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ISSUE No. 65 | www.bus-ex.com

Cerrej贸n:

The maximum

possible

The world has little to teach Cerrej贸n about CSR and environmental management

airties:

Goldcorp Cerro Negro:

coteel:

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

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

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

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issue No.65

6

6 operations

What’s the First Thing that Comes to Your Mind?

Making the commitment to services a meaningful part of the company’s culture through measurement, review, and rewards.

12 top ten

2013’s best performing IPOs We look at some of the less visible yet best performing IPOs so far in 2013.

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12

20 Cerrejón

The maximum possible

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

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contents

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34 Goldcorp: Cerro Negro Cerro Negro ready to yield

Goldcorp is the fastest-growing, lowest-cost senior gold producer, with operations and development projects in politically stable jurisdictions throughout the Americas: its Cerro Negro gold and silver mine in Argentina is on the cusp of producing its first gold.

50 Minera Panama

Preview

Central America’s biggest copper project

Minera Panama’s Cobre Panama project is going to change the face of the country and contribute as much to its economy as the Panama Canal itself: in this overview we review the current situation.

56 New Millennium Iron Corp. (NML ) Producing the goods

In controlling the emerging Millennium Iron Range (MIR), New Millennium Iron Corp. (NML) is fast on its way to becoming a significant, low cost iron ore producer in North America.

56 76

66 COTEEL

Hard work, faith and favour

Trinidad has a well developed oil and gas industry, a fact that has enabled the emergence of COTEEL, a small, agile service company that is determined to stay ahead of its larger competitors

76 AirTies Turkey

Connecting the dots

AirTies Turkey CEO, Philippe Alcaras discusses how the company’s success in Turkey can act as a springboard to international expansion.

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What first thi Come Your M

Making the commi meaningful part of th through measurement Words by

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George

Operations

t’s the ing that es to Mind?

itment to services a he company’s culture t, review, and rewards

e F. Brown, Jr.

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O

n various occasions, virtually all of us have thought about the associations that are linked to our companies and our brands. We’ve observed situations in which positive associations have helped companies grow and prosper, creating equity in the process. We’ve also observed situations in which negative associations proved to be too great a hurdle for some companies to overcome. And we’ve all spent time thinking about the associations to which we aspire. That is something that we do as individuals as well as business leaders.

Recently, at a conference sponsored by the Institute for the Study of Business Markets, the program included a panel of three manufacturing company CEOs who shared their perspectives as to the most significant challenges facing firms like theirs in the coming years. One of the questions posed to the panel focused on their goals as to how customers thought about their companies. The answers were quite interesting. One of the CEOs said that he wanted his customers to see his firm as “helpful” and a source of “positive surprises”. A second hoped that customers saw his firm as the “#1 call when there was a problem”. And the third hoped his customers saw a “relentless aim to please”.

What makes those answers, all of which focused on the service relationship that

“The goal as a company is to have customer service that is not just the best but legendary” 8 |

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the firm has with its customers, even more remarkable is that all three of the firms have strong records of innovation, emphasize investments in new product development, and offer products that are used in highly demanding settings. Roberto Clemente, the great right fielder for the Pittsburgh Pirates, once said “I want to be remembered as a ballplayer who gave all I had to give.”

These CEOs said they want their firms to be remembered for their commitment to and excellence in customer service – they wanted their firms to give all they had to give in terms of service.

In many ways, it’s not surprising to hear executives tout the importance of services. Sam Walton said that “The goal as a company is to have customer service that is not just the best but legendary.”

Jeff Bezos similarly said that “It’s our job every day to make every important aspect of the customer experience a little bit better.” But for manufacturing companies like those represented on the panel mentioned above, building strong service competencies is a major challenge, one that requires active leadership involvement. Services are different from manufacturing, along multiple dimensions, and delivering legendary services is a rarely-reached accomplishment, regardless of the industry in which you operate.

Certainly compared to the everyday service demands on companies like WalMart and Amazon, many of the service demands on manufacturing companies are unpredictable and often unprecedented, with requests arising at unexpected times and usually involving a high degree of urgency. To respond to such requests

Operations

often requires the manufacturing firm to draw upon company resources that probably have a “full-time day job” that isn’t centered on customer support.

Many service requests are ill-structured, with customers often unable to define their needs clearly, sometimes only able to communicate that they have a problem requiring attention. Responses to such requests frequently require 24x7 resources and processes. And the problems that spark such requests are frequently unbounded, with many service requests having little (and sometimes nothing) to do with the products made by the company.

Meeting these service-related challenges requires active leadership involvement, particularly in the manufacturing environment where the focus on services is a relatively new phenomenon. It was not too long ago when as many manufacturing executives viewed services as “the hole in the income statement out of which profits drain” as there were executives who saw services as a key basis of differentiation and competitive advantage.

The perspective on services has changed, but there is still a long way to go in terms of realizing the potential that exists for value creation and capture. There are several key steps that executives can take to help their firm ensure that services are among the positive associations in the minds of their customers.

The first challenge that a firm’s leaders must address often involves selling the importance of services throughout the organization. My research into the challenges of changing a firm’s business model, as reported in an article in

“Meeting these service-related challenges requires active leadership involvement” the September 2011 issue of Business Excellence, concluded that the two most frequent causes of failed attempts to introduce a new business model are “Internal resistance to the new business model” and “Implementation process was poorly managed”. Both of these situations can derail efforts to incorporate services into a firm’s offering.

Making services an important part of your firm’s offer typically implies a major change to most manufacturers’ business model, with its typical emphasis on the processes that are associated with the firm’s products. The concept that customers must think of services as a top-of-mind association with the firm has to be sold, over and over again, and the selling has to be lead from the top of the organization. Not everyone in the organization will see services as a good idea, and others will implicitly offer resistance through some combination of ignorance, errors, lack of skills, and conflicts between service delivery and their other goals and priorities.

Avoiding failures associated with a poorly managed implementation process starts with a commitment to avoid the “ridiculous resourcing decisions” that have been reported in far too many organizations. More than in any other business function, I’ve seen underresourcing of service delivery by such a

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substantial margin that failure should have been easily predicted.

If service delivery is to become one of the positive associations linked to your firm, you must give the service delivery team a chance to succeed by providing the right level of resources and the right competencies. This is especially true when existing business units that are being asked to add services to their roster of responsibilities. Most likely, those units are already stretched by their current responsibilities, and equally likely, the people in them don’t come from a background of service delivery. The challenge is not only ensuring that there are enough resources, but also that the right resources are in place.

Most manufacturing companies have strong quality programs, and know that “if it isn’t measured, it doesn’t matter”. Yet far too often, these same firms fail to establish clear performance metrics for services.

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“The challenge is not only ensuring that there are enough resources, but also that the right resources are in place” Successful service delivery requires the same thoughtful decisions as to standards as are given other business functions.

Achieving success requires setting goals, measuring results carefully and frequently, and giving leadership attention to the attainment of those goals. Meeting the service goals must be seen as being of consequence throughout the organization.

That not only means reviewing results against goals and taking actions to correct shortfalls, but it also requires that achieving goals makes a difference to the firm’s employees in terms of incentives, promotions, and business reviews.

I recently worked with a manufacturing client that was part of a relatively compact industry, including a few major players along with a few niche specialists. Most customers were extremely loyal to one of the major competitors, with only about one-fourth of the customers regularly considering more than one brand when making a purchase. The rest were regular, repeat customers, buying the products of their preferred manufacturer. As part of the work with this client, interviews were conducted with a substantial number of the customers in this market, including ones that preferred a specific manufacturer and ones that were in the “willing to switch” category.

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What was remarkable about what had created loyalty in the first group and what drove choices in the second group was that the messages from the market in both cases were centered on services.

When “product” came up, the typical message was that all of the major firms in the industry were “pretty comparable” and “had good products and a good product line”. When “price” came up, the common message was that “the industry was competitive, and you could count on getting a fair, competitive price”. But when “services” were discussed, the comments of the interviewees often became passionate.

Customer after customer underscored the importance that they gave to the services that surrounded the products that they were buying. Excellence in service delivery was for many customers the basis for their loyalty to a supplier, and, in other cases, it was the factor that separated the winner from the losers in competitive situations.

Services can become an important means by which manufacturing firms create value for customers and capture it for their shareholders. As the CEO comments that I summarized at the start of this article suggested, they are frequently so important to the customer that they create long-lasting memories that shape, for better or worse, the

“Customers underscored the importance that they gave to the services of the products they were buying” customer’s impression of the company and their willingness to do business with it.

Aspiring to have “great services” become the first thing that comes to customers’ minds is a quite worthy goal.

But knowing of the importance of services is only the first step in the process.

Service success stories don’t come easily, and usually only emerge in firms where there is active leadership attention to the task of creating a strong service culture within the firm. That reason alone, in addition to the significant difference between service delivery and traditional manufacturing-related activities, calls for active leadership involvement to communicate the importance of services throughout the firm, to resource and implement programs that have a realistic chance of succeeding, and to making the commitment to services a meaningful part of the company’s culture through measurement, review, and rewards.

About the author George F. Brown, Jr. consults with industrial firms on growth strategy. He is the coauthor of CoDestiny: Overcome Your Growth Challenges by Helping Your Customers Overcome Theirs (Greenleaf Book Group Press of Austin, TX) and the cofounder of Blue Canyon Partners, Inc. George has published frequently on topics relating to strategy in business markets, including articles in Industry Week, Industrial Distribution, Chief Executive, Business Excellence, Employment Relations Today, iP Frontline, Industrial Engineer, Industry Today, and many others.

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top ten 2013’s best performing ipos Most IPOs in 2012 were hugely overshadowed by Facebook’s dramatic entry to the market. Speculators are eagerly awaiting the flotation of one of the other tech sector powerhouses.

Twitter is predicting that it will raise $1bn through its flotation.

When this happens it’s undoubtedly going to create a similar media circus, but until that happens we look at some of the less visible yet best performing IPOs so far in 2013 Edited by: Will Daynes

Top Ten

9 Tableau Software Inc (DATA) Gain: 135%

10

QIWI PLC (QIWI)

Gain: 115% Offer price: $17 | Recent close: $36 Offer Date: 2-May-2013 www.qiwi.com QIWI plc, together with its subsidiaries, operates electronic online payment systems primarily in the Russian Federation, Kazakhstan, Moldova, Belarus, Romania, the United States, and the United Arab Emirates. The company operates in three segments: Qiwi Distribution, Visa Qiwi Wallet, and Corporate and Other. It provides payment services through operating approximately 120,000 kiosks and 49,000 terminals in its payment processing platform. The company also offers Visa Qiwi Wallet, an online and mobile payment processing, and money transfer system that allows accountholders to pay for the products and services of merchants, as well as to perform peer-to-peer money transfers through a virtual wallet in the online and mobile environment. In addition, it is involved in licensing software and trademarks. The company is based in Moscow, the Russian Federation.

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Offer price: $31 Recent close: $73 Offer Date: 16-may-2013 www.tableausoftware.com Tableau Software, Inc. provides various business analytics software products in the United States, Canada, and internationally. The company offers Tableau Desktop, Tableau Server and Tableau Public, The company offers its products to organizations in various industries, as well as through technology vendors, resellers, and original equipment manufacturer and independent software vendor partners. Tableau Software, Inc. was founded in 2003 and is headquartered in Seattle, Washington.

ipos

7 Marketo Inc (MKTO) Gain: 148% Offer price: $13 Recent close: $32 Offer Date: 16-May-2013 www.marketo.com

8

Noodles & Co (NDLS)

Gain: 139% Offer price: $18 | Recent close: $43 Offer Date: 27-June-2013 www.noodles.com Noodles & Company develops and operates fast casual restaurants. The company’s restaurants provide noodle and pasta dishes, soups, salads, and sandwiches. As of May 28, 2013, it had 343 restaurants, including 291 company-owned and 52 franchised locations in 26 states and the District of Columbia. The company was founded in 1995 and is based in Broomfield, Colorado.

Marketo, Inc. provides cloudbased marketing software platform that enables organizations to engage in modern relationship marketing in the United States. Its software platform enables the execution, management, and analytical measurement of online, social, and offline marketing activities and customer interactions. The company markets and sells its products to business services, consumer, financial services, healthcare, manufacturing, media, technology, and telecommunications industries directly, as well as through a network of distribution partners.

Marketo, Inc. was founded in 2006 and is headquartered in San Mateo, California.

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Top Ten

6 Alcobra Ltd (ADHD) Gain: 156% Offer price: $8 Recent close: $20 Offer Date: 21-May-2013 www.alcobra-pharma.com Alcobra Ltd., a biopharmaceutical company, focuses on the development and commercialization of various drugs for the treatment of neurological disturbance. Its principal product includes MG01CI that has completed Phase II studies to treat attention deficit hyperactivity disorder. The company was founded in 2008 and is headquartered in Tel Aviv, Israel.

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5

Sprouts Farmers Market LLC (SFM)

Gain: 157% Offer price: $18 | Recent close: $46 Offer Date: 31-july-2013 www.sprouts.com Sprouts Farmers Market, Inc., through its subsidiaries, engages in the retailing of natural and organic food in the United States.

Its products include fresh produce, bulk foods, vitamins and supplements, grocery products, meat and seafood products, bakery products, dairy and dairy alternatives, frozen foods, fresh deli specialties, beer and wine, body care, and natural household products. As of August 22, 2013, the company had 165 stores in Arizona, California, Colorado, New Mexico, Nevada, Oklahoma, Texas, and Utah. Sprouts Farmers Market, Inc. was founded in 2002 and is based in Phoenix, Arizona.

ipos

4 ChannelAdvisor Corp (ECOM) Gain: 164% Offer price: $14 Recent close: $37 Offer Date: 22-May-2013 www.channeladvisor.com ChannelAdvisor Corporation provides software-as-aservice (SaaS) solutions worldwide. The company’s solutions allow its retailer and manufacturer customers to integrate, manage, monitor, and optimize their merchandise sales in various online channels.

The company sells its SaaS solutions to traditional retailers, online retailers, and brand manufacturers, as well as advertising agencies through its direct sales force.

ChannelAdvisor Corporation was founded in 2001 and is headquartered in Morrisville, North Carolina.

3

Epizyme Inc (EPZM)

Gain: 175% Offer price: $15 | Recent close: $41 Offer Date: 30-May-2013 www.epizyme.com Epizyme, Inc., a clinical stage biopharmaceutical company, engages in the discovery, development, planning, and commercialization of various personalized therapeutics for the treatment of patients with genetically defined cancers, mixed lineage rearranged leukemia (MLL-r); and non-Hodgkin lymphoma. The company has strategic collaboration and license agreements with Celgene Corporation and Celgene International SĂ rl, as well as Glaxo Group Limited to discover, develop, and commercialize small molecule HMT inhibitors; and Eisai Co., Ltd. (Eisai) to license its EZH2 program. It also has a companion diagnostic collaboration with Abbott Molecular Inc, Roche Molecular Systems, Inc as well as with Eisai. The company was founded in 2007 and is headquartered in Cambridge, Massachusetts.

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Top Ten

2

Textura Corp (TXTR) Gain: 196% Offer price: $15 | Recent close: $44 | Offer Date: 6-jun-2013 www.texturacorp.com

Textura Corporation provides collaboration and productivity tools for the construction industry. The company offers Textura, an online collaboration platform for the construction industry. Its platform includes Textura CPM, a construction payment management solution that electronically integrates various construction payment management process components and Textura PQM, which automates the pre-qualification process by facilitating the electronic submission, review, approval, and updating of pre-qualification documents. The company also provides GradeBeam.com that allows industry professionals to post, manage, and access critical project information at a central location. It serves a range of organizations in the construction industry, including general contractors, subcontractors, owners, owner-representatives, banks, title companies, and insurance companies. The company was founded in 2004 and is headquartered in Deerfield, Illinois.

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ipos

1 Aratana Therapeutics Inc (PETX) Gain: 200% Offer price: $6 Recent close: $18.02 Offer Date: 26-jun-2013 www.aratana.com Aratana Therapeutics, Inc., a development-stage biopharmaceutical company, focuses on the licensing, development, and commercialization of prescription medicines for pets in the United States and Europe. It develops AT-001, a prostaglandin E receptor 4 antagonist to treat the pain and inflammation associated with osteoarthritis in dogs, as well as for the management of pain in cats; AT-002, a potent and selective ghrelin agonist for the stimulation of appetite in cats and dogs; and AT-003, a bupivacaine liposome injectable suspension to manage post-operative pain in cats and dogs following surgery.

The company was founded in 2010 and is headquartered in Kansas City, Kansas.

SOURCE: Yahoo.com - all figures correct at the time of publication.

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

written by: John O’Hanlon | r

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Cerrej贸n

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

research by: Richard Halfhide

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Cerrejón

C

Once mining has ended, the area is rehabilitated

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

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

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

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

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

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

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

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

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

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

“Our responsibility to the neighbouring communities goes far beyond the role of generating employment and royalties” 24 | BE Weekly

Cerrejón

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

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

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

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

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

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

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

The Foundation for Indigenous Guajira

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

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

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

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Cerrejón

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

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

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

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

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

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

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

The new site at Chancleta forms part of the resettlement programme

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

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

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

A P&H shovel in operation

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

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

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

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

Gabriel Bustos

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

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

Cerrejรณn

s at the turtle protection program

Cerrejรณn waits years before withdrawing from the Green Bank

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

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

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

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

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

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

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

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

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

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

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

Cerrej贸n

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

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

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Goldcorp Cerro Negro

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Inside the Eureka mine

Goldcorp Cerro Negro

T

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

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

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

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

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Latin American Leader in IT Services SONDA. A history of technological solutions which make your business easier.

SONDA Argentina, SAP Gold Partner, technology partner of Goldcorp Cerro Negro.

Why SONDA? Capacity As an independent integrator with technological knowledge and experience.

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Commitment Flexible business partner and customer needs orientated.

Strength Financial capacity. Proven track record in the Latin American market.

SONDA Argentina S. A. | 5411 4331-7500 | contacto.argentina@sonda.com | www.sonda.com

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

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

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

Plant construction – Vein Zone area

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

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

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

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

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

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

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

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

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

Goldcorp Cerro Negro

Eureka Camp

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

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

1,600 tdp

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

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

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500,000 ounces

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

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

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

Goldcorp Cerro Negro

Panoramic view of plant construction in Vein Zone area

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

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

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

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

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Goldcorp Cerro Negro Modular Homes SRL

Operator at work inside the mine

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

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

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

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We bring turnkey solutions to the most extreme places, with comfort as one of our main goals. We have design a wide variety of modular systems that covers all our customers needs - dormitories, recreation buildings, kitchen and dining, offices, etc along with all their service networks and engineering works.

Modular Homes SRL is the preferred source for temporary and permanent workforce housing for most of the big mining projects in South America. www.modularhomes.com.ar

TRONADOR

At TRONADOR we possess more than 66 years of experience within the transport industry.

To assist our clients with their projects we have incorporated new tractor units during the past year, while also extending our semitrailers and other types of trailers.

We have qualified staff who contribute their knowledge, experience and their outstanding service towards our success, and have a proven track record of being able to solve any problems which may arise, synchronising times and requirements in order to create an efficient service.

It is for this reason, and more, that we are proud to be part of this team. www.tronador1.com

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Equipment operating inside the mine

Goldcorp Cerro Negro

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

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

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

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Preview:

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Minera Panama

Central America’s biggest copper project Minera Panama’s Cobre Panama project is going to change the face of the country and contribute as much to its economy as the Panama Canal itself: in this overview we review the current situation

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

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Minera Panama

Preview:

I

t was in early April this year, following a FQM was confident that it could bring in six-month campaign, that First Quantum Minera Panama’s Cobre Panama, one of the Minerals (FQM) of Vancouver acquired world’s largest undeveloped copper projects, its rival Inmet and with it more than 80 at a much lower cost than the previous percent of the assets of the Panamanian owner by employing in-house expertise company Minera Panama. The deal created rather than engineering, procurement, one of the world’s leading copper producers and construction management (EPCM) with a geographically diversified portfolio contractors. At the time it promised to reduce of high-quality operations and development the development costs of the copper mine, projects in eight countries across four located 120 kilometres west of Panama City continents. With revenues in 2013 forecast and 20 kilometres from the Caribbean Sea to be in excess of $3.5 billion and a strategic coast in the district of Donoso, by up to $1 plan to produce more than billion from the previously 1.3 million tonnes per annum estimated $6.2 billion. As of copper by 2018, FQM evidence of its expertise positioned itself as potentially in cutting project costs the largest, widely-held pureit pointed to its Sentinel play copper producer and copper mine in Zambia, one of the top five copper which cost just $2 billion producers in the world. to build. At Sentinel the Pounds of copper in According to Philip Pascall, company erected 2,800 Cobre Panama’s reserve First Quantum’s Chairman tonnes of structural steel at average costs of between 10 and CEO, the new mining company will be one of the fastest growing and 14 man-hours per tonne, compared to copper producers with a projected compound industry averages of 30 to 50 man-hours. annual growth in copper production of So now Minera Panama has entered more than 20 percent for at least the next the construction stage to develop a worlddecade. It is also positioned to benefit from class copper mine in the Province of Colon, a strengthened financing profile, greater Panama. With an expected mine life of over liquidity, the ability to generate substantial 40 years, assuming annual production of free cash flow and the flexibility to use approximately 300,000 tonnes of copper per debt and equity capital markets at a lower year, the Cobre Panama reserve is one of the long-term cost. Immediately following the largest in the world. The project’s current deal FQM announced the termination or measured and indicated resources, including suspension of a raft of existing agreements, the mineral reserves, contain 32.7 billion notably $120 million of anticipated business pounds of copper and nine million ounces with SNC-Lavalin, not taking into account its of gold. It represents the largest private investment in the history of the country and joint venture partners.

32.7

Billion

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

www.bus-ex.com/mining

Minera Panama

Preview:

“Today a workforce numbering more than 2,500 is hard at work to build the mine” will be the biggest foreign exchange earner with revenues comparable to the Panama Canal’s. Today a workforce numbering more than 2,500 is hard at work to build the mine, which will use conventional open pit methods.

A concentrator will initially process 150,000 tonnes per day of ore from the Botija deposit, while ore from the Colina and Valle Grande pits will be processed later. The plant will now be built in 2014 in an attempt to speed up progress, it was recently announced.

The project is now at a critical stage,

developing necessary infrastructure while First Quantum is keen to start construction of the concentrator plant at the site in 2014, itself a major project.

Coming soon: An in-depth analysis of Minera Panama’s megaproject.

For more information about Minera Panama visit: www.minerapanama.com

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Producing the goods In controlling the emerging Millennium Iron Range (MIR), New Millennium Iron Corp. (NML) is fast on its way to becoming a significant, low cost iron ore producer in North America

written by: Will Daynes research by: Peter Rowlston

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New Millennium Iron Corp. (NML)

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First shipment of DSO products September 14, 2013 - reclaiming ore

NML

H

aving been founded under that crosses the provinces of Newfoundland the name of New Millennium and Labrador and Québec in and around the Capital Corp, it was in June town of Schefferville, Québec. Here, NML 2011 that the company changed controls the vast Millennium Iron Range its name to emphasise its (MIR) and is presently active on three transition towards being a producer of iron projects. Said projects are the development ore. With that New Millennium Iron Corp. of DSO, a comprehensive, a comprehensive feasibility study of two taconite deposits, (NML) came into being.

With a head office located in Calgary, KéMag in the Province of Québec and Alberta, and corporate offices in Montreal LabMag in the Province of Newfoundland and St. John’s, NML has evolved over and Labrador, called the Taconite Project, the course of the last decade, growing and a drilling program aimed at identifying deposits that could rival from being a capital pool company into an emerging KéMag and LabMag. producer controlling one Due to its smaller scale of the largest iron ore and relatively low capital resources in the world. cost the DSO Project is first Central to the company’s on NML’s agenda, and is one success is its dedicated that will see the company and experienced team, transition itself into an Tonnes of iron ore held in who together harness operating company and NML’s 25 deposits that generate near-term cash flow. the skills possessed by a make up the DSO Project The DSO Project is actually wealth of mining industry a brownfield site upon which professionals with years of experience in all aspects from mine discovery the Iron Ore Company of Canada (IOCC) and construction to mine operations, carried out operations between 1954 and including transportation and product sales. 1982, when work ceased due to adverse NML’s rapid rate of growth is expected to economic conditions and a restructuring of continue to accelerate as it works to meet its own the North American steel industry. What was strategic goals. These include bringing its two left behind was an estimated 250 million core projects, the direct shipping ore (DSO) and tonnes of ore in the ground, 120 million Taconite Projects, into production, evaluating tonnes of which NML would go on to acquire and exploiting other opportunities within through its purchase of 25 deposits. its vast holdings, and ultimately becoming a The DSO Project has been designed to significant, low cost iron ore producer in North consistently produce high quality products that meet or exceed customers’ requirements.

America by the end of the decade.

NML’s opportunity for value creation stems The plant design itself has been optimised from projects in the historic iron ore region to attain high recoveries in excess of 80

120

million

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BRASS Engineering International

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BRASS is a group of service companies specializing in the design and development of long-distance pipelines for the conveyance of mineral products (ore, concentrate, tailings). BRASS’ experts are well-experienced in the pipeline transport of water and hydrocarbons (coal, oil and gas) and petrochemical (e.g., diesel) products. It has highly qualified personnel with excellent experience in all aspects of pipeline engineering.

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NML percent, while the design also contains several innovative and productive features that allow it to achieve low operating costs on a sustained basis.

Said features include the development of year round production methods instead of oversizing the plant for seasonal operation, blending of the ore to ensure consistent feed to the plant, and a longer economic life of the mine, the use of mineral sizers to treat soft or sticky ore, as well as the use of overhead storage silos and a rapid train loading system to reduce the cycle time.

When it comes to NML’s other venture,

Erection of the process plant building

BRASS ENGINEERING INTERNATIONAL BRASS Engineering International (BEI) is a company with highly qualified personnel; and extensive experience in the development of pipeline transportation systems in the mining industry, covering all engineering fields: Hydraulics, Mechanical, Piping, Electrical, Instrumentation and Civil Engineering. BEI has served many of the top mining companies, including BHP Billiton, Anglo American, Falconbridge, Xstrata Copper, Phelps Dodge, Rio Tinto and CVRD. Also, has served many of the top engineers: Bechtel, Fluor, SNC-Lavalin, Hatch, AMEC, and Aker (purchased by Jacobs) and others. Also, BEI has directly served many other mining companies as well. BEI has performed important projects via conceptual, basic, detailed engineering, procurement and construction support, pre-commissioning, commissioning and startup. It has participated in operations support for majors such as: Minera

Escondida, Minera Los Pelambres, Minera Alumbrera, Samarco , as well as many others.

BEI provides and shares technical programs with its professionals, to help develop and perfect new technologies. BEI has given numerous technical presentations to top organizations worldwide, and its professionals are internationally known in the industry as experts in slurry transportation systems. All professionals working for BEI have university degrees and its top members have post graduate degrees. BEI’s personnel have a long and extensive mining-related experience. BEI’s managers and leaders can boast of extensive engineering and field experience. BEI, through its experience and dynamic structure, aims at delivering safety, reliability, feasibility, innovation and above all client satisfaction. www.brassengineering.com

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the Taconite Project is made up of the aforementioned LabMag and KéMag properties.

The former is 80 percent owned by NML, with the other 20 percent held by Naskapi Nation of Kawawachikamach (NNK), and was the first deposit to be acquired by the company.

In 2004 NML would go on to purchase the KéMag deposit based on the initial work IOCC had performed during the 1970s. NML started drilling in 2006 and determined that KéMag was a major taconite ore body. This deposit is 100 percent owned by NML. It was then in March 2011 that the company and Tata Steel signed a binding agreement regarding the development of the asset. As

NML

Loading rail cars at silver yard

part of this agreement Tata Steel reserves the right to develop either or both of the LabMag and KéMag properties. Should it chose to develop only one of these deposits then NML will be free to develop the other, either by itself or with another partner. In advance of a decision being made both partners spent the

better part of 2012 carrying out a detailed feasibility study.

Last, but certainly not least, NML is also continuing to undertake several important exploration projects. The company controls the emerging Millennium Iron Range (MIR), a 210 kilometre long taconite belt which it,

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and many others, believes has the potential to become one of the world’s leading iron producing regions.

While IOCC undertook drilling and development work on the belt in the year between 1960 and 1980, the deposit resource potential was not fully delineated and thus

it is estimated that only around 20 percent of the range has been thoroughly explored to date. NML’s confidence in the range has only been solidified by the fact that, based on around 17,500 metres of drilling, some 5.5 billion tonnes of resource have been certified as NI 43-101 compliant. Following its

“The DSO Project is first on NML’s agenda, and is one that will see the company transition itself into an operating company”

LabMag in the province of Newfoundland

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NML

DSO project, construction of dome and process plant

encouraging results at LabMag, the company commenced with drilling at KĂŠMag in 2006.

After drilling around 10,700 metres, a further 3.5 billion tonnes of resources were certified to the same standard.

In addition to this, a further positive development has seen a recent magnetometer survey indicate a strong possibility of continuity between the two deposits. The same airborne survey also located and identified nine significant magnetic anomalies. In the time since NML has embarked upon a $5 million program to explore two of these.

Trends in the global market in recent years have seen the demand for seaborne iron

ore grow strongly, particularly against the backdrop of increased urbanisation in Asian countries. The problem until now however has been the fact that with supply remaining tight, higher spot market prices have become the norm. The management of NML believes that with the high quality of its resources, its location and proven project development abilities, it can take advantage of this market opportunity by advancing its projects.

For more information about New Millennium Iron Corp. (NML) visit: www.nmliron.com

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COTEEL

Hard work, faith,

and favour Trinidad has a well developed oil and gas industry, a fact that has enabled the emergence of COTEEL, a small, agile service company that is determined to stay ahead of its larger competitors

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

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Supply, installation and commissioning of D3306 crane engine on an offshore platform

COTEEL

T

he story of COTEEL is a classic the O&G industry,” says Selvan regretfully. tale of entrepreneurship. “They suffer from big company syndrome. As Entrepreneurs are defined as the older people retire and younger people people who see an opportunity have come in they have lost touch with their and seize it: but to be realistic customers. That is the main reason why we they also need the skills and technical know- have been able to penetrate that market.” how to deliver to the customer base they have The requirements of the O&G market itself identified. It was in 2011 that it dawned on have not changed that much, he adds. It is husband and wife team Selvan and Tricia more a question of the service sector not Ramnarace Moonan, each of them a high keeping up, but the problem is a serious one flier in their different fields, that they could that manifests itself right across the sector, do a better job for the Caribbean oil and gas clients and service providers alike. COTEEL sector than the incumbent service providers. was set up to remedy this deficiency. And Less than three years later they are showing the timing was serendipitous: a time when the brakes were on the whole they were right. industry thanks to the global Selvan is a career engineer with 30 years’ engineering recession was an opportunity knowledge and experience in to get the documentation, reliability techniques behind the service proposal and the him: Tricia is a qualified technology right, then seek to Of local platform accountant and an expert in capture some key clients. operators are business intelligence systems.

As a new entrant, it was COTEEL clients “We were at a stage where we vital to get things right were essentially providing from the get-go, says Tricia consultancy services to the large organisations Moonan. Ok, the company was a start up, but we worked for.” Like true entrepreneurs they 400 percent turnover growth in the second sat down one day and wondered why they trading year and another 400 percent in the were working for someone else when they third year to date is a powerful indicator that could be doing it for themselves, bringing their COTEEL was on the right track. “Our current combined expertise to the local Trinidad & customer base is three times bigger than Tobago market, the Caribbean Region, and in when we started,” she adds. “All the customer feedback so far is that the service level from time perhaps to an international client base.

Above all they had direct knowledge of COTEEL is a breath of fresh air compared the local hydrocarbon sector, and were only with past experiences. The overriding too aware that the big players were getting comment of all new prospective clients is a less than ideal service from their existing that they are not pleased with their current supply, support, service and maintenance service providers in this sector and they are partners. “They no longer really understand looking for alternatives.” The company is

50%

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growing a portfolio of strategic partnerships in the sector and among others holds the rights to distribute Adicomp Compressors, FCI watermakers (desalination being seen as tomorrow’s solution for offshore installations), Randolph and De’Ran gears and is a reseller of Weir Minerals’ pumps and valves.

Its strategy was to get an initial contract, not worrying too much about margins, in order to prove its mettle. One such opportunity was to overhaul nine engines: in the year that COTEEL was able to deliver this job to the complete satisfaction of the client, its regular partner was only able to partially overhaul one comparable engine. “That is what we do well,” says Selvan. “We do the complete package, not just the engine.”

By the whole package he means the engine itself, its cooling system, generator, instrumentation and controls. These may be supplied by different dealers. COTEEL can be described as a ‘one stop shop’ that is equipped to handle a complete package, onshore or offshore. This approach gives COTEEL a competitive edge in the industry – and it does the job quickly including recommissioning and testing so that downtime is cut drastically.

“Getting the first job is tough: getting subsequent jobs is a lot easier. Once we have our foot in the door, we have a client!”

One of the more interesting projects he recalls was to dismantle and relocate a fire water pump from one deck level of a platform to another. “We handled the entire

Refurbished CAT 3508 diesel engine transported back to offshore platform for re-commissioning

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COTEEL

“We are able to make quicker decisions and mobilise a team more rapidly than larger and more complex organisations” project including dismantling the existing pump structure, modifying the design and reinstalling and recommissioning the pump.

Another project of ours that sparked the interest of a new client involved installing and commissioning a new engine for a crane located on an unmanned platform. The engine required minor modifications and an ingenious approach to installing it due

to location restrictions.” All of this COTEEL was able to do, to the customers’ complete satisfaction, in just three short days.

COTEEL is a small company that acts like a large one, with robust Standardised Operating Procedures (SOPs) and Business Continuity Planning in place: time after time every work activity in COTEEL is done consistently and all data and documents are backed up at a secondary fireproof location. All data entry is standardised and centralised. When a report is generated, all data elements have a uniform look with no duplicate or obsolete information in the system. This produces more effective reporting and more efficient decision making.

This level of operation has gone down well with customers. Within the two and a half years in which COTEEL has been in operation it has built up excellent relationships within the energy sector - and specifically within the energy sector that operate offshore platforms.

It has established business relationships with almost half of the platform operating companies in Trinidad and Tobago, supplied mechanical services to 12.5 percent of them and supplied watermakers and parts to 25 percent of companies in this sector.

By identifying the long waiting times, indifferent service and costly downtime that was the bugbear of the local industry, COTEEL

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was shown an open door: it could contribute to de-risking the customers’ operations – as long as it could get the first job right the first time. “Because we are small we are able to make quicker decisions and mobilise a team more rapidly than larger and more complex organisations,” says Tricia.

Being able to quote, get a team together, and execute quickly helped clients make a quick decision. Their understanding of the post service-reporting regime in the industry was another advantage. As part of the company set-up process Selvan and Tricia standardised the reporting procedure and simplified the forms so they are more understandable for COTEEL’s and its client’s employees alike, while still satisfying regulatory requirements.

Long delays in providing post service reports, and in some cases altogether failing to provide them, was another common experience among clients’ existing service providers. The same thing happened at the other end of the process. It could take months to get a quote – another place where COTEEL could change the game by turning round quotation requests within days, and providing a full and professional report immediately the job has been completed.

STOW-TT certification is a prerequisite to working in the Trinidad O&G sector.

Overhauling and reinstalling a fire wat

Short for Safe To Work, STOW was initiated in 2004 by the Trinidad & Tobago Energy Chamber after hearing the complaints from its members in the energy service sector, who were experiencing challenges in meeting the range of health, safety and environmental (HSE) requirements among the major O&G operating companies.

This made it difficult for companies to prequalify for work and fully explore

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COTEEL

ter pump on an offshore platform

Installation of new crankshaft in CAT 3508 diesel engine

business opportunities in Trinidad and Tobago’s leading industry.

This is a costly process as well as one that requires in-house expertise at a deep level and COTEEL has grasped it head-on; something that will differentiate it from other small companies that might compete. “We want to perform at the highest level,” says Selvan.

“Being small we have to make sure we have everything in place - our larger competitors still have a lot of clout and would cut us out unless we have all the boxes ticked!”

Environmental performance is increasingly important to clients. COTEEL has elected to pursue a procurement policy that favours chemical and other products that have a low impact on the environment, even if higher priced. Employees are encouraged to deposit

domestic recyclables in the office bins. “Change begins with individuals and this culture starts at home,” is the Moonans’ mantra.

While he could recruit experienced personnel, Selvan is keen not to import the laissez faire culture and poor working practices too often found in the incumbent providers.

“Our strategy is to hire qualified people and train them the way we want them to be trained.

It used to be the case that only one percent of the population had a university degree: nowadays there are many more opportunities for tertiary education. That means we have more choices in getting better qualified people who are willing to tackle the training that they need to function in this industry.”

Selvan Moonan believes that recognising good performance is one of the best ways to

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“We have implemented a process that aims specifically to reward employees for achieving or surpassing identified objectives�

Supply, installation & commissioning of FCI watermakers on NGC platforms

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COTEEL motivate employees. “We have implemented a process that aims specifically to reward employees for achieving or surpassing identified objectives both in Operations and Health and Safety – and also in achieving an extremely high level of customer satisfaction.”

This concern for people extends to the wider community. In support of promoting healthy sporting activities as an option for young adults in its local environment, COTEEL co-sponsored a local cricket team, Hillpiece Cricket Club.

The team, like COTEEL itself, turned out to have a winning strategy as it won the final match at the City Sports 30-Overs Sunday League, at Guaracara Park, Pointe-à-Pierre in June 2013. It also won the Independence Sports Club 20-20 Men’s Windball Cricket, at Scott Road Penal, in August 2013.

While the O&G sector is always going to be the central focus for COTEEL it has not shrunk from seizing other opportunities that present themselves. In a significant diversification of its portfolio the company obtained the exclusive distributorship in the Caribbean for a product line which Tricia and Selvan Moonan expect to be strategically important in the growth of the company. This is a wellknown brand of garden machinery, for which there is a lively and growing market among the many garden hobbyists in the Caribbean.

COTEEL will not only operate within its core energy market but offer premium products within the agricultural industry as well.

At this moment then, COTEEL is consolidating its position in the vibrant Trinidad & Tobago hydrocarbon market, led by local companies such as Petrotrin and its partners among the global majors, while

keeping a close eye on all opportunities that are a good ‘fit’ with its competencies and regional market knowledge. Looking further ahead Selvan hopes to expand into other regional English-speaking markets where the local O&G market is expanding – Suriname might be a case in point. There is a need for more reliable proactive maintenance solutions such as oil sampling and vibration testing – activities well within COTEEL’s expertise. “Optimising the maintenance cycle also increases the client’s environmental performance and the efficiency of the machines. It is a benefit to the customer if he can spend less and have the machine running longer,” he says.

COTEEL is already becoming a wellknown name in Trinidad & Tobago, where it is growing as much by attraction as by promotion. Its achievements over the short period since it was founded are solid, well resourced and repeatable. If its founders’ energy and entrepreneurship are anything to go by, this is a company that will be significantly penetrating the market in the sectors in which it operates. As Selvan Moonan says: “Hard work, faith and favour with God have brought the company this far - further than other companies less than three years old have gone! We intend to never let go of that winning combination, to the benefit of our customers, employees and to ourselves.”

For more information about COTEEL visit: www.coteel.com

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AirTies Turkey

Connecting

the dots

AirTies Turkey CEO, Philippe Alcaras discusses how the company’s success in Turkey can act as a springboard to international expansion

written by: Will Daynes research by: David Brogan

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AirTies Turkey

A

t the time when Alexander Graham Bell and Charles Sumner Tainter carried out the first wireless telephone conversation in 1880, even their great minds probably couldn’t have envisioned how significant a part this technology would go on to play more than 120 years later. Today, barely a week goes by before a new wireless device is brought to market and the spread of the technology in developing countries has come to be one of the tell-tale signs of economic strength.

Defined by the IMF as an emerging market economy, Turkey is one such country to have experienced a rapid growth when it comes to technological advances in recent times. “It was roughly around ten years ago that mass use of the internet started to really boom in Turkey,” explains AirTies Turkey CEO, Philippe Alcaras.

It was around this time, 2004 to be precise, that AirTies was established. Led by a senior management and technical team from Silicon Valley, the company’s strategic intent was, and still is, to be the market leader for the wirelessly connected home through the design and development of its own software and hardware.

“Our introduction to the Turkish market,” Alcaras continues, “saw us bring a number of innovations to the country. Perhaps the most significant of these was the opening of our own 24/7 call centre to help customers to properly install their internet service.

This is one way that we demonstrate how our origins have always been closely linked to our customers, their individual user

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2004 The year that AirTies was established

Philippe Alcaras

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experiences and the bringing to market of the best products and services.”

The opening of its own call centre in Turkey was in many ways a visionary move by AirTies Turkey, bucking the trend created by other device manufacturers that tend to outsource such services, often at the expense of forging close relationships with their customers and gaining a better understanding of their concerns and issues.

“Our decision to forge this link really helped in creating a greater level of recognition for our brand and is one of the reasons why there are now more than three million Turkish homes using our products,” Alcaras enthuses.

In addition to these domestic customers the company has also built up an impressive portfolio of business clients.

One of the unique characteristics that make AirTies stand apart from the competition is that it retains full control of its products and solutions from inception to launch. By developing its hardware and software through internal research and development and customer feedback the company is able to quickly respond to market demands.

“Today, the fundamental driver of our growth is the fact that our system is designed to guarantee 100 percent wireless coverage

AirTies Turkey

Air 7210 High Definition Hybrid IPTV/OTT/DVB-T/C Set-Top Box with dual tuners

throughout a user’s home or business; however what is now central to our business was much more of an accessory as recently as five years ago,” Alcaras states.

This all changed with the arrival of the iPad. From that point on it became clear that the days were numbered when home networking could simply be resolved using power lines and electricity to bring the

internet into every room. As Alcaras rightly points out, in the average US home today there can be as many as twelve wireless connected devises under one roof and this trend is going global at a rapid pace.

Therefore the need to be able to provide for an environment where all these devices can connect seamlessly to a strong internet connection has never been greater.

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“The ability to deliver a fantastic user experience time and again really typifies AirTies and gives us the edge that we have over our competitors�

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AirTies Turkey “Our solutions, products and technology allow us to create a network within a home or business that provides the best possible pathway for any content that one wishes to access wirelessly through a particular device,” Alcaras says. “That ability to deliver a fantastic user experience time and again really typifies AirTies and gives us the edge that we have over our competitors.”

Equally significant is its seemingly never-ending search for new technological advances that will enhance user experience, something that it does not just by itself but also in partnership with other industry players who the company feels share a similar vision and values.

“A lack of collaboration between companies is something that we see as a real issue within our industry with the concept of joint research and development being something that is very much in its infancy,” Alcaras highlights. “What we want to do is take this concept and move it forward. The reality of the world today is that consumer habits change and grow at a much faster pace than the industry itself, therefore the norm of taking some 18 months to deploy a new solution is too long. It is my belief that the best way to bring this time down is through honest,

Air 4400 300 Mbps Wireless Range Extender

open collaboration between companies that will ultimately reap benefits for all parties.”

When looking at what the future holds for AirTies Turkey, one of the initiatives currently in the early stages of planning involves the company rolling out its technology to Turkey’s steadily expanding hospitality sector. “Our research into this particular market has shown us that in order to ensure complete coverage throughout a hotel one requires a greater use of smart technology as opposed to networking technology,” Alcaras says. “Where we also see the hospitality market benefiting from our solutions is in the ability to self-install quickly and simply. As you can imagine, for a hotel to call in an engineer each time they need to install connectivity to a room you are

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AirTies Turkey looking at a time consuming, costly exercise.

The self-installing nature of our technology helps to lower the cost of installation while continuing to ensure maximum wireless coverage everywhere. This reason alone gives us great confidence that our products can sit well within the hospitality sector.”

While Turkey continues to be a hugely important market for AirTies, a breakdown of its annual revenues reveals that its dependence on the country has decreased slightly over the last three to five years. As Alcaras himself acknowledges, this highlights the fact that the opportunity for the company to expand internationally is at hand.

“In addition to expanding our existing presence in Europe,” Alcaras concludes, “we are also looking more and more at potential business opportunities in North America and Asia. While this makes for an exciting time for us we do realise that, good as we are, we are not yet in a position where we can provide our technology on a global scale in the short term. In order to combat this we are increasingly looking to partner with a number of premium operators so that we can better provide hardware, finished goods and licensing throughout the world. Although it is difficult to forecast precisely what the future may hold we are certainly preparing ourselves for the possibility of multiplying our current revenue by three or four in the next five years.”

For more information about AirTies Turkey visit: www.airties.com

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