely for over 30 years,

A$269m

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Toro Energy

The Wiluna site at dusk

so is the quickest and most secure way to get infrastructure but Vanessa Guthrie is very excited by its potential. If you were looking the product to market.

Despite its remoteness, Wiluna has good for a precedent, you’d have to think of Tanami infrastructure thanks to the long history of Gold’s operations in the Tanami Desert, now mining in the region. The project is reached the centre of a thriving community, she says. via the Goldfields Highway and lies close to “Operations like these require an airstrip the Goldfields Gas Pipeline. Wiluna also has and investment in local infrastructure, but a sealed airstrip, which can be used for fly-in- on the positive side they give those remote fly-out arrangements, similar communities their best to a large number of mining opportunity for economic companies throughout the participation.” Theseus is outback. virgin territory, with the Toro Energy’s next potential to become an uranium project further to important new uranium the northeast on the border province for Australia, and with the Northern Territory is it could generate a lot of Depth of the uranium another matter. The Theseus employment and training deposit at Wiluna opportunities for traditional project is less well served by

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communities in the area, one of her and Toro’s key objectives.

Whereas Wiluna is near the surface, the uranium at Theseus is found in sandstone horizons around 120 metres deep. But that does not make it harder to win. It will, Guthrie believes, lend itself to in situ recovery, or ISR mining. The method is commonly used in other uranium provinces in the world, where a well field is constructed to extract the uranium by establishing a circulating solution flow that becomes laden with uranium. The surface impact and consequent rehabilitation is minimal. The only impact is potentially on localised groundwater flows, and these would be carefully monitored and protected, Vanessa Guthrie assures.

Toro has declared a maiden resource at Theseus, with an exploration target range still to be tested to determine the size of the potential resource. The next stage? She would like to find more Theseus-type projects: “We are looking to build a portfolio of projects that will move us up the list of global producers. In the current environment, that leads you more to the ISR type deposits as the next generation of uranium deposits world-wide are likely to be lower grade and will therefore demand greater capital and operating cost efficiency.”

The opportunities for finding uranium

in Australia seem almost limitless. It holds 30 percent of the world’s economically recoverable uranium, she says. “Toro Energy aspires to be a mid-tier global uranium producer over the second half of this decade.

Currently ten major mines produce 80 percent of the global supply to world markets. The opportunity for Australia to become a more significant player lies in developing new projects like Wiluna.”

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Vanessa Guthrie at the Toro offices

India and China plan aggressive nuclear power production growth in the next five to seven years. Around 28 reactors are currently under construction in China, 20 in India, and both countries plan exponential growth in their nuclear base load, she says. “The primary uranium mining projects available to fill that gap in 2016/17 are quite few. Major projects currently in production are at capacity.

Emerging projects coming into production have been significantly delayed over the last couple of years in particular.” Australia is blessed with political and economic stability unlike some of the other territories that hold uranium resources. It may take a long time to get uranium projects up and running, as evidenced by Toro’s experience with environmental permitting, but it will be

looked on favourably by offtake partners.

With the hard work of permitting now complete, all efforts will be on financing the project, probably through an equity and offtake agreement with a partner with a healthy nuclear programme in China, India, Korea or Japan. Talks are already under way: there’s no lack of interest, she hints, and her goal is to be in a position to make a final investment decision by the end of this year.

Meanwhile the company is financially secure, sitting on sufficient cash to be able to fund its planned exploration and running costs.

For more information about Toro Energy visit: www.toroenergy.com.au

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Em

The T larg grea

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Petroperu

mbracing the modern way

Talara Refinery Modernization Project is Petroperu’s gest undertaking, the results of which will contribute atly to the sustainable economic development of Peru

written by: Will Daynes research by: David Brogan

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Petroperu

I

t was in July of 1969, during the presidency sulphur content to a maximum of 50 ppm, of Juan Velasco Alvarado, that Petroperu thus requiring the company to essentially was created based on La Pampilla Sate formulate an entirely new project that Refinery and expropriated refineries. In would comply with the said standards. This the more than four decades since the is what inspired the company to embark company has been a major contributor to the on its mission to develop a modern Talara Refinery with fuel production which meets country’s economy.

This comes in spite of the considerable the quality requested by the country’s political, administrative and macroeconomic legal regulations and international challenges it has faced over the years. From the markets, within a framework of social outset Petroperu was tasked with operating responsibility, environmental protection and maintaining virtually every complex oil and adequate profitability.

A megaproject of engineering and patch in the country by itself. It was thanks to the skills and dedication of its Peruvian construction, the modification involves the workforce that is was able to continue expansion of existing units at the refinery as well as the installation of deliver i ng pet roleum products without any supply new process units, services disruption, thus becoming and other requested facilities.

The project itself exists the most important stateowned company in Peru. within a framework of social Today Petroperu’s largest responsibility, environmental The year that Petroperu project is the Talara Refinery protection and the generation was formed Modernization Project, of market opportunities and has been given the name an undertaking that the company highlights as an example of a “Proyecto Modernización Refinería Talara” successful South American mining energy (PMRT). Upon completion it is expected to and minerals project that is increasing its result in cleaner air due to the reduction in influence locally and internationally. sulphur content in diesel and petrol, clean The company’s involvement with the waste gas emissions from the refinery, reduced Talara Refinery dates back to 1998 when liquid fuel imports and an improvement in it first contacted Texas based-consultancy the commercial balance of hydrocarbons.

The social and environmental impact of Bonner & Moore to carry out a study to help adapt the refinery to current needs, the project is expected to benefit the Peruvian improving the quality of diesel fuels with population on a number of levels. The Talara a maximum sulphur content of 2,000 parts economy will be boosted by additional direct and indirect works, especially during the per million (ppm).

The passing of legislation in March 2006 construction period and this will undoubtedly brought in rules regulating diesel fuel result in better economic opportunities

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Making our planet more productive Operating in Peru since 1996, Praxair is now the country’s leading manufacturer of industrial gases—supplying atmospheric, medical and specialty gases nationwide.

Its eleven industrial gas facilities are strategically located across the country, helping ensure supply reliability for all customers. Praxair also offers a wide range of technologies that can help customers increase efficiency, improve productivity and enhance environmental performance. In short, Praxair provides the products and services that are making our planet more productive.

www.praxair.com

PRAXAIR

With its 50-year track record of serving the refining industry worldwide, Praxair has the experience to help refineries succeed in today’s challenging environment. For decades, Praxair has supplied hydrogen gas to produce cleaner burning transportation fuels and applications technologies that help refiners improve their processes. Praxair’s innovative industrial gas-based application technologies help our refining customers to do more with less, from enhancing product performance to reducing environmental impact.

Refineries are facing a number of challenges today. Government regulations are tightening fuel specifications and standards. The crude slate has become heavier and increasingly sour, requiring additional process flexibility.

These demands have intensified the search for more efficient ways to use and manage hydrogen supplies. For this reason, Praxair

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delivers the expertise and innovation required to optimize efficiency and reduce costs associated with refinery hydrogen use. Praxair’s optimization technologies and experience can reduce volumes by recovering the hydrogen and heavier hydrocarbons from refinery fuel gas, saving both hydrogen and fuel costs. This reduces operating and capital costs, enhances margins and decreases greenhouse gas (GHG) emissions.

Managing the fuel gas system is integral to running refineries at optimal efficiency.

Inefficiencies can often occur when the fuel gas and hydrogen systems are too closely linked, with purges and bleeds from the hydrogen system going directly to fuel gas and significantly impacting both its quality and quantity. Praxair has the in-house expertise to analyze such systems and find technologies to meet overall energy and hydrogen

PETROPERU Petroperu

requirements. In addition to conventional methods, Praxair refinery gas-processing technology enables the use of problematic fuel gas streams as feed for a steam methane reformer or as fuel for a gas turbine. This leads to higher returns, since those streams no longer need to be blended or segregated, something that further exacerbated “fuel gas long” issues.

Praxair is focused on designing and constructing the most effective industrial gas plants, on time and on budget, using stringent industry safety standards. Praxair uses its extensive operating experience to design and build its hydrogen facilities to the highest standards, ensuring the utmost in safety, reliability and efficient supply. We also strive to enhance supply reliability and offer customers a high level of operational flexibility by investing in necessary infrastructure where

possible, including pipelines and byproduct sources.

In addition to Praxair’s hydrogen expertise described above, Praxair has also developed expertise in various technologies for refining industries. One such technology increases the throughput of fluid catalytic cracking (FCC) units that are air blower limited, cyclone velocity limited, coke burn limited or wet gas compressor limited by injecting oxygen into the combustion air. Praxair has installed more than fifteen FCC oxygen enrichment units around the world. Global refiners are discovering how oxygen enrichment in their FCC increases the unit processing capacity with a small capital cost investment. This is accomplished while realizing other significant operational advantages. www.praxair.com

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Petroperu

The Talara refinery

for Talara. Furthermore, local businesses in Talara and other parts of Peru will be tasked with providing goods and services to the refinery during the construction and operation phases, providing economic opportunities to many people.

From the point of view of environmental feasibility, the Talara Modernization Project

will improve the air quality of Peru, as well as the surrounding water quality, and it will not release oily or solid waste which is harmful for the environment. The proposed updates and the new units that will be added to the Refinery will be designed to comply with or exceed World Bank environmental rules, national rules and all local regulations.

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El Milagro refinery

“This project will help guarantee that Petroperu is able to continue creating significant value for Peru and its citizens for many years to come�

The environmental investment projections are included in the general capital investment required for the modernisation. The current estimate is that the capital investment for the environmental part will be of approximately $1.3 billion. This amount includes the contingency factor or the location factor.

It cannot be denied that it has been a long and challenging process to get the project to

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the point where it is today. It was recognised from a very early stage that such a large scale project would require a significant investment of time, technology and capital resources.

Based on a feasibility study carried out on behalf of Petroperu by Arthur D.Little it was clear that the costs of the project would be substantial and that even when taking into account its use of fast-track engineering and

Petroperu

The Conchan refinery

construction strategy it would not be able to commence operations until 2016.

While these factors may have put off a number of operators or companies, the fact is that the numerous social and environmental benefits that the modernization project will bring to the region make it very much worth the time, cost and effort of all concerned.

This project will not only result in bringing in an attractive economic return, but will also help guarantee that Petroperu is able to continue creating significant value for Peru and its citizens for many years to come.

Today the implementation of the modernization project is well under way, with the preliminary engineering and technology phase having commenced at the end of 2009.

Worker inspecting the pipeline

Come the estimated culmination of the undertaking in 2016 it is expected to have achieved a number of positives, not least of all increasing the value of Petroperu as a business. On top of this the project will have transformed the Talara Refinery into one of Latin America’s most modern, increased its production capacity by approximately 50 percent and most importantly of all it will have done more to promote the sustainable economic development of the region than perhaps any project of its kind before.

For more information about Petroperu visit: www.petroperu.com.pe

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Les Gaz Industriels Limited (LGI)

The desire to diversify Managing Director, Jérôme Commins discusses LGI’s diversification over the years and its plan to expand into Africa’s emerging markets

written by: Will Daynes research by: Vince Kielty

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L

es Gaz Industriels Limited (LGI) was originally incorporated as a private company in 1952, with 100 percent Mauritian equity and the core aim of producing oxygen and acetylene for metal cutting and welding purposes. Eleven years later a majority stake in the business was acquired by leading South African gas company African Oxygen Ltd (Afrox).

This significant development helped shape the future of LGI, transforming it into a business that has diversified hugely throughout the years into a wide range of products, specifically the manufacture, sales and delivery of medical and industrial gases in bulk and in cylinders, the manufacture, sales and delivery of welding electrodes, installation of gas reticulation, project management, maintenance contracts as well as water treatment, with a growing market share in the Mauritian market and abroad.

It was on 5 April 2008 that Jérôme Commins was employed by LGI, taking on the role of Finance and Administrative Manager. In December 2009 he took on the position of acting Managing Director, before taking full lead of the business in February 2010.

“In the time since,” Jérôme states, “we have undergone massive developments as a business and today find ourselves in the midst of a huge investment programme where we are putting significant capital into new technologies for the production of liquid oxygen, liquid nitrogen, liquid carbon dioxide, liquid argon and all types of gases that we produce locally,”

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1952 The year that LGI was incorporated as a private company

One of Jérôme’s most personal, and challenging, undertakings since he took on the role of Managing Director was to convince the board of LGI to invest massively in the acquisition of a new state-of-theart production plant at the company’s site in Mauritius. Having put his case forward successfully the company is now looking forward to taking delivery of the plant no later than September of this year.

“This new plant will open up a whole new world of possibility for us,” Jérôme enthuses. “While our existing facilities have served us well it has been obvious for some time that we needed to modernise, upgrade our capabilities and increase our stock and storage capacities in order to grow not just on a local level, but also in terms of regional and international expansion, while remaining competitive.”

“One of LGI’s proudest achievements” Jérôme states “is the fact that we have among our Partners, the largest fleet of IMO Type 7 ISO Tankers in the region.”

Jérôme is also confident and more than happy that the tanks the company supplies are well-maintained, marine certified and regularly recertified in accordance to class requirements, making LGI a preferred lessor

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If we placed all our industrial gas cylinders in a line, they would cover the surface, and even more, of a football ground

to its customers. One most important aspect that Jérôme highlights is that the tanks can be refilled on LGI’s site in Mauritius and re-forwarded throughout the world.

Having been established in Mauritius for well over 60 years, LGI finds itself in as good a position as anybody to offer its support to international and multi-national companies

looking to set up operations in the Indian Ocean or on the African continent. This is particularly true when it comes to the company’s welding operations, for which it is perhaps best known for its production of the well-known Vitemax brand.

“One of the things I am working on at the moment,” Jérôme explains, “is

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“Jérôme knows that despite LGI’s success to date, the company must continue to improve, and this all starts with the company’s most valued asset, its people”

There are no higher priorities than the health and safety of our employees, customers, suppliers and the community, and the protection of the environment

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Les Gaz Industriels Limited attracting investors from the welding sector to come and make things happen in Mauritius by importing the components and equipment needed to produce locally, before expor ting t he finished items back into core regional and African markets. In many ways I would like to see Mauritius become something of a hub for this sort of activity and we are already in discussion w it h severa l I ndia n a nd S out h A f r ic a n companies that share our long-term vision.”

While Mauritius itself is currently experiencing strong organic growth, the company is well aware that Whenever anyone buys anything from LGI we always put 100 percent of enthusiasm behind it further opportunities await it in a host of surrounding markets, especially those in Africa. “Our and abroad in the very near future. strategy for expansion,” Jérôme says, “is Although LGI is a company based in a to first target other small markets before small country it still harbours a strong desire moving deeper into Africa. This is a goal to be involved in large projects in some of that we believe we are in a strong position the busiest markets in the world. Today it finds itself in a good position to achieve to accomplish.”

In addition to its aforementioned aims, this thanks in part to its involvement with LGI is also looking to move into the supply the Ambatovy mining project, one of the of carbon dioxide to a number of large most ambitious industrial undertakings in multi-national players, including Coca-Cola the history of Madagascar. and PespiCo. Furthermore, the company “Our involvement in this project is has designs on expanding further into fascinating, not only because of the size and the healthcare and homecare markets, importance of the project but also in terms providing its services to clients both locally of the volumes of our products that we are

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Les Gaz Industriels Limited supplying to what is a logistically challenging island location,” Jérôme enthuses. “Indeed we have faced some minor obstacles in getting our products delivered on time and to specification to Madagascar, but we have succeeded in doing so and therefore have proven ourselves capable of taking on the most challenging of tasks and exceeding our customer’s requirements.”

Not one to rest on his laurels, Jérôme knows that despite LGI’s success to date, there is more to be achieved and in order to do so the company must continue to improve, and this all starts with the company’s most valued asset, its people.

“Our human capital is of vital importance to us and that is why we will continue to focus on their continuous development, providing them with the training needed.”

To this end the company has a number of exciting training programmes that will continue throughout the course of 2013.

Meanwhile it will continue to provide its employees with the opportunity to travel abroad to train in specific fields, with various Partners currently based in Italy, France, South Africa, Canada, Singapore and India.

“As our people grow,” Jérôme concludes, “so too will our business as we work to rapidly develop our overall offering, while at all times retaining the efficiency, competitive prices and product quality that LGI has become synonymous for.”

For more information about Les Gaz Industriels Limited (LGI) visit: www.gaz-industriels.com

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Chantier Davie

More than shipbuilding Davie is more than just Canada’s largest shipbuilder – more than any kind of shipbuilder: its ability to provide end-to-end turnkey solutions and its strategic location makes Davie an ideal partner for a range of industries from oil & gas to defence

written by: John O’Hanlon research by: Celina Bledowska

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Chantier Davie

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he Davie shipyard at Lévis, just director of that company and Davie’s present across the Saint Lawrence River CEO Alan Bowen, conducted a thorough due from Quebec City, traces its origins diligence exercise before committing to their back to 1825 when it was founded bid, which was accepted in November 2012. by an English sea captain called The yard has had many different owners, Allison Davie. Over its long lifetime it has but none with the experience this team built more than 700 vessels and drilling and had in working with investment companies production platforms and seen shipbuilding and turning around distressed shipbuilding technology develop from wood and sail. During assets. “Before we bought Davie we spent World War II, Davie built 35 warships (mine about nine months actually at the shipyard sweepers, corvettes and destroyers). Davie has with a team of about ten people with a mixed also fabricated numerous other products for a set of skills – technical, legal, commercial, variety of industries including financial, operational and power, defence and transport. the like – looking to see what It is not altogether clear had gone wrong before, and how we could make it better.” how Davie got into such Ultimately, he points out, a mess, culminating in its failure to be selected for the Davie is the largest shipyard Canadian Government’s $33 in Canada, one of the biggest billion National Shipbuilding in North America, and one Cost of each vessel Davie Procurement Strategy (NSPS) of the largest general steel is building for Cecon in 2011. Not for the first time fabrication sites with coastal in its long and largely very access in Canada. It may not distinguished history it had been rescued from have built a ship since 1997 but it has completed administration, this time by a joint venture some very big projects, equivalent in scale to a between the leading Canadian engineering new build, including the conversion of LASH group SNC Lavalin, a Korean shipbuilder and carrier to a DP pipelay vessel as well as a major the Canadian Upper Lakes Group. However upgrade for a Petrobras semi-submersible when it failed to get any part of the major production platform to almost double its defence business these backers pulled out and production capacity. the provincial government of Quebec, which One of the things that gave ZM Industries had been putting money into the yard to keep an edge over its competitors – and there were it ticking over, was again left with the problem several heavyweight international groups of what to do with it. involved in the process – was its singleThere followed a period of uncertainty, minded commitment to the acquisition, culminating in the purchase of Chantier Davie Vicefield thinks. “We took a big risk by Canada Inc by ZM Industries, an O&G service dedicating a significant amount of resource group. The ZM team led by Alex Vicefield, a to the project, commissioning environmental,

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legal, operational and management studies and getting vendors in at an early stage to see where improvements could be made. I think that stood us in good stead during the bidding process.” One of ZM’s core competencies, he adds, is its project management experience.

Just before the purchase of the Davie yard the company had completed the $100 million conversion of the oilfield installation ship Sampson to a pipe-laying vessel. By giving the job to the Viktor Lenac yard in Croatia, itself just out of bankruptcy, he says, the job was done to international standards of quality, at the lowest possible cost: the high risk was offset by putting together a team of experts from within the group and running the project on best yard management practice.

With unequalled skills and all the scale necessary, Davie was nevertheless stuck with some outdated systems and practices.

The biggest change has been a radical change in the manner of working there, says Vicefield. “Previously they were doing ‘build by discipline’, which meant that teams of electricians, welders, pipe-fitters and so on would be working simultaneously across the whole ship. During the due diligence we noted that was causing a lot of reworking.

We changed that to a ‘work zone’ and ‘work package’ approach. For each work package we separate the ship into zones and have a zone manager responsible for each. That allows us

to keep real time control of the build and it is a more accurate way of measuring progress than simply counting the man-hours spent.

This way we can record the work packages as they are completed: it is much more accurate.”

Another major departure was to install an RFID system throughout the yard, working in parallel with the shipyard management system that covers all functions from procurement to workflow management, financial controls, health and safety and HR. Workers had been used to using paper clock-in tickets: now they

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The senior management team

have RFID swipe cards, and The contracts were worth the completion of every work something in the region of package is logged in real time. $170 million each - a major In addition to its knowledge headache for Cecon that first of shipyard management one brought Alex Vicefield and ZM into the picture: “They were of ZM’s key strengths was the financially heavily reliant on ability to unpick the complex Davie’s weekly steel financial involvement of the those ships being delivered,” construction capacity he says. The financing that several interested parties.

Davie is of strategic important had been arranged with major to the provincial government international bondholders and the federal government but also to the had to be restructured, and Vicefield was owner of the three vessels that were already appointed to the Cecon board to represent under construction in the yard. The Norwegian these bondholders’ interest. “When the offshore and subsea installation contractor opportunity came up to buy the shipyard we Cecon had contracted three specialised vessels jumped at it because we knew that it was a for pipe-laying, installation ROV and seismic unique facility in terms of the O&G business, work in 2007 but in 2010 work was suspended. let alone its other potential.”

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Naturally the first priority was to restart the work in progress on the three ships awaiting completion. The sale of Davie to ZM Industries in December followed by the completion of a $280 million financing agreement with York Capital Management on 20 February this year came as a huge relief to the shipowner. The first vessel, already 80 percent complete, will now be delivered by November of this year.

The other two will follow in 2014.

With the business secure, other pending projects could go ahead. As we said, Davie has over the years been a strategic asset to the Quebec government. On May 16 its ferry operating agency La Société des traversiers du Québec (STQ) was able at last to confirm its order for two dual-fuel LNG ferries to operate on the St Lawrence River. Each 92 metres long,

Chantier Davie

A vessel under construction

these vessels will have over 625 lane metres across two decks, allowing the transport of over 115 vehicles, 200 passengers and ten heavy goods vehicles. The dual-fuel LNG engines, an environmentally friendly choice, are a perfect fit with Davie’s specialisation in advanced propulsion and vessel manoeuvring systems says Vicefield. “We come from the O&G sector where you build vessels with unique designs rather than churning out

commoditised vessels. This allows us to play on our core skills in specialised propulsion systems and unique designs.”

Alan Bowen, the CEO of Davie is a global authority on dynamic positioning (DP) systems, he adds. The vessels being built for Cecon are to be equipped with DP3 dynamic positioning systems, the highest grade with least two independent computer systems and a separate backup system. It’s one of the reasons why ZM

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was undoubtedly a better owner for this yard than any of the large Asian shipbuilders that had expressed an interest. Such companies are versed in the production of commoditised tankers and container ships whereas ZM has brought in the know how associated with the specialised, highly customised vessels needed increasingly by the hydrocarbon sector, as well as defence and even fishery customers.

Among the residual equipment at the yard is the commencement of a project to build two

accommodation vessels for 400 personnel – also with DP as an important part of the spec.

That project was stalled when the original client went bankrupt, but Davie is now planning to build these and either operate them on its own account or lease them out.

“The market for vessels of this kind is very strong at present,” he says.

Losing out on NSPS was undoubtedly a kick in the teeth for Davie, but the situation is different now. The yard that was chosen is much smaller

“We have never been to a shipyard where we have seen such high quality workmanship in welding and the other key shipbuilding skills”

Working below decks

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Chantier Davie

The fabrication workshop

capacity than Davie, with a steel construction capacity of around 70 tonnes a week against Davie’s 300. Nevertheless there is still a lot of defence work to be contracted out, and in any case NSPS would have tied up the shipyard for many years to come, which may not have been the ideal situation for a company that could still mop up much of the requirement for auxiliary naval vessels, and in the immediate future the coastguard fleet and O&G exploration vessels. As the only Canadian shipyard with the capacity to take on these requirements it has a strong competitive advantage: if anyone wants to operate in Canadian waters for over a year the vessel has to be registered under a Canadian flag, meaning being built in Canada – or pay an import tax of 25 percent!”

Alex Vicefield is clearly enthusiastic about

the future for Davie. Under the Plan Nord Quebec is investing $80 billion in developing mining, fishing and energy industry in the north of the Province. “We are working with the government of Quebec to meet some of the needs of that infrastructure development,” he says. “And the quality of the workmanship here is nothing short of unique. We have never been to a shipyard where we have seen such high quality workmanship in welding and the other key shipbuilding skills. This is the best deal we have ever done, and I’d say our problems now are all high quality ones!”

For more information about Chantier Davie visit: www.davie.ca

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KAA

AIRPORT ON THE MOVE Kenya Airports Authority (KAA) has to run to keep up with the economic growth in the country and the growing importance of its flagship Jomo Kenyatta International Airport (JKI) as a hub for the East Africa region

written by: john o’hanlon research by: robert hodgson

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KAA

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s with any country’s main airport JKI is the gateway to the country, and the people who fly in and out from all over the world, fairly or not, will judge Kenya by their first impression, gained as they struggle through the baggage reclaim and immigration checks. The first Kenyans they meet will be the airport staff.

What greater PR opportunity could there be for a country and its people?

The responsibility for investing in the airports lies with KAA, the autonomous government body founded in 1991 to succeed the Aerodromes Department, then part of the Ministry of Transport and Communications. But responsibility for the day-to-day implementation of policy on the ground devolves upon the airport managers, especially the General Manager of JKI. Edward Kobuthi was appointed to this post in December 2011, having previously been General Manager at Kenya Airways, one of the most successful airlines in Africa. Moving across from the role of the airport’s principal client to that of service provider gave him a unique insight into the business, he says. “I could hardly fail to understand the questions I had been asking as a customer!” But in addition to that he had an unusual background for an administrator, having been trained in process engineering. His experience in manufacturing with its emphasis on continuous improvement, efficiency and lean working was just what the airport needed, though it did present him with some initial challenges. Notable among these was trying to instil a mindset of effective working among staff used to the laid back

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RwandAir, the national airline of the Republic of Rwanda, the airline has earned the proud moniker of “the Fastest Growing Airline in Africa�.

Today the airline operates a fleet composed of four Boeing 737 NG series, two CRJ-900 NextGen and one Dash-8 and serves all major cities in the EAC (East African Community), three cities in western Africa, Lagos, Libreville and Brazzaville, Johannesburg in South Africa, and Dubai the only destination out of the continent.

Changes are noticeable today on RwandAir side with the

unveiling of our new brand image. On April 12, 2013 the airline will take delivery of the first of two Boeing 737-700NG leased from German airline TUIFly to replace the two retiring Boeing 737-500. And in June we will launch Accra in Ghana and Douala in Cameroon, followed up in July by Juba in South-Sudan to be served with weekly flights ranging from 3 to 5. In December we will also be acquiring a Bombardier Q400 from factory to replace the current leased Dash-8 100. By the end of 2013, we expect to exceed half a million passengers as stated earlier with a fleet of seven beautifully chosen new generation aircraft.

KAA

Construction taking place

attitudes prevalent in the civil services. circular structure with the three sections While much remains to be done, things have grouped around a central space recalling improved right across the board in the 15 months a traditional boma. Having been built in since his appointment. One of the first things 1978, it is feeling its age and needs frequent he did was to call together his management repair. What it really needed was a thorough team and set targets in all departments, his aim overhaul, but a renovation programme that to meet the high expectations of the airport was supposed to start in 2007 was put on users. “This is no longer a local airport so they hold, becoming part of the project to build a expect a level of service and brand new fourth terminal.

Meanwhile maintenance an experience comparable has been a matter of patch to what they would receive and make do, Kobuthi at Heathrow or Schiphol. Of laments – understandably course delivering that in our he is impatient to see the constrained facilities is not easy to do, but that is what our expansion project completed. improvements all aim to do.�

The new Terminal 4 Projected passengers The existing terminal currently under construction through JKI in 2016 complex is an iconic will complete the circle. It is

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“I made it a priority to see that the power supply, especially to the airfield lighting, was robust” a fully self-contained facility with a 23,000 square metre footprint, handling international arrivals and departures and separating them from domestic transit. It will handle 1,500 passengers an hour, with the check-in and bus terminal on the ground floor, seven departure gates on the first floor and arrivals above that.

The three storey parking garage for 1,500 vehicles that forms part of Terminal 4 is already nearing completion. To give an idea of its scale, the entire off-street parking provision for Nairobi only amounts to 6,000 places – its presence more than makes up for the open

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air parking that had to be sacrificed to the new terminal. Although it has been claimed that Terminal 4 will up the annual passenger throughput of the airport to nine million from the original three terminal’s design capacity of 2.5 million, it is actually designed to cope with an extra 2.5 million. When it is considered that around six million passengers currently pass through the airport, and it is indeed expected that nine million will be using it by next year, the scale of JKI’s under-capacity becomes clear.

Nevertheless Edward Kobuthi has not been content to wait. As soon as he came in he set

KAA

in process a programme of across the board improvement that owed much to industrial lean practices. Despite the constrictions of the facility the results have been impressive and are reflected in the ratings achieved in JKI’s quarterly Airports Council International (ACI) audits. “Every single parameter showed improvement over the last year,” he says.

Putting in free Wi-fi access in the waiting areas gained a huge 16 percentage points improvement, while air-conditioning the departure lounge won a similar hike in ratings. Other areas scored markedly higher, including ground transportation, availability of parking, courtesy of staff and reduced waiting times at security; trolley availability and signage that makes it easier for passengers to find their way about.

No ACI category failed to show an improvement. And this comes after some much

larger issues had been tackled. Failure in the baggage conveyor system had been frequently so they were thoroughly rehabilitated. More seriously, just before Kobuthi took up the reins the entire airport had been blacked out in a power cut. “I made it a priority to see that didn’t happen again and to see the power supply, especially to the airfield lighting, was robust. We now have generators powering two separate loops to the airside circuits – if one has a problem the other cuts in.”

Terminal 4 is behind its original schedule but should be fully commissioned by the end of the year, ready for the President to open it.

Meanwhile work will commence on a brand new terminal building, quite separate from the original complex. The new ‘Greenfield’ terminal will solve JKI’s capacity issues for a long time to come, equipping it to meet a projected demand

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KAA took delivery of a dreamliner - Boeing 787 at the Jomo Kenyatta International Airport

KAA of 15 million passengers a year after 2016.

The design capacity of the new $650 million terminal is actually 20 million passengers a year.

Designed by architects Pascal & Watson and supervised by consultants Louis Berger Group, a contract has been concluded with Anhui Construction Company of China and work is due to start in May of this year. The project will involve the construction of a new terminal building with a total floor area of 178,000 square metres on four levels, 45 associated aircraft stands, linking taxiways, with access roads and new vehicle parking areas.

Strategically situated at the interface between east and west, north and south, JKI is ideally placed to become Africa’s main international hub for passenger services. It has already gained that position in terms of cargo, having overtaken both Cairo and Johannesburg in terms of tonnage. It now handles over 300 million kilogrammes of cargo a year and is growing at an annual rate of ten percent. In a separate contract, work will start this year on a second runway at the airport. It should take a little under two years to build. The new 5.5 kilometre runway will be able to take the airbus A380 and thus open up the airport to direct long haul flights to destinations such as New York, carrying up to 32 tonnes. Edward Kobuthi can’t wait: “Once all these projects are complete Nairobi will finally take its rightful place alongside the top rank passenger and freight airports in the world.”

For more information about KAA visit: www.kaa.go.ke

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Avis UAE

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ransportation

leading car rental business in the Emirates, built Avis core values and tailor made for its market

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Avis UAE

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vis UAE commenced operations in the UAE in 1975 as a car rental franchisee with the diverse Mohamed Hareb Al Otaiba Group. Today, the company has a network of 40 branches, a fleet of over 4,000 vehicles and employs more than 1,800 people has the largest number of branches, and is the only car rental brand that is under the same ownership throughout the Emirates.

Car rental in the UAE is an extremely competitive, with brands like Budget, Hertz, Europcar and a host of local contenders well represented. Avis in the Emirates has evolved to meet the demands of the vibrant oil, construction, trading and tourism driven economy. Avis UAE’s General Manager Joe Thomas explains: “As time passed, individuals & companies wanted to lease cars so we started car leasing in the early 1990s.”

Bus transportation was never part of Avis’s core business but faced with a clear demand from hotels and other businesses for niche services like guest and employee transportation and chauffeur-driven services, Avis UAE decided it should oblige.

“Customers preferred to deal with one single, reputed supplier for related services like self drive car hire or lease, bus transport and chauffeur services. That was the main reason Avis UAE got into the bus business in the late 1990s,” Joe adds.

When Emirates Airlines introduced a pickup-and-drop service for its first and business class customers, it engaged with Avis UAE to provide this service, in view of Avis UAE’s unique positioning in this segment. The

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contract was awarded to Avis UAE, and since that time it has provided this service.

“Emirates Airlines is a very demanding customer,” Joe observes, “and meeting this key customer’s exacting requirements meant that Avis UAE further improved its chauffeur services. As a result of all that fine tuning I believe we have the best service in the UAE at the moment,” he says.

Avis UAE is the only company in this industry that has ISO certifications covering quality, environmental performance, health and safety for their bus division. “We will be rolling these standards out to the rental and chauffeur drive services as well over the next couple of years – for us these certifications are not just mere box ticking – we practice these daily.”

In 2009, international financial uncertainty, combined with the poor judgements of boom mindset that prevailed earlier hurt the business for a while. “The recession was not so much to blame, as the over-expectations in the home market,” he says. The fleet had been increased in expectation of a large increase in demand that didn’t materialise. Avis UAE found itself with more cars than it needed.

The situation was tricky when Joe stepped in to make sense of the numbers and begin to correct the situation. Four years on Avis UAE

has got the better of the market, he feels, and the company is in much better shape.

In an ideal world, capital assets like a rental fleet should be kept as close as possible to full utilisation. Over capacity is equivalent to waste, especially if it has been funded by debt. “We realised we were sitting on surplus fleet so we had to dispose of it. We had to take a hit because the resale values dropped but since we needed to clear our liabilities, that

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was the only thing to do.� actually citizens, he says. Avis By downsizing in 2009 UAE employs 35 nationalities and 2010, it was possible to including Pakistanis, Indians, keep all of the businesses Arabs, Filipinos and Russians. going and the company was The rental, leasing, Vehicles in fleet back on track by 2011, leaner, c h au f feu r a nd bu s consolidated and stable. One businesses are close to being of the things Avis UAE did equal in size now, though at was to reshuffle or reduce staff and add one time leasing accounted for 40 percent new talent. Going forward, Avis UAE will of turnover. However, leases that were recruit the best people and train them to not profitable were not renewed and that Avis standards. A full time in-house trainer is business was right-sized to its present 20 now in place and a professional Avis manager percent of annual turnover, he says. will be brought in from Avis corporate HQ to Some of the more sophisticated bring the Avis culture to Avis UAE. innovations familiar in Europe have not Recruitment is a constant challenge in the yet reached the UAE. Automation does UAE, whose population of seven million is not suit the rental market here, and most mainly expatriate. Only about 1.2 million are transactions are person-to-person, including

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Avis UAE hand-over and pick up. Handheld devices may be introduced in 2014.

There are lots of reasons to hire or lease a car rather than owning one if you are an Emirates resident, so the fundamentals of this business are sound. Avis UAE’s greatest asset is the brand name, which attracts the cosmopolitan customers who are looking for the best in breed rather than someone who can simply provide four wheels.

“The UAE is a very dynamic place”, Joe enthuses. “Sheikh Mohamed bin Rashid Al Maktoum, ruler of Dubai and vice president of the UAE has said: ‘We don’t anticipate the future – we build it’. That’s a very far reaching statement,” says Joe, “but that’s what is happening here. Significant infrastructure and development projects have been announced that will fuel the economy over the next few years. The possibility of the 2020 World Expo being awarded to the UAE is high and if that happens, all the businesses in the country will benefit. Dubai International Airport is now the second busiest international airport in the world after Heathrow.

So the original expansion plan may not have been that far off the mark. “We believe that it was right to downsize when we did: now we are expanding the fleet again, but in a more controlled way. We will keep a close eye on our utilisation levels and grow systematically to meet our customers expectation.”

For more information about Avis UAE visit: www.avisuae.ae

Where other fear to tread MTN specialises in going where it is most needed – anything less like a ‘me too’ telecoms provider would be hard to imagine: it is a strategy that is paying off in terms of growth, most of it driven by innovation

written by: John O’Hanlon research by: Jeff Abbott

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t’s becoming axiomatic, if not an absolute the most valuable brand in Africa. MTN’s cliché, to talk about how Africa has shares constitute the biggest primary listing leapfrogged the ‘north’ in adopting and on Africa’s largest stock exchange, the JSE. developing mobile technology. How the In 2012, MTN was ranked first on the African continent’s need for growth has thrown continent among the BrandZ Top 100 Most up new paradigms that rely on lateral rather Valuable Global Brands, becoming the first than linear modes of thought. It is certainly and only African brand to make the list.

The national statistics are revealing, and true that the sudden appearance of Africa as a technology leader has made even the more show how MTN is at the front in capturing agile old world corporations rethink how they emerging markets. MTN is the number one do product development. telecommunication company in 15 of its As a result this is a good time to be an markets. While it has a respectable 25 million African provider of telecoms services, subscribers in South Africa, it has twice as many in Nigeria, and no whether voice or data.

Though it is based in South fewer than 40 million in Iran.

Africa, with its headquarters Well, emerging markets are in Johannesburg where it MTN’s target and its people was founded in 1994, MTN are the key to this degree of is a truly multinational integration in the market. Its employees communicate in group, selling its services five official languages and in 17 African economies MTN’s 2012 revenues represent 55 nationalities. and five countries beyond the continent – it is already In 2012, MTN invested present in Iran and Afghanistan and has R383 million on employee development recently pre-qualified to compete for a alone. In 2012 the total number of telecommunications licence in Myanmar. development interventions amounted to more With over 27,000 employees MTN is the than 61,000, with 32,000 e-learning courses fifth largest enterprise in Africa and very completed by employees. much a telecoms market leader, whether in In 2012, MTN performed well in a terms of network, technology or scale. In fact challenging environment, says MTN’s Group it is hard to avoid wowing its performance. president and CEO Sifiso Dabengwa “We grew In the year ended 31 December 2012, our customer base and traffic volumes and revenues increased nearly eleven percent to maintained market share, while accelerating R135.1 billion ($15 billion) and profits seven our capital expenditure programme to ensure percent to R58.6 billion ($6.5 billion). The the Group’s continued competitiveness and group has GSM licences in 22 countries and support revenue growth into the future.” internet service provider businesses in 13 But it’s not all about numbers. More than 24 countries. It describes itself as possessing million new subscribers joined the network,

$15

Billion

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CONCILIUM TECHNOLOGIES Concilium Technologies, a level 3 BBBEE contributor, has been serving the test, measurement and monitoring needs of telecommunications operators and their suppliers since 1999. We have built our success and reputation on trust and commitment, and have continually invested in our technical resources to ensure we can support our installations, focusing on developing local expertise.

We have a rich history of partnering with the best T&M technology companies in the world, and have been the glue that has provided continuity and stability for our customers when companies transitioned products through realignment of their own portfolios. When JDSU’s already extensive product portfolio was recently enhanced with their purchase of Agilent’s telecommunication service assurance, protocol analyzers , network diagnostics, and wireless drive test portfolios - products extensively deployed in South Africa – Concilium managed the transition with no disruption of the services to the operators.

JDSU offers instruments, systems, software, services, and integrated solutions that help communications services providers, equipment

manufacturers, and major communications users maintain their competitive advantage at each stage of the network lifecycle across the full range of applications.

JDSU’s Mobility portfolio sets a new standard for optimizing mobile network performance on multiple levels. By reducing operating costs and deployment time, JDSU offers value-based solutions that create new revenue opportunities as well as service differentiation. Agile operation is ensured by employing intelligent probes and products that can be fully integrated to fit a variety of applications from R&D through network monitoring, from the core to access devices, and in laboratory settings or live networks. Only JDSU is uniquely qualified to address your wireless challenges in such a comprehensive fashion: from silicon to apps, small cells to macro, RAN to core.

Concilium has been a supplier to MTN for many years and looks forward to building on this relationship in partnership with JDSU for many more years to come.

E. info@concilium.co.za

Want to bring LTE to market faster?

Deploying FTTA? Choose JDSU. JDSU understands your customers and can help you deploy LTE and FTTA services quickly, cost effectively, and in compliance with SLAs. Contact us today for more information, and download solution guides and more at www.jdsu.com/lte and www.jdsu.com/backhaul.

Congratulations to our valued partner MTN South Africa on a great year!

MTN

almost a third of them using MTN’s data easier engagements with MTN such that services. The role that telecommunications all our customers are MTN promoters. It plays in people’s lives has changed rapidly in is a differentiated MTN-branded customer the last decade, he emphasises. “Not so long experience that we give at every touchpoint.” ago, traditional voice services defined the Launched towards the end of 2012, the updated telecommunications industry. Now they are strategy better addresses customers’ needs, he just one of a growing range of services that claims – it covers a more comprehensive range impact many areas of our lives. The need of offerings to drive sustainable growth and for a broader digital offering has led MTN to also focuses on transforming our operating refresh its vision and mission and refine its model, to bring down costs and increase efficiencies. strategic objectives.”

So what is the secret of As telecoms services MTN’s success in these new become “commoditised” markets? Probably its focus it is imperative that MTN continues to create a customer on customer experience. experience that differentiates “Our new mission – to Increase in data make our customers’ lives a it from its competition, services subscribers whole lot brighter – means Dabengwa believes. Data

41%

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“It is a differentiated MTN-branded customer experience that we give at every touchpoint” is an increasingly important part of that experience. While revenue from voice services, over three-quarters of MTN’s total revenue, remains critical to its success today, data use will increasingly define the telecoms landscape ahead, he says. “Mobile networks will become important enablers for many aspects of life, allowing intelligent systems to

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operate independently and linking consumers, businesses, and others. Within the next decade, large swathes of people will likely depend on data connectivity to deliver this ‘New World’ lifestyle. In emerging markets, in particular, we see significant underlying demand for basic services which could be best delivered through mobile communications.”

MTN

One of the best ways to illustrate this is the way MTN has been able to broaden its Mobile Money and financial services offering.

By the end of 2012 the company had nearly ten million Mobile Money users, up by twothirds on 2011. In 2012, data services were the strongest contributor to MTN’s revenue growth. It increased data subscriber numbers by 41 percent to 58.7 million and data traffic grew by more than half, driven by extended 3G coverage, investment in new technology and people upgrading to data enabled devices.

The number of smartphones on MTN’s network jumped dramatically from 10.7 to 21 million. “To maintain this pace, we need to ensure access to sufficient reliable broadband

capacity. In the year we gained access to the submarine West Africa Cable System (WACS).

MTN is in a good position to take advantage of growth in data traffic in 2013.

It plans to invest R28 billion in enhancing its services, and aims to reach 200 million subscribers before the end of this year.

“We expect 21 million new customers to have joined the MTN family,” Dabengwa concludes. “We look forward to welcoming them to the New World.”

For more information about MTN visit: www.mtn.co.za

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The perfect package Managing director, Ketul Tanna, reveals the secret behind GPL’s success within the FMGC sector and its plans for imminent expansion across Africa

written by: Will Daynes research by: James Boyle

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General Printers Ltd (GPL)

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General Printers Ltd (GPL)

W

hen considering the extraordinary level of social and economic growth that has occurred in Africa over the last ten years it is easy to forget that for decades it suffered from being seen as little more than a poor continent that could only be sustained by the giving of aid.

Today the complexion of Africa has changed dramatically thanks to considerable local and international investment.

Founded in 1967, General Printers Ltd (GPL) has witnessed first-hand the evolution of the continent. Boasting three generations of experience and expertise as a family operated printing company in Nairobi, Kenya, GPL has grown to become the leading player in flexible packaging within the Eastern and Central African regions.

“Having established ourselves in these regions,” explains managing director, Ketul Tanna, “we are now focused on becoming much more of a complete African player, an aim we have fully embraced with our new motto of being ‘Africa’s Packaging Professionals’.

It was in the mid-1970s that GPL first began exploring the emerging area of flexible packaging, leading the company to create the world’s first flexible packaging production run on a UV offset web machine in 1978.

In 1994, the company made the decision to focus exclusively on gravure printed flexible packaging, a decision that laid the foundations for its position today as a leading provider of cutting edge flexible packaging solutions.

As it looks to cement itself across the continent GPL is focusing its attention on

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$5 million Investment being made towards the building of Africa’s first solvent-recovery plant

Five layer extrusion machine in operation

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the core markets of West Africa, Egypt, East Africa and South Africa. “When you join these four regions up they form something of a ‘Y’ axis,” Tanna continues. “Within this axis are the parts of Africa that both ourselves and our multi-national partners see as being the major areas of expansion and growth in the years ahead, and naturally we want to capitalise on that.”

When he is asked about the evolution of GPL from those early, humble days in the late 1960s to its present day position as a market leader Tanna is certain of what it is that has led the company to where it is now in 2013. “Perhaps the biggest contributing factor to our success has been our constant dedication to what we call our ‘Four Ps’: Pride, Professionalism, Performance and Passion.

These qualities are central to our corporate culture and form an ethos that runs through our company having been handed down from generation to generation.”

Based in Nairobi’s Industrial Area, GPL’s facility possesses state of the art machinery with a capacity of 10,000 tonnes per annum, which allows it to provide quality, cost-effective packaging solutions that its customers require on a mass scale.

General Printers Ltd (GPL)

Online quality checks fresh off the press

“Throughout our history,” Tanna highlights, “we have strived to invest in cutting-edge, innovative technology and have shown on numerous occasions that we are not shy when it comes to making bold investments and bringing new ideas to market. Indeed those traits have helped to shape our corporate identity, to separate GPL from its competitors and to create efficient, cost-effective solutions to cater for our clients’ needs.”

GPL’s dedication to innovation continues to this day, with the company currently investing approximately $5 million in what is the first

solvent-recovery plant of its kind in Africa, the Middle East and Asia. A core part of GPL’s desire to be 100 percent environmentally conscious, the plant allows it to recover and recycle some 98 percent of the solvents used in the printing and laminating process. In addition to immensely reducing the company’s environmental impact this investment is also set to translate into significant cost savings for the business.

As Tanna enthuses, this attitude towards the environment also extends into the company’s corporate social responsibility work. “Our family has been in Kenya now

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“our success has been our constant dedication to what we call our ‘Four Ps’: Pride, Professionalism, Performance and Passion”

Pouching machine in operation

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General Printers Ltd (GPL) for over 100 years and to celebrate such a milestone we decided to build a school where our forefathers first settled in Western Kenya. The school was built in 2008 and subsequently handed over to the local community at no cost to them whatsoever, and it remains open to this day.

We also carried out a similar school building project in India where our forefathers originated from.”

With the company very much embedded within the community in which it operates, and indeed throughout Africa, Tanna’s thoughts are understandably drawn towards what the future holds for GPL. “Consistent GDP growth continues to occur across Africa and one of the consequences of this is that consumers are becoming much more conscious of what they purchase. They are becoming more drawn to attractive, differential packaging and this is helping to spur further growth in the FMGC sector as manufacturers embrace new innovative ideas.”

The investment that GPL has made over the years in new technology and innovation has already begun to bear fruit, with the company now expanding its capacity by some 45 percent in order to meet the demands of its existing customers within the region and its existing export clients.

With its immediate focus revolving around achieving growth in the aforementioned

Fully robotic cylinder engraving plant

African ‘Y’ axis, while of course retaining the core ethos that has defined GPL since day one, Tanna is well aware of what the company’s biggest asset always has and always will be.

“Without a doubt it is our people, without whom we couldn’t have achieved all we have as a business. We dedicate a great deal of time towards training our employees and motivating them to be leaner and meaner, and more efficient. This has allowed our business to grow in the way that it has, which in turn allows them to grow as individuals by being part of a company that is entering a very exciting time in its history.”

For more information about General Printers Ltd (GPL) visit: www.gplflexibles.com

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Keeping their cool Unique Dairy Products Ltd (UDP) is an award-winning manufacturer and supplier of hard and soft ice cream, frozen novelties, frozen yogurt and related ice cream products: its newly found independence following a recent MBO will enable it better to reach its target market

written by: John O’Hanlon research by: Paul Bradley

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Unique Dairy Products Ltd

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Unique Dairy Products Ltd

I

t was in 1986 that Stephan Roux, an successfully right through to December 2012 experienced restaurant manager before when Stephan Roux and General Manager becoming a serial entrepreneur, decided to Stefan van der Berg took control of the go into the business of making ice cream. company in a R25.6 million management buyIn fact within the space of five years he out that nevertheless retained an unchanged had founded two companies - the first was operations and management team.

Cream Star based at Ga-Rankuwa to the west “Those early contracts drove us towards of Pretoria, the second Avondale with its HQ putting in place the best food industry and manufacturing facility at Silverton on the standards, something you need if you want to east side of the city. work with blue chip companies,” says van der Why two companies? Well Cream Star Berg. “In those days HACCP was a very new was a low-cost high-volume brand geared concept. Not many people were even aware towards the ‘informal’ market. At one time it of it or had fully woken up to food safety.” was selling 40 million ice cream sticks a year, Today of course these standards are a given. most of them distributed by And when Avondale started ‘hawkers’ who would stock working with McDonalds up in the morning at the in 2000, it already had a well established food safety factory, pack the product in dry ice and take it out to system, which has been the townships surrounding continuously upgraded.

Foundation year of Pretoria. That’s a very vibrant Avondale has been Unique Dairies Ltd and important retail stream supply ing McDonalds’ in South Africa. Avondale on outlets in South Africa with the other hand is a brand geared towards their ice creams (the well known McFlurry), the high end of the market, contracting with milk shakes and other milk products for ten well-known brands as well as selling its own years. McDonalds is UDP’s biggest customer, accounting to something like 40 percent luxury products.

In 2004 the two companies merged and as of its turnover. Pretoria is an excellent hub Milkworx floated on the Johannesburg’s AltX for distribution to the most populous areas stock exchange market. The two companies but since the product has to be fresh, never continued to operate independently however, reconstituted or frozen, the coastal areas and Avondale picked up some important of the Cape Province are contracted out to partnerships contracting with Unilever’s Ola a satellite facility in the Western Cape. In brand, and Milky Lane among others. In 2009 this way the end product is guaranteed to be Milkworx changed its name to Unique Dairy consistent wherever it is purchased.

Products and became a part of the South The relationship with McDonalds and other African food and agricultural products group major names has been a constant benefit to Ububele Holdings, growing the business the business, says van der Berg. The facilities

1986

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Seen

Contact us today and put your company in the spotlight!

vincent@bus-ex.com 270 | be monthly

are subject to a thorough annual audit to make sure they are keeping up the high standards expected. Separate checks are made on social accountability, environment and people management. “Global players have to protect their brand, and we understand that, but we really welcome these checks,” he says. “We use them as a catalyst to improve, to assess where we are today and where we want to be five years from now. Ten years ago we were good, and perhaps we were satisfied – today we are much better and we are not satisfied!”

The biggest change in that period was the amalgamation of the production facilities in 2009 onto a single site. It was a gradual process. First the original Cream Star facility moved to the new address in Hermanstad, then when the company was acquired by

Unique Dairy Products Ltd

Ububele, the Avondale factory moved to the same location. “It made sense because it cut down on overheads but there were other advantages too. The move was a fantastic opportunity to initiate a big drive on all our systems – the food health and safety systems and also all our business process systems.” As an example, the ammonia cooling plant was brought up to standard, along with the key refrigeration and boiler units.

Any milk processing facility needs to have impeccable temperature control, let alone an ice cream factory in the torrid climate of Gauteng. This year targeted investment on the production floor will see ageing equipment replaced and nine in-line freezers replaced with three more modern ones that will produce hard ice cream much more quickly.

Following the MBO the priority will continue to be the product, as opposed

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“We are looking to expanding our network so that it will reach smaller customers we can’t now serve” to expansion, he promises. “We want to make sure we do things faster, better, and produce a higher quality of product. We will continue to invest in our facility, not forgetting our formulations, to make sure we are supplying our market with just the product they want.”

It is necessary to understand where the product stands in the market, he

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continues. Ice cream is not a static product – technology advances, with improved stabilisers and flavourings available. The three strands to UDP’s business consist of the contract product, produced to a customer’s specification, the luxury branded products of Avondale and the high volume product. Each of these, but especially the last two, he says, demands an equal level of

Unique Dairy Products Ltd

Workers in the factory

research to keep it ahead of the competition, and meet price constraints without compromising taste or texture.

Though UDP has never wanted to get into the retail business it does have a couple of directly owned shops, one in Nelspruit and one in Silverton. These he would like to see grow to perhaps ten. Going forward, says van der Berg, the policy will be to guard UDP’s niche position in the mid market by appointing agents in areas not too far from Hermanstad such as Nelspruit, Polokwane, Bloemfontein and Rustenburg. “We are looking to expanding our network so that it will reach smaller customers we can’t now serve. We have the big trucks so we can supply the agent. We will support him, and he will do the marketing

because he knows his area better than we do.”

In each of its three channels UDP faces different competitors, and keeping ahead of them is a challenge. However as an independent company it will be easier to stay ahead, he sums up. Decision making will be faster, and group concerns with upstream agricultural supplies will no longer be around to dilute the understanding that Stephan and Stefan both bring to the business of making and selling the best dairy products in South Africa.

For more information about Unique Dairy Products Ltd visit: www.uniquedairy.co.za

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Mixing knowledge with quality Er-Bakir has come a long way in three decades

written by: Will Daynes research by: Abi Abagun

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Er-Bakir

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efore he established Er-Bakir, brought Er-Bakir to the point where today it A. Nuri Erikoglu had already has one of the largest electrolyte copper wire forged his own reputation production facilities in the world. From this through the building of hand- facility the company produces all manner crafted home purpose copper of copper wire based products, from wire products including boilers, braisers and rod to braid wire. Er-Bakir’s copper wire trays. A visionary in many ways, Erikoglu rods are produced in its continuous casting was one of very few individuals to foresee unit and conform to ASTM B 49 and DIN the future potential of copper. With this 17652 standards. The majority of the wire vision and his unique entrepreneurial spirit rod it produces is used as inlet wire in wire he would go on to create Er-Bakir with the drawing units, with the remaining product mission of producing copper wire in electric packaged in accordance to its customer’s cable, a product now used individual requirements. on a mass global scale in all Er-Bakir’s single copper areas of life. plain wires are processed, With Er-Bakir existing as annealed or hard, in specially a small workshop for only designed rod breakdown a couple of years it was in machine groups. They can 1984 that the company then be used as inlet wire Er-Bakir’s annual set out along the road in other units of the wire production capacity drawing plant, sold packaged to transformation when in steel reels or packed in Erikoglu entered into a partnership with close friend and respected cartons or steel baskets. These wires can also be used as inlet wire for tin or nickel plating. industrialist, Cafer Sadik Abalioglu.

In the almost three decades since the Other single wires produced by the company partnership was formed Er-Bakir has are tin and nickel plated copper wires. Wires undergone a period of significant expansion tin plated by electrolytic plating machines are and development. In 1985 the company packaged either in carbon baskets or reels possessed the capacity to produce some 32 before being directly sold to customers, or tonnes of wire rod per month, whereas today placed in steel baskets for use in the wire it boasts annual production of approximately drawing unit of Er-Bakir’s plant. These wires 200,000 tonnes. In 1985 Er-Bakir also are produced with dimensions ranging from commenced with the export of its products one millimetre to 2.60 millimetres and can be with its first deliveries being made to Iraq and tin plated to a wall thickness of 25 microns.

Iran. Fast-forward to 2013 and the company Similarly, wires that are nickel plated is now exporting to 30 technologically are packaged for direct sale or put to advanced countries. use in the company’s wire drawing unit.

Years of continuous investment have These wires come in dimensions ranging

200,000 tonnes

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Er-Bakir

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Duis aute irure This is a caption this is a caption dolore eu fugiat nulla Elsewhere inside its facility dolor in reprehenderit in pariatur. Excepteur sint bare, voluptate tin and velit nickel esse cillum plateddolore eu fugiat occaecat cupidatat non proident, sunt in wires nulla drawn pariatur. by theExcepteur company’s sint occaecat culpa qui officia deserunt mollit anim id drawing cupidatat non machine proident, group sunt in areculpa wound qui officia onto est 1.00laborum. millimetres by being putdolor through cold Lorem ipsum sit aamet, steel deserunt or plastic mollit reels, anim id before est laborum. being reduced Lorem working consectetur process adipisicing and then elit, annealed. sed do As eiusmod many in diameter 0.05 millimetres and as 24 wires can be at themagna same ipsum dolor to sitbetween amet, consectetur adipisicing tempor incididunt ut processed labore et dolore

FREKANS MAKINA In 1997, FREKANS has been established in Denizli aiming to be a leader in cable industry, worldwide company with professional staff expert on cable machinery manufacturing becomes stronger than ever in cable industry Frekans improves process enabling training of staff under team spirit, motivation, implements all services with the qualified staff applying requirements of Quality management system, ERP. Frekans pays great attention for R&D, has been still working on adding new patented products to existing 6 and aims to produce the first machines in our country has been achieved to be the first many times.

New design, Multi- functional Multi Strander 10 can strand Copper and aluminum and armor with steel wire produces with 500 rpm rotation

speed and 60-120 meter per minute line speed up to 1000 mm2.

Products; • Rod Breakdown Line (Progressing) • Extrusion (Insulation-Sheathing) Lines with Maillefer extruders • Stranding and Armoring Lines • Mica taping machines Chairman of Frekans, Mustafa DÜNDAR has been awarded 1st prize for R&D and Innovation Award in the ceremony of KOSGEB. Frekans continues towards the target to take a part in the BEST in machinery manufacturing field in domestic and overseas market with products exceeding expectations day by day. www.frekansmakina.com.tr

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time and then wound onto reels by static or dynamic methods. These products are sold directly in this form or can be used as inlet wire for bunching or bobbin machines.

Bare and tin plated wires manufactured by bobbin wire take-up machines on the other hand are coiled onto four bobbins simultaneously. Bobbins are then packaged in 12 carrier and 16 carrier boxes.

Bare, tin or nickel plated annealed wires processed by single and multi-wire drawing machines are used as inlet wire for bunching machines. These wires are bunched in double twist, single twist, Planet Strander and Rigid Strander machines in cross sections, with areas ranging from 0.05 square millimetres to 360 square millimetres. They also come in various geometrical shapes and in pitches in accordance with the customers’ requests and standards, then wound onto steel or plastic reels before being transported away from the facility.

Er-Bakir’s products are sold across Europe and throughout the Americas. Their products also play a vital role in the operations of a number of Eurasian companies based in countries including Kazakhstan and Israel.

As a way of both supporting its international clients and extending its own

reach the company has sales agents based in all of its core export markets that ensure that it engages its clients on a one-to-one basis and has the ability to identify new opportunities as they arise. The company supplies to a host of major industries including the automotive and electronics sectors, with its products currently being sold to several illustrious organisations including the likes of NASA and Boeing.

“continuous investment have brought Er-Bakir to the point where it today has one of the largest electrolyte copper wire production facilities in the world” 280 | be monthly

Er-Bakir

Away from its facilities, Er-Bakir has been involved, and continues to be involved, in several notable social responsibility programmes. One of its greatest accomplishments was the construction of the Er-Bak覺r Science High School in 1999.

Funded by $1.2 million of investment capital the school is today managed by the Ministry for Education and provides education to around 500 students.

More recently, in November 2009, the company brought its waste water treatment plan into operation. The plant itself has a water processing capacity of 40 cubic metres a day, with the treated water free of metal ions and thus presenting no threat to the environment whatsoever.

The plant itself also houses a separate

unit for destructing waste emulsions. Waste emulsions are processed in this unit so that oil is separated from the water. This means that harmful waste is not subsequently released into the environment.

Operations throughout Er-Bakir are all very integrated in nature, allowing the company to make considerable cost savings and also control the quality of its activities. Having helped breed such positive results for its business over the years, there is little chance that the company will feel the need to change its ways anytime soon - and rightfully so.

For more information about Er-Bakir visit: www.erbakir.com.tr

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THE POWER TO DELIVER ON TIME ANYWHERE IN THE WORLD

Dedicated to customers worldwide, H-Logistics is a cutting edge global procurement company delivering a premium service supplying the mining, engineering and construction industries

P

roviding procurement, order consolidation, government inspection and warehousing for air/ sea freights and urgent courier consignments, H-Logistics’ clients can access our trusted and growing network of quality suppliers

“ Integrity, efficiency and detail at the core of everything we do”

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and consultants worldwide.

With partners including Caterpillar, Hitachi, Komatsu and Liebherr to name a few, H-Logistics offers an inexhaustible range of premium brands, including PPE, 4x4 Vehicles, Tyres & Mining Consumables which can stand up to the rigours of these

H Logistics

demanding industries often operating in remote locations.

High volumes, low overheads and excellent trading terms with our partners keeps our pricing competitive.

When machines are down every second counts, time is money,

H-Logistics minimise interruptions to our clients critical supply chain.

Integrity and efficiency coupled with low overheads sets us apart from the crowd.

Trust H-Logistics, we have the power to deliver on time anywhere in the world.

H Logistics Limited Caldwellside Industrial Estate, 5 Young Road, Lanark, Scotland ML11 7SR T +44(0)1555 665560 www.hlogistics.co.uk

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supplying mines

Muchina Engineering started out as a supplier to two mines in Zambia mainly supplying pumps mechanical seals and gaskets

O

ver the years we have learnt how the mines work and understand all their special needs.

This has allowed us to branch out in to various projects. And we now supply 8 mines across Africa including Perseus mining in Ghana We are the official agents for Birmingham Pumps Supplies Limited UK, Beresford Pumps and Associated Pump Engineers UK.

“ In every aspect of our business, we are now able to respond even faster than ever before to changing client needs” 284 | be directory

Muchina Engineering (Pump manufactures and suppliers of Mechanical seals gaskets and gland packing) our ranges are as follows.

• End Suctions • Horizontal Split Case Pumps • Vertical Turbine Pumps • Self-Priming Pumps • Vertical Multistage Pumps • Horizontal Multistage Pumps We have developed unique skills which are manifested in the design and manufacture of pumps specifically engineered to suit all conditions. We have the internationally recognised ISO 9000 accreditation which includes a complete calibration and various test facilities to cover all aspects of our manufacturing processes.

In every aspect of our business, we are now able to respond even faster than ever before to changing client needs. This is true not only

Muchina Engineering

for our consulting expertise, orders processing and delivery levels, but also for after sales service including maintenance, repairs and spare parts supply. In addition, we have carved a niche for ourselves with customer orientated documentation and professional software.

By offering service levels that are unprecedented in the marketplace, we have made a total commitment to remaining a top company in all areas of our operation.

Muchina Engineering has the design technology, which was made available to us from certain

overseas suppliers. Engineering skills and capability, which has been developed over the years in design and manufacture of various pumps which, suit the local conditions.

Muchina Engineering CC 50 Tweed Crecent PRETORIA SOUTH AFRICA E sales@muchina.co.za PO BOX 10519, CENTURION, 0046 T +27 12 345 3335 www.muchinaengineering.co.za

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Included The BE Mining Directory showcases leading mining organisations from across the world, ranging from big corporations to junior mines and their supply chains.

Be seen throughout our portfolio of magazines: •BE Mining Directory •BE Mining •BE Weekly •BE Monthly •

To find out how to get involved contact: vincent@bus-ex.com