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ACHIEVING BUSINESS EXCELLENCE ONLINE

Toro energy: ide technologies: air Mauritius: ASIA&PACIFIC EDITION Issue No.3

ntt communications:

Delivering

seamless service The growing importance of Thailand to the South East Asian region

regional focus: mongolian mining


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 •

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business excellence

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

Business Excellence brings you content from leading business influencers and strategic thinkers providing inspiration and guidance to help you and your business grow. We showcase some of the best examples of successful organisations from around the world giving you a unique insight into how they operate.

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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be asia & pacific | 5


Be asia & pacific Regional Focus: mongolian mining

10 10 Mongolian mining

A Mongolian milestone

Mongolia is fast becoming an area of great interest for the mining community.

20 ACCL International Roads less travelled

30

The risk and not merely financial reward of Mongolia.

30 Tridum e-Security LLC Safe and secure

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

32 MAXAM Explosives

Blasting through barriers

32 6 | be asia & pacific

The role MAXAM Explosives is playing in the development of the Mongolian mining market.


contents

40

telecoms: 40 NTT Communications

Delivering seamless service

The growing importance of Thailand to the South East Asian region and how the internet and other telecoms services are becoming ever more critical to people’s lives.

52

52 Australian Satellite Communications (ASC) Keeping things connected

The qualities that have brought ASC such success over the years and how its acquisition by SpeedCast will take the business to the next level.

Transport: 60 Air Mauritius

Flying into recovery

Air Mauritius is strategically placed, with a network reaching Europe, Africa, Asia and Australia.

60

be asia & pacific | 7


Mobile You can now read our latest magazines on your mobile devices

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Be asia & pacific

72

contents

mining & Minerals: 72 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.

88

80 continental coal African energy for Asia

Continental Coal is a company whose second name could be ‘expansion’: with three operating mines and another in development this year, growth is a key part of its policy.

88 Toro Energy

Fuel for the future

98

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

98 Venturex Resources CRITICAL MASS IN THE PILBARA

Venturex Resources has a strategy to combine a number of copper-zinc deposits that will put the region on the map for more than just its iron ore.

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regional focus:

A Mongolian milestone Mongolia is fast becoming an area of great interest for the mining community, a fact symbolised by the Oyu Tolgoi project, one of the largest copper and gold mines in the world

written by: Will Daynes

10 | Be asia & pacific


Mongolian mining

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Regional focus:


Mongolian mining

O

Tavan Tolgoi coal site

n 10 February, 1922, the People ’s G over n ment of Mongolia signed a landmark resolution that brought a significant coal deposit in Nalaikh city under state control. By the end of the year exploration on the deposit was complete, thus ushering in what is recognised as the birth of the mining sector in the country. In the 91 years that have followed the mining industry has undergone a number of transformations as its role in Mongolia’s economy has steadily grown into one of its leading sectors of growth. As of 2011 mining in the country was responsible for producing 20.2 percent of its Gross Domestic Product (GDP), 69.6 percent of its total industrial output and 89.2 percent of its export product. Coal, copper and gold form the principle reserves that are mined in abundance across Mongolia, with it hosting approximately ten percent of the world’s known coal reserves at an estimated 162 billion tonnes. In 2010 the 17 coal mines in operation across the country contributed towards it exporting 72 percent of the 25 million tonnes produced worldwide, making it Mongolia’s largest export. Perhaps unsurprisingly the largest customer for coal is China, accounting as it does for over 80 percent of all exported coal product. The largest coal site in Mongolia is the Tavan Tolgoi, owned by the government owned company Erdenes MGL and the Mongolian Mining Corporation. Located in the Ömnögovi Province it is one of

Be asia & pacific | 13


Tridum e-Security LLC is a company that offers information and communication systems security and professional network infrastructure services. It also specializes in providing solutions for the planning, implementation and maintenance of banking software and hardware. It can provide customers with custom solutions and professional services with network architect, architecture design, security and encryption product development and evaluation, information security, unified communications, liaison center, data center, application delivery and service management.

Tridum E-Security LLC | Grand Plaza Complex, Room#701, Peace Avenue-46, BGD district | Ulaanbaatar-210535, Mongolia Mobile:976-99907206 | Tel:976-70120072 | Fax: 976-70110072 | www.tridum.mn


Mongolian mining

regional focus:

Coal truck leaving Tavan Tolgoi on route to China

the world’s biggest untapped coking which it hopes will be beneficial to its own and thermal coal deposits boasting an economic advancement. estimated resource of 6.4 million tonnes. While coal now holds the title of being While China is far and away the largest Mongolia’s largest source of income it was client of this deposit, Russia is also likely to as recently as 2010 that copper held this become a serious bidder for this coal once a position. Indeed Mongolia remains the 1,000 kilometre rail link twelfth ranked country on between the two countries the plant when it comes to has been completed. copper reserves. Today two companies in Meanwhile, on a local Mongolia produce copper scale, Mongolia has also concentrate, the Mongolianbrought online several Mongolians employed Russian joint venture coal based power projects through the project Erdenet Mining Corporation and coal-washing plants

10,888

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regional focus:

Seen

Contact us today and put your company in the spotlight!

vincent@bus-ex.com 16 | Be asia & pacific

and the Oyu Tolgoi mine, a joint venture between Rio Tinto Group, Turquoise Hill Resources and the Mongolia government. With the cost of bringing it into production estimated at close to $10 billion, the Oyu Tolgoi mining project represents the largest financial undertaking in Mongolia’s history. Discovered in 2011 the mine is situation in the South Gobi Desert, some 80 kilometres north of the country’s border with China, and is believed to contain some 36 million tonnes of copper and 45 million ounces of gold. Using both underground and open pit mining techniques, the mine will initially process approximately 70,000 tonnes of rock per day, with this figure soon ramping


Mongolian mining

Oyu Tolgoi project

up 85,000 tonnes per day. The yield from the first phase of mining will be ground through one semi-autogenous grinding mill. Expansion to new underground areas will result in an additional increase of up to 140,000 tonnes per day, with a possible increase to 170,000 tonnes per day to follow. The copper production from the

mine, from reserves that extend up to 20 miles beneath the desert, is projected to come in at 450,000 tonnes per annum for the next 50 years. The importance of the Oyu Tolgoi mine really can’t be overstated. By the end of 2012 the project’s operators had paid more than $870 million in taxes,

“It is believed that the mine itself will likely account for more than 30 percent of Mongolia’s GDP when it reaches full production in 2020” Be asia & pacific | 17


regional focus:

Khanbogd Oyu Tolgoi Technical Training Centre


Mongolian mining

$870 million

Copyright © 2013 Oyu Tolgoi

In taxes and fees paid by Oyu Tolgoi to the end of 2012 fees and pre-payment to the government and purchased products and services from Mongolian suppliers to the tune of $1.1 billion between 2010 and 2012. As of 30 April, 2013, 10,888 Mongolians held jobs linked to the project, making up 89.25 percent of the total workforce, a figure that exceeds the operators’ target of having no less than 70 percent of the workforce being Mongolian during operation. In addition to the opportunities being provided at the mine site itself, those behind Oyu Tolgoi have invested more than $125 million towards local education and training, and provided financial support to more than 6,000 trainees across 21 aimags (Mongolian tribes). On 9 July, 2013, the first convoy trucks left the Oyu Tolgoi mine, carrying with them copper destined for China. This marked a massively important milestone for the operation and for all parties involved in the project. Oyu Tolgoi is very much central to Rio Tinto’s efforts to produce new mineral supplies in developing resource hotspots and to reduce its dependence on iron ore. Meanwhile it is believed that the mine itself will likely account for more than 30 percent of Mongolia’s GDP when it reaches full production in 2020.

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regional focus:

Roads less

It is risky and sometimes scary to get and countries like Mongolia that ar make it worthwhile – and these are b

written by: John O’Hanlon 20 | Be asia & pacific


ACCL International

s travelled

t involved in post-conflict economies re modernizing apace: the rewards by no means just financial rewards

| research by: James Boyle Be asia & pacific | 21


regional focus:

Camp Lonestar, a 500 man facility located in the Tora Bora region of Eastern Afghanistan


ACCL International

O

n March 1 this year ACCL International’s President, Haji Habibullah Pirzada, opened the company’s newly built headquarters in Kabul. ACCL is an Afghanistan-based company that makes use of its unique approach to partnership in a variety of post-conflict or underdeveloped regions worldwide to create wealth. It is a sign of the success of this unusual company that it had grown out of the premises it occupied since it was established in 2003. Commercial success in Afghanistan is counter-intuitive to say the least, and it’s no place to take a risk avoidance strategy. But the opportunities for people of vision are huge. Pirzada was accompanied at the opening by his co-founder Sargon Heinrich, a cosmopolitan and multilingual former Bechtel executive whose experience included managing the provision of logistical support to the international initiative to put out the oil well fires Saddam Hussein left behind when he was chased out of Kuwait at the end of the first Gulf war. That experience must have given him a taste for unstable, challenging post-conflict, what he calls austere environments because he headed over to Afghanistan where he met Pirzada, who led a construction and dry-walling company in Kabul. Together they set about the task of building training facilities for the future development of Afghanistan, some of them based on former US military establishments. The pair started with small refurbishment projects, gradually taking on larger assignments till today ACCL is one of the largest employers in Afghanistan, with 3,000

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regional focus:

3,000 People employed in Afghanistan by ACCL International

ACCL provides full life support services including catering

24 | Be asia & pacific

staff. And this growth has been organic – these are local staff, explains Paul Stukel, a co-director of ACCL International. “That has been a key part of our philosophy in Afghanistan and elsewhere, summed up in our tagline Afghans Building Afghanistan. A lot of the large players bring in their own people, do their thing and then leave. There is no legacy, no local development.” That is a sound business model and it works in the short term. But sustainable business calls for a different approach. “If you are going to do business in Afghanistan, Mongolia, Kenya, UAE you really ought to help the local economy so that when and if you leave something of value remains.” It is this approach that worked so well in Afghanistan, allowing ACCL to be much more effective than arms-length companies. “We know the locals – because we are the locals!” says Stukel. This is the model ACCL International has exported to Mongolia among other places. Just over a year ago ACCL moved into another office, in one of Dubai’s outstanding buildings, the Reef Tower. Dubai, the company’s strategic hub since 2005, is something of a contrast to the operational locations, but it is ideal for the company,


ACCL International

ACCL International construction staff

says Stukel. “Dubai is the Hong Kong of the Middle East! It’s politically stable, tolerant and very business-friendly. Given our global expansion plans, we thought it was ideally suited as our international headquarters from which to support all our international operations from a procurement, logistical and financial perspective.” Apart from Kabul and Dubai, ACCL now has offices in Nairobi Kenya, Entebbe Uganda and Chicago USA – and crucially in Ulaan Baatar Mongolia. Mongolia is every bit as challenging as

Afghanistan. The remoteness of the mine sites, which are a primary market for ACCL, is only matched by the extremes of the weather. But that is an attraction rather than a deterrent for a company that has proven itself in Afghanistan, a country that is a war zone to all intents and purposes. “You are dealing with IEDs, local insurgency, and having to be careful who you hire because they might pose a security risk.” Mongolia is more secure politically but it has some parallels in other areas. In

“You really ought to help the local economy so that when and if you leave something of value remains” Be asia & pacific | 25


regional focus:

Afghanistan ACCL learned to manage people with vastly differing levels of education with basic literacy a problem in some cases. “To produce first world quality in a very difficult environment is something we have shown we can do. That impresses the mining industry because they tend to work in places that are remote and not the kind of place you take the family on vacation!” Once again, ACCL Mongolia is a local company incorporated in Ulaan Bataar. “We are a Mongolian company that plans to stay there, using as much Mongolian labour and resources as humanly possible. Again we work very closely with the officials there, establishing our bona fides on the basis that we are there for the long term. This is not a project to us, it is a commitment to Mongolia!” Mongolia is a treasure trove of resources, he continues, wide open to extraction projects of every kind. A single mine, Rio Tinto’s Oyu Tolgoi project, is expected to earn a third of the country’s GDP. But the activity is all exploration so far. Mining has yet to begin on the numerous sites that are under development in the Gobi Desert but when it does the activity will be frenetic. Building a mining camp, and supplying it, is very similar to building a training establishment or an academy, and there is certain to be strong demand for

ACCL’s services from this sector – it is currently developing independent camp operations in support of a number of south Gobi mines. Typically, this might include 300-500 man accommodation blocks, shopping and dining facilities; vehicle and heavy equipment repair facilities as well as entertainment and healthcare options. Meanwhile there is no dearth of projects to keep the local team busy

“We are a Mongolian company that plans to stay there, using as much Mongolian labour and resources as humanly possible” 26 | Be asia & pacific


ACCL International

Company President, Habibullah Pirzada reviews the construction plans at Bagram, just outside of Kabul

under its local operations manager Richard Tisdale. ACCL has built and is operating a coal storage facility in the Zamyn Uud free zone on the China/Mongolia border in partnership with Global Mongolian Holdings. Additionally it is in the process of developing a low cost housing feasibility study for the Mongolian government and mining company local resettlement and community development initiatives. Over the years ACCL has developed considerable expertise in the application of Steel Arch Formed Structures (K-Span) to building projects. One of the more cost effective construction methods available, this has proved a low cost way of providing durable commercial buildings in difficult

terrain, and has been approved by the United States military. The system’s primary application is for warehousing and multiuse structures required to comply with a range of national and local specifications, and the characteristic round arched roofs of these buildings can be seen at ACCL projects throughout Afghanistan. The Mongolia subsidiary is now building ten K-Span warehouses for an agribusiness conglomerate in north-eastern Mongolia. As the Mongolia business grows the country can expect to benefit from some imaginative interventions on the CSR front, though as yet nobody knows what they will be. In Afghanistan the company built orphanages, though its highest-profile project was its

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regional focus:

ACCL helped support Skateistan, a co-ed skateboarding school in Afghanistan


ACCL International support of Skateistan, the world’s first co-ed skateboarding school which takes Afghan boys and girls of all ethnicities, genders, and socioeconomic backgrounds, teaching them not only skateboarding skills and skateboarding instruction, but also healthy habits, civic responsibility, information technology, the arts, and languages. ACCL built at its own expense the largest indoor skateboarding facility in Asia for the internationally known project. “When boys and girls spend their one day a week at Skateistan it is sometimes the only square meal they get.� Another very imaginative project initiated in Afghanistan by ACCL founder Sargon Heinrich is a clothing design business that turns traditional Afghan materials and dress styles into high fashion, and sells it in New York, Paris or London, creating much needed local employment for women in the process. Thinking this way, Paul Stukel suggests, embeds the business in the minds and hearts of the people and differentiates it from the fly-in-fly-out, high security operations that typify service contracts in dangerous or demanding territory. The company has never had a confrontational situation with any of its employees, he says, largely because it has always consulted the traditional leaders when setting up a project. In a highly diverse tribal country like Afghanistan where not everyone gets along, this is the prudent approach. For more information about ACCL International visit: www.acclinternational.com

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regional focus:

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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regional focus:

Blasting thro

Projects like Oyu Tolgoi highligh mining market. General Directo role MAXAM Explosives is playing

written by: W research by: James B

32 | Be asia & pacific


MAXAM Explosives

ough barriers

ht the growth of the Mongolian or Andrew Forster discusses the g in the development of the sector

Will Daynes Boyle and Abi Abagun

Be asia & pacific | 33


regional focus:


MAXAM Explosives

I

n 2012, MAXAM celebrated its 140th birthday. Founded by Alfred Nobel in 1872, the group today stands recognised as being one of the leading service and industrial organisations operating on a global scale, with a yearly turnover of approximately one billion euros. Specialising in the development, manufacture and commercialisation of civil explosives and initiation systems for mining, MAXAM boasts a presence in all of the world’s major and developing mining areas. One such area is Mongolia. The mining sector within Mongolia dates back over 90 years to the nationalisation of the Nalaikh coal deposit in February 1922. In the decades since, the sector’s role in Mongolia’s economic growth has expanded to the point where, as of 2011, it was responsible for producing 20.2 percent of the country’s GDP, 69.6 percent of its total industrial output and 89.2 percent of its export product. “A subsidiary of MA X AM, MA X AM Explosives began its work in Mongolia in 2006,” explains General Director, Andrew Forster. “Today we have two major contracts in the country, one with Oyu Tolgoi and the other with SouthGobi Sands. Much of what we have achieved to date has come in the last couple of years and has brought us to the point where we are now able to see the culmination of seven years of hard work as Mongolia becomes a rapidly developing mining region.” As Andrew goes on to state, while mining activities have existed for the better part of a century in Mongolia, it is really only in the last ten years or so

Be asia & pacific | 35


regional focus:

that it has really been promoted as being a mining destination of real interest. “It was in the aftermath of agreement being reached on the development of Oyu Tolgoi that we saw a significant boom in foreign direct investment into the country. While the level of this investment does continue to fluctuate somewhat there is no doubt that mining will continue to play a hugely important role in the economic growth of the country going forward.” Oyu Tolgoi LLC is Mongolia’s largest copper and gold mining company and is a strategic partnership between the Government of Mongolia, Turquoise Hill Resources and Rio Tinto. Located beneath the surface of the Gobi desert the Oyu Tolgoi mine is thought to contain approximately 82 billion pounds of copper and 46 million ounces of gold in measured, indicated and inferred resources. Here MAXAM Explosives serves as the blasting products and services provider, lending its considerable experience and historical excellence to Oyu Tolgoi. The main factor behind Oyu Tolgoi’s initial attraction to MAXAM was its guarantee of security of supply of one of its flagship products, its RIOFLEX watergel explosive. A MAXAM-developed innovation that is unique to the company’s

product portfolio, RIOFLEX is designed to be safe in its manufacture, transport and use, and provides optimum results in all environmental and mineral conditions. In the simplest of terms, without MAXAM Explosives’ products there would simply be no mine as it exists today. “The explosives we provide on-site for Oyu Tolgoi are used for open pit work, shaft sinking and lateral development, and this is being carried out

“In the simplest of terms, without MAXAM Explosives’ products there would simply be no mine as it exists today” 36 | Be asia & pacific


MAXAM Explosives

Maxam’s latest mobile sensitising units delivering (MSUs) Rioflex 7000 at Oyu Tolgoi

by a workforce that is 90 we do. In addition to their personal characteristics percent Mongolian. These these individuals also individuals have been benefit from the robust trained up from having zero experience to the point training programmes that The year that MAXAM where they are now able to MAXAM as a group use was founded deliver all the services that internationally.” the project requires.” The efforts made by the As Andrew will attest company to establish a local Mongolians in general possess a number workforce are very much in line with one of of important qualities that make training core philosophies that MAXAM applies to them up for such important roles much its operations in every single country. “As a less of a challenge than one would perhaps group,” Andrew says, “we have a strong social expect. “Mongolians as a whole learn programme and we are applying that here in very quickly indeed. They are extremely Mongolia with our goals being to contribute literate, pick things up quickly and possess positively to the social fabric of the country a healthy desire to learn new skills, which and improve the general wellbeing of its is vitally important considering the work people. We are not here to simply make a

1872

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regional focus:

Maxam delivering its products safely, accurately and on time

38 | Be asia & pacific


MAXAM Explosives

20.2% Of Mongolia’s GDP that mining was responsible for in 2011 quick profit and then leave, instead we are committed to leaving Mongolia a better place for us having been here.” Despite its best intentions the company has still had to work hard to overcome some of the legal-administrative challenges in the country. Over the last year MAXAM Explosives has been working hard to convey the fact that it is a Mongolian registered business that pays Mongolian taxes and plans to one day have Mongolians in charge of running it. “For all intents and purposes,” Andrew enthuses, “we are a Mongolian company and it is our desire to be recognised as such.” As the company looks to the future Andrew is equally keen to highlight the fact that, as important as it is, Oyu Tolgoi is just one contract and that MAXAM Explosives’ aim is to become a major player the Mongolian market. “We are a flexible and adaptable business that is ready to face whatever the market has to throw at us as it evolves. We are very much here to stay and we will be contributing to the growth of Mongolia for many, many years to come.” For more information about MAXAM Explosives visit: www.maxam.net

Be asia & pacific | 39


Delivering

seamless service written by: Will Daynes | research by: David Brogan

40 | Be asia & pacific


NTT Communications

NTT Communications (Thailand) President, Tsuyoshi Kawashima, discusses the growing importance of Thailand to the South East Asian region and how the internet and other telecoms services are becoming ever more critical to people’s lives

Be asia & pacific | 41


NTT senior management team


NTT Communications

W

ith the internet age in full swing and very much a part of everyday life in the Western world and developed nations, it is in the fast-developing nations across the world that the expansion of the digital sector is most prevalent today. One such country that is currently experiencing a rapid expansion in internet usage is Thailand, where access to the technology has become an increasing necessity, not only in business, but also in personal life. NTT Communications (Thailand) is as aware as anyone else of the importance of the network that connects Thailand to other countries and the role this network will play when it comes to companies looking to expand their global business in Thailand. NTT Communications (Thailand) is a subsidiary of NTT Communications Corporation (NTT Com), itself a division of Nippon Telegraph and Telephone Corporation, one of the world’s largest telecommunications companies. Founded in 1999, NTT Com specialises in delivering high-quality voice, data and IP services to its customers around the world. Renowned for its diverse information and communication services, expertise in managed networks, hosting and IP networking services as well as industry leadership in IPv6 technology, NTT Com currently has over 17,800 employees working from subsidiaries and offices in 87 cities in 31 countries and regions around the world. “Here in Thailand,” explains NTT Communications (Thailand) President, Tsuyoshi Kawashima, “there is a great deal

Be asia & pacific | 43


NTT Communications

of evidence that highlights and today has key systems i nteg r at ion , net work the growing importance of the internet and IT solutions integration and application as a whole, not least the i nteg rat ion p r oj e c t s running with over 600 key recently completed 3G NTT Com employees customer clients. frequency auction. It goes worldwide In response to the evolving without saying therefore that for many large telecoms nature of the industry the operators, Thailand has become a market of company plans to increase the number of staff it employs, while also developing more particular interest.� Indeed this interest has led to a number detailed services such as consultation, system of multi-national companies, particularly provisioning and support. Furthermore, those based in Japan, beginning to it promises its customers with end-to-end invest increasing amounts of capital into support while connecting with international operations in Thailand. For its part NTT branches of NTT Communications in order to Communications (Thailand) has been a key support their specific needs. player in launching the Enterprise Cloud “Through a combination of our existing Services Platform into South-East Asia, services, including security services, system

17,000

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#1 in cloud security

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NTT Communications

integration, enterprise cloud service and has dissuaded major multi-national players in enterprise co-location services, and new the vein of Microsoft or Google from turning solutions, I believe we are extremely well their attentions to the country, as well as placed to expand our customer reach on focusing their efforts on markets such as both a domestic and international scale,” Hong Kong and Singapore. “With the number of 3G users in the Kawashima continues. “Our strategy for the short and long-term future calls for us country growing, and with this in turn having to meet the growing demands of both Thai a significant positive impact on internet and international customers. In terms of the usage, now appears to be the perfect time former, one of the primary to capitalise on the business ways we intend to do this is opportunities that a new through the construction and state-of-the-art data centre opening of a new data centre could bring,” Kawashima here in Thailand.” enthuses. This view is Until now Thailand has clearly one that is shared When NTT’s new lacked such infrastructure, by those in government, Thailand data centre is a fact that many, including with the Thailand Board expected to open Kawashima himself, believe of Investment announcing

2014

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NTT Communications (Thailand) President, Tsuyoshi Kawashima


NTT Communications

“While we will continue to pursue geographic expansion, we will also remain true to our commitment to increasing our local presence” in 2011 that said data centre would in fact be larger than first imagined, occupying some 5,000 square metres of space. With construction now in its advanced stages, the data centre is set to come online by the end of the second quarter of 2014. “There are three core aims that we have when it comes to the development of our business in the coming months and years,” Kawashima states. “The first revolves around bringing in new services, such as the NTT Enterprise Cloud service, which are tailored directly towards the ever-changing needs of both our existing and future customer. The second meanwhile is focused on bringing our data centre into operation as a means of attracting investment into Thailand from abroad, while the third aim has been dubbed ‘Thailand+1’, which is all about expanding our geographic footprint outside of our home nation into other countries within the Mekong region.” Key projects recently undertaken include the launching of NTT Communications offices in Yangon, Myanmar, Vientienne, Laos, and Phnom Penh, Cambodia, in the last few years, as well as bringing ISP services into the said countries. “These are among the countries that we anticipate becoming more important in attracting Thai business in the years to come,” Kawashima says. “We want to create

something of a synergy between our country and those in the Mekong region and thus it is very much part of our strategy to introduce IT services across it, particularly in Myanmar, where we have had some very positive talks with Myanmar Post and Telecommunications (MPT) about future opportunities.” Clearly Kawashima has huge confidence that Thailand and the Great Mekong region will continue to go from strength to strength. “We are extremely excited about what is going on in this part of the world,” he concludes. “It is in part because of our confidence in the market that we have been able to carefully and clearly set out our ambitions for the future. These clearly focus on increasing our capacity through the creation of the new data centre, improving our product range and introducing new services such as storage and data migration offerings. While we will continue to pursue geographic expansion, we will also remain true to our commitment to increasing our local presence and reach in the fast growing market that is Thailand.” For more information about NTT Communications visit: www.th.ntt.com

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Keeping things

connected

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Australian Satellite Communications ( ASC)

The qualities that have brought ASC such success over the years and how its acquisition by SpeedCast will take the business to the next level

written by: Will Daynes research by: Peter Rowlston

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S

ince it was established in 1985, Australian Satellite Communications (ASC) has provided a wide range of satellite communications solutions throughout Australia and surrounding regions, building up a reputation along the way as being the leading provider of reliable, turnkey satellite communications solutions, focusing on the mining, oil & gas, construction, education, defence, and maritime, industries. “Right from the business’s inception,” explains Paul Krzystoszek, Solutions Director, “the vision that the founder and previous managing director Chris Joseland had for the business was for it to always endeavour to be at the forefront of the sector and first with new technologies, solutions and innovations. Utilising his considerable knowledge of the market and the industry he really helped establish the level of entrepreneurship that the business has retained ever since.” In the years that followed the company led the industry with the development of a number of technologies including being the first to adopt its iDirect broadband IP platform, which essentially marked the dawn of the era that saw the very small aperture terminal (VSAT) being supplied on mass to customers throughout the region. The success of ASC in the last decade can in significant part be linked to Australia’s mineral and resources boom that commenced during 2005. “In many ways,” Krzystoszek continues, “our timing in adopting the iDirect technology coincided beautifully with the boom. It was the demand of this sector for such systems

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Dish maintenance


Australian Satellite Communications ( ASC)


Dish installation

that saw us grow several-fold rapidly and that also created what remains to this day a hugely competitive market in Australia.” Given this competitive climate it has never been more important for a business to stand out from amongst the crowd. Fortunately, as Krzystoszek goes on to highlight, this has never been an issue for Australian Satellite Communications. “Today, we use three specific words to describe ourselves: Credible, Flexible and Reliable. These are the key characteristics that have helped make ASC what it is today. In the early years we drew particular attention to

our flexibility and our ability to deliver solutions in timeframes that others simply couldn’t achieve, thus setting the standard for delivery times that exists now.” Credible and reliable, meanwhile, are two of the most common terms used by the company’s clients to describe their experiences of working with ASC. “It was Chris Joseland’s philosophy that every little detail of what the company did would contribute ultimately to the experience of the customer,” Krzystoszek states. “He also believed that it was important that the company take an ‘under promote and over deliver’ approach. This became almost a

“The vision that the founder and previous mD Chris Joseland had for the business was for it to always endeavour to be at the forefront of the sector” 56 | be asia & pacific


Australian Satellite Communications ( ASC)

1985 The year that ASC was established

motto of the business and helped breed that strong sense of satisfaction from our clients that we constantly strive to retain to this day.” In the early days of the resources boom the industry was a much different place where every customer was essentially after a basic system or product that could connect to the internet. “We have photos of the very first system to leave our facility, which consisted of a dish on a tripod stand, with a cable running from a modem into a single PC: it was that basic,” Krzystoszek says. “Today, mine sites are much more sophisticated and a much more educated market means that the focus is now on delivering value added services. These include things like wireless distribution, VoIP, link optimisation such as acceleration, web filtering and firewalling and many other associated value add services.” With the needs of its clients evolving in such a rapid fashion it is all the more necessary for ASC to embrace innovation. It is for this very reason that the company pays particular attention to Product and Solutions Development divisions specifically tasked with investigating new technologies and developments within the industry. This division has a very simple mission and that is to help ASC get more out of the tools and solutions it has.

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“When it comes to the resources sector,” Krzystoszek says, “we know for a fact that there are a great number of projects out there that are looking specifically at how to achieve greater automation of their operations. This drive towards automation is resulting in greater bandwidth requirements at the mine sites themselves as more data throughput will be required to control various equipment and processes.

This therefore is a real area of growth that we expect to take off as more automation in mines becomes a reality.” In December 2012, an announcement was made declaring that SpeedCast Ltd, a Hong Kong-based global network and satellite communications service provider, had completed a buyout of ASC. In joining the SpeedCast Group, ASC will be able to offer its customers a wider portfolio of products and

“In joining the SpeedCast Group, ASC will be able to offer its customers a wider portfolio of products and services and better serve thier needs”

Remote site trailer

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Australian Satellite Communications ( ASC)

Remote site communication

services and better serve its global customers’ needs beyond Australia. Meanwhile, SpeedCast will leverage ASC’s outstanding team to deliver continuity of experience for existing ASC customers, while augmenting SpeedCast’s own team. “The biggest plus for us by joining by SpeedCast is clearly the fact that they are a global player,” Krzystoszek enthuses. “SpeedCast has the infrastructure already in place and that means that today we can provide services on a global scale and gain access to a vast variety of solutions that we didn’t previously have. The net result for ASC is that we can now become a more aggressive player on the world stage and one that will be

on par with known global brands worldwide.” The established immediate plan for ASC is to ensure that it remains a well organised and structured organisation, even as its integration with SpeedCast continues at pace. “We are pushing forward with remaining at the forefront of the industry in the ever changing and highly competitive industry. We have a strategy and plan in place to remain sector leaders, competitive and as always, profitable.” For more information about Australian Satellite Communications (ASC) visit: www.ascs.com.au

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Flying into

Mauritius may seem remote but it is reaching Europe, Africa, Asia and Austra of using that advantage to be a profita

written by: jo research by:

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Air Mauritius

o recovery

strategically placed, with a network alia – Air Mauritius has worked out ways able carrier as well as a national asset

ohn o’hanlon : vince kielty

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Business class cabin


Air Mauritius

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nyone with an eye on the travel industry will see that there has been a lot of activity around Air Mauritius in the last year and that it has begun to make ripples that will get it noticed even by its biggest competitors. The fact is that Air Mauritius is not simply a regional airline but one that flies each week to four continents and is punching way above its weight in the global industry. As an example, this month alone it announced that it is about to re-establish two weekly direct flights to Durban, one of South Africa’s most vibrant commercial centres, and had expanded its services to Johannesburg and Nairobi in order to reinforce connectivity to Africa and better position Air Mauritius as a bridge between Africa and Asia. Mauritius has economic, political and cultural ties with Europe, Asia and Africa. On the other hand, from an airline connectivity perspective it is not ideally situated and is at a disadvantage compared to hubs in the Middle East, Johannesburg, Nairobi or Addis Ababa. The status of the country as a leading tourist destination and financial centre has been hugely supported by air connectivity as reflected by the Air Mauritius network that has managed to overcome the geographical disadvantage of Mauritius and made it a potential hub for the region. So, also this month, the airline said it would start flying direct to Beijing on July 6 2013. Following the introduction of twiceweekly direct flights to Shanghai earlier this year and adding flights to Hong Kong, Kuala Lumpur that provide connections to mainland China, the direct link to the latter’s

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€6.1 million Profit in Q3, FY 2011/12

André Viljoen, CEO Air Mauritius

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capital, Beijing will be yet another catalyst for the development of the Chinese market, said Air Mauritius’s CEO André Viljoen. “It opens new avenues for the consolidation of ties between our two countries and allows Mauritius to further tap into the opportunities offered by one of the world’s fastest growing economies.” All this activity is part of the ongoing implementation of a new ‘7-Step Plan’ that he has put in place to turn Air Mauritius’ business around from the lossmaking situation it was in when he came on board in 2009. Formerly, Andre Viljoen was the CEO of SAA, where he restructured the organisation and oversaw the replacement of its entire fleet. Dating back to 1967, just as the island was gaining its independence, when it was set up as a joint venture between the government of Mauritius, Mauritian company Rogers, Air France and BOAC, Air Mauritius is based at the capital Port Louis and operates out of Sir Seewoosagur Ramgoolam International Airport. Over more than four decades it has grown to become the fourth largest carrier in sub-Saharan Africa. While it is the flag carrier of an independent nation, it has suffered from being a destination airline, whose main business was seen as bringing tourists and visitors to what is after all one of


Air Mauritius

the most idyllic and attractive places to visit, with its appealing French ambiance, though it remained predominantly under British influence since the early 19th century. And Air Mauritius had to face negative financial results in recent years. In the fourth quarter of 2011 alone the airline lost €3.6 million. But reel back to when Viljoen joined the company in 2009 as CFO at the time of the US sub-prime crisis. “We faced a huge challenge,” he says, “but we managed to get out of a fuel hedging loss of €150 million

– and the following year we turned that into a profit of €10 million. However at the start of the 2011 financial year oil prices shot up from 90 to 120 dollars a barrel and the Euro fell against the dollar.” Air Mauritius receives most of its income in Euros, while fuel, representing around 40 percent of all its costs, is paid for in dollars. “Those market shocks are not in our control any more than the weather,” says Viljoen. It all goes to show how volatile the market is. The company recorded losses of

“All this activity is part of the ongoing implementation of a new ‘7-Step Plan’ put in place to turn Air Mauritius’ business around” Be asia & pacific | 65


“We needed to make some radical changes, changes that would not be accepted by our shareholders unless they were supported by an independent professional services company” €21.2 million in the nine months to December 31 2011: however in the third quarter ending December 31 2012 it made a profit of €6.1 million, against a €3.6 million loss in the corresponding period the previous year. These green shoots, he says, can be credited to the company’s 7 Step Recovery Plan. What he refers to as market shocks may not be in an

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airline’s control, but there is a smarter way to manage the business, he believed. Right at the beginning of 2012 he called in Seabury APG, a consultancy that specialises in the airline industry. “We chose Seabury above all other consultants,” Viljoen explains, “because they had some impressive tools. Some consultants just tell you the time using your own watch!


Air Mauritius

Air Mauritius pilots

We needed to make some radical changes, changes that would not be accepted by our shareholders unless they were supported by an independent professional services company. Seabury did some interesting diagnostics. They started by asking whether our business model was challenged only because of fuel prices and the Euro, or was there more? Well, we knew there was more! They helped us put it concisely into presentations we could show to our stakeholders and shareholders.” Using these diagnostic tools, Seabury was able to predict that if Air Mauritius carried on business as usual, with its current fleet flying over its current network, it would make losses between €27 and €33 million in each of the years to 2017. “The time had come to revisit the business model,” he says. Seabury

worked with the airline over five months, examining every detail of the business, making constant presentations and in the end put a very convincing argument forward to the shareholders that if nothing was done there would be no Air Mauritius in a year’s time. The first task for Seabury was to approach a hundred stakeholders from government right down to the hotel and bar owners on the island, to find out exactly what kind of an airline they wished Air Mauritius to be. “They found that everyone loves Air Mauritius – they see it as their national carrier – but they all had different ideas. Some thought we should be like Emirates: that the government should give us a blank cheque to renew our fleet and bring the world and his wife to Mauritius. It all centred on whether our main purpose

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should be profits or national interest.” The trouble is that Mauritius does not have any oil or natural resources of its own so it can’t afford to support a loss making airline of the ‘National Developer’ type, whose core objective is to stimulate the country’s economy. “We concluded that our primary purpose is to be profitable in the national interest – the two are not mutually exclusive. Once you are in profit, then you can start to

think about being the flag carrier. Our role is to be a profitable national airline.” Seabury helped Air Mauritius to create a matrix, the quality of service index (QSI) that determine the passengers’ choice of an airline. Among the parameters, the more frequent the flights, the more ‘friendly’ the times of those flights, and the better the connections with other airlines, the higher the QSI. Armed with the QSI, supported by a global database,

“Air Mauritius has demonstrated its ability to adapt and we have every reason to believe that we are equipped to meet the challenges ahead”

Premium class check-in area

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Air Mauritius

Air Mauritius cabin crew

he says, it is possible to make competitors. Today BA flies to Mauritius four times a changes that will increase it – deals with other airlines, week from Gatwick: we fly changes to flight times – then the same number of flights work out whether the entire from Heathrow. Neither gives Number of Air Mauritius travel industry, down to a perfect service; but if we employees. individual agents, are giving work together we can cover Air Mauritius the market the entire week.” share that is its due. The 7 Step Plan grew out An important factor affecting the airline’s of Seabury APG’s network model, which uses credibility in the market was the frequency of planning and financial evaluation tools to its long haul flights, which at 2.2 per week put estimate the market share the airline should it on a par with charter companies. Emirates achieve. The first step is to concentrate the has competed successfully in Mauritius network, with fewer destinations, greater precisely because it grew its frequency from frequency and more alliances like the one three to five, and then to seven flights a Viljoen outlines while suspending unprofitable week, Viljoen says. “Frequency stimulates routes. Step 2 identified ways of maximising the market and takes people away from revenues. The company initiated a number of

3,000

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Air Mauritius measures to boost sales, like rewarding frequent flyers better, making better use of e-commerce and entering partnerships with other airlines, banks or car hire companies. Cost reduction across the board and disposal of non-core assets were taken care of in Steps 3 and 4. Step 5, described as a game-changer by Viljoen, would see the replacement of Air Mauritius’s fleet of old A340-300 aircraft with new generation Airbus A350 or Boeing 787s, attracting partner airlines and saving up to 25 percent in fuel. That will take some time to implement, of course and is expected to be complete by 2017. Meanwhile the move to dramatically upgrade levels of service by Air Mauritius’s 3,000 employees is just about fully implemented via a training programme delivered by the management guru Ron Kaufman. That’s Step 6: the final step, Step 7, involves leveraging the company’s human capital by instilling a performance management culture, including a performance related bonus plan. In contrast to the bleak scenario of the ‘business as before’ model, Air Mauritius is now set on a path of profitability this year and beyond, André Viljoen believes. “Since we undertook a review of our business model and embarked on the path of transformation Air Mauritius has demonstrated its ability to adapt and we have every reason to believe that we are equipped to meet the challenges ahead.” For more information about Air Mauritius visit: www.airmauritius.com

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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

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

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Asian Mineral Resources

A

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

400

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Seen

Contact us today and put your company in the spotlight!

vincent@bus-ex.com 76 | be asia & pacific

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

“The general level of education here is high, and there’s a strong will to acquire new skills” be asia & pacific | 77


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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Asian Mineral Resources

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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Continental Coal

African energy for Asia Continental Coal is a company whose second name could be ‘expansion’: with three operating mines and another in development this year, growth is a key part of its policy

written by: john o’hanlon research by: Robert Hodgson Be asia & pacific | 81


Continental Coal

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ased in Perth, Western Australia, is destined for Asia, shipped out through the and listed on the Australian largest coal terminal in the world, Richards Securities exchange (ASX), Bay in KwaZulu Natal. It might be thought Continental Coal is a mining that Australia itself, or the coalfields of company with an Australian India were better placed to supply China, accent – which means it understands coal and it is true that logistically these do have production and, even more importantly, the an edge on South Africa. However Jason market that is blotting up most of the world’s Brewer the company’s finance director has coal and promises to do so for a long time. This pointed out that reliability of supply is of the is of course Asia, and notably China and India. first importance to the power generators of However Continental Coal is a thermal coal Asia. Thanks to Richards Bay South Africa producer, which means its primary market is can provide a more dependable service power generation: whatever the shape of these that either Indonesia with its quality issues great economies’ industry and even Australia, where in periods of future growth, port expansion and rail energy is going to be required infrastructure projects delays and the most cost effective are an issue. way to provide this is still coal. Continental currently The company is unusual in has three operating mines, that its production assets are Penumbra, Vlakvarkfontein currently all located in South and Ferreira, producing 2.8 Invested at Africa. The head office may million tonnes per annum Penumbra mine be in Perth but the company of thermal coal for both the defines itself as a South export and domestic markets. African producer. As well as being listed on In 2013/14 Continental is set to commence the ASX, it has been listed on London’s AIM development of its fourth thermal coal mine, market since September 2011, giving it access De Wittekrans. The Ferreira mine near Ermelo to a wider variety of investors. It is now in the in Mpumalanga Province is just two kilometres process of listing on the Johannesburg Stock from the company’s Delta processing plant. It Exchange too, and its CEO is a South African. is a conventional open-case mine: operations Don Turvey has spent most of his 27 years’ started here in 2008, and the mine was slated experience in the coal industry in his native for closure last year until the mine’s life was country, much of it working for BHP Billiton, extended last year to incorporate adjacent through he has experience of Australia, the resources. It is now expected to produce up to an additional 700,000 tonnes. USA and Indonesia as well. Though it has key supply agreements However a more recent acquisition, with Eskom, South Africa’s national power Vlakvarkfontein another open cast mine 100 generation company, the bulk of its production kilometres away near Delmas to the west

$33

million

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Continental Coal of Johannesburg is a key Endeto Engineering asset regarding the domestic Endeto Engineering is a new established company in market for Continental. Middelburg, Mpumalanga with a great future ahead. Under a contract signed in The combination of skills shared by the owners of Endeto March 2012 it is one of only Engineering is a strong foundation for the success of the 25 direct suppliers of coal business. Our members have extensive experience in the to Eskom, and its 17 million maintenance and production fields of the Engineering Industry and have served the Industry for over 20 years. tonnes of proven reserve is They also specialize in Power Generation experience sufficient to keep supplying with specific experience in Maintenance Management it for another decade. (Mechanical and Electrical), Contract Management and Between them Ferreira and Project Management. Vlakvarkfontein produce 1.2 We specialise in steel fabrication, machining, repairs, million tonnes per annum mechanical maintenance and construction, recognising for the domestic market and the needs of today’s industry. admin@endeto.co.za 600,000 tonnes for export. Ferreira is now a stable operation while Vlakvarkfontein is exceeding all its targets and is now producing 1.4 million tonnes a year. However it is Continental Coal’s third operating mine Penumbra, five kilometres from Ferreira, that is driving the next phase of the Australian company’s growth. Production started there at the end of 2012, with the first coal being mined in November. Since then it has been a question of fast-track development: the first continuous mining section, including breakers and conveyors, was installed last December, and this was followed up in February this year by a second. Ferreira coal mine

“Listed on the ASX and AIM, Continental Coal is now in the process of listing on the Johannesburg Stock Exchange” Be asia & pacific | 85


Penumbra is currently producing in the region of 30,000 tonnes a month: at full capacity this will be more than doubled. That stage should be reached before 2013 is out and once the final instalments of the $10 million from the sale of its non-core VanMag vanadium and magnetite arm to a Chinese company have been banked. In all, around $33 million has been invested. This is an underground mine, with enough reserves to last ten years: in the current financial year it is expected to 200,000 tonnes of high quality export coal, generating some $17 million in revenue while at full production it will be generating half a million tonnes for the export market. All this is very impressive, but it won’t get Continental Coal to the target it has set itself, which is to reach ten million tonnes per year at some point in 2015. Expect then to see a lot more expansion of the type that has already taken place. In 2011 a feasibility study was completed on the company’s De Wittekrans complex, which has the potential to produce 2.4 million tonnes per year of a thermal coal product described as ideally suited to the Asian coal market over an initial 30-year mine life. De Wittekrans has the potential to become the Company’s flagship project, Don Turvey believes, starting as an open cast operation and later graduating to an underground pit

The company currently sees De Wittekrans as the jewel in its crown, holding as it does estimated reserves of 44 million tonnes, 16.2 million of them in the proven category: it brings the company’s total proven reserves in south Africa to 32.3 million tonnes. Continental Coal’s community involvement and social responsibility commitment is aimed at encouraging economic development in the areas in which it operates. In the early part of this year the first group of students obtained

“Penumbra is expected to produce 200,000 tonnes of high quality export coal, generating some $17 million in revenue” 86 | Be asia & pacific


Continental Coal

their certificates for successfully completing the first level of their module under the company’s Adult Basic Education and Training Program at the Vlakvarkfontein Coal Mine. In addition directors and managers visited the Arbor Village, located near to the Vlakvarkfontein Coal Mine, where three classrooms at the Arbor Primary School have been renovated and where the donation of a mobile office to the Arbor Home Based Care Group was made by the company to assist in the care of the elderly and sick and the bi-monthly clinic with the Department of Health. Phase 1 of a Lavender Oil Program at the Arbor Village commenced in February 2013, with an initial eight people employed on this project. The company is very active with other prospects in South Africa, developing a feasibility study for its Vlakplaats project

under an agreement with the Korean company KORES. Vlakplaats is close to Wolvenfontein, another development project recently acquired to consolidate Continental Coal’s position in the Delmas region. At the same time as it reaches out for its ten million tonnes target Continental Coal is looking to expand beyond South – and even southern Africa. Through its Botswana subsidiary, Weldon Investment it holds three tenements in that country, holding massive reserves that it is currently drilling, and Don Turvey has talked of a potential move into East Africa – a move that would make it truly continental. For more information about Continental Coal visit: www.conticoal.com

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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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Toro Energy

uture

ce

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

48

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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

120 metres

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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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Toro Energy

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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CRITICAL

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Venturex Resources

ITICAL MASS IN THE PILBARA Perth-based Venturex Resources has a strategy to combine a number of copperzinc deposits in the western Pilbara around a processing plant that will put the region on the map for more than just its iron ore

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

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Serra Verde doca vein


Venturex Resources

W

estern Australia’s Pilbara region is best known today as one of the world’s biggest sources of iron ore and manganese – principally the former. These minerals are shipped out of Port Hedland to the hungry markets of north Asia and India, where demand for steel seems insatiable and likely to hold up for a good many years to come. In 2012, out of a total of 245 million tonnes of every kind of cargo that was exported through Hedland, 97 percent was accounted for by iron ore, 0.8 percent by manganese. Seen from the air, the Pilbara is one mass of red earth – iron is not hard to find. The Pilbara does contain significant quantities of other minerals but one could excuse people getting the idea they don’t amount to much. That being the case it was far-sighted on the part of Venturex Resources and its antecedents to turn their attention to the copper and zinc rich volcanogenic massive sulphide ore bodies that occur across the Pilbara. The geology was known about, but problematic, explains Michael Mulroney, who was appointed Managing Director in February 2012. “These deposits tend to occur in clusters of between five and eight, grouped around ancient volcanic centres. They were laid down billions of years ago, but they are directly analogous with the hydrothermal vents or ‘black smokers’ that have been found on the modern deep ocean bed.” The difficulty was that none of these deposits on its own would be commercially viable. The company’s strategy, since it established

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Venturex Resources in 2009 that its Evelyn deposit within its Liberty-Indee site had considerably greater potential than originally thought, has been to consolidate as many as possible of these deposits. Only 30 kilometres to the north, the Whim Creek deposits became available and were acquired by Venturex in 2010. “At about the same time,” says Mulroney, “we became aware that CBH Resources’ Sulphur Springs asset 190 kilometres to the east of Whim Creek might also be about to become available.” It took nearly a year, he says, to complete the acquisition of Sulphur Springs, but from then on the company had the critical mass it needed to launch a feasibility study. The result of the definitive feasibility study (DFS) was announced in December 2012 confirming very positive results on the entire copper/ zinc Pilbara operation, which it estimated would yield an average of 16,500 tonnes per annum (tpa) of copper, 30,000 tpa of zinc and 200,000 ounces of silver a year over at least 8.5 years. “This defines the Pilbara project as one of the larger emerging base and precious metals projects in Australia,” the DFS states. With around 84 percent of the ore considered in the study coming from Sulphur Springs, this is where the company plans to locate its brand new processing plant. The ore will come initially from a new underground mine at Sulphur Springs – but the beauty

“We are looking at adopting a ‘Kambalda’ strategy!”

of the project is that the plant, which will produce a copper concentrate and a zinc concentrate, will have plenty of capacity to process open pit mined ore from Whim Creek and Liberty-Indee too. The upside of all of these resources is considerable, says Mulroney. “We have identified just two deposits at Sulphur Springs, so we think there is a lot more potential there. We know of three at Whim Creek, which is a similar terrain but a bit younger, and the indications are that there could be several more based on the cluster model.” The Liberty-Indee deposit to the south is a

Sulphur Springs underground mine design

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brand new discovery, he adds. A lot of work is going into learning all about it but it appears to be a similar type of ore body and with that comes the expectation that there will be more to find there too. These assets on their own give the project the critical mass to justify development. However the opportunity does not stop there. The Pilbara offers other opportunities and from the advantage it has as the first mover here Venturex’s facility could well become a processing hub that will attract similar material mined by others. “It’s a model that worked well for WMC at Kambalda when they focused on their processing hub processing all the smaller mines’ material at a central point. We are looking at adopting a similar ‘Kambalda’ strategy!” The infrastructure favours that model too, he adds, with excellent roads leading to Port Hedland, the main export port for BHP Billiton and other iron ore and manganese production companies. With the DFS under its belt Venturex is in great shape for its next phase – discussions with financing institutions and potential offtake partners, who may themselves wish to put capital into the project. “At the same time we are working on continually optimising the project as it was defined in the DFS – there are still a number of areas we think we can make improvements.” Additional drilling

is due to start at three of the resources not included in the DFS – Kangaroo Caves near to Sulphur Springs and two identified deposits in the Whim Creek area. The permitting process has commenced and the indications are that this could be completed within six months. Mike Mulroney would like to have his financing well advanced by then, though he is realistic about the difficulty of attracting investors to an untried asset in what is perceived as a relatively

“This defines the Pilbara project as one of the larger emerging base and precious metals projects in Australia” 104 | be asia & pacific


Venturex Resources

high cost area. On top of mines are projected to close in 2014 and 2015 so zinc that the Australian dollar supply could be constrained is inconveniently strong for resulting in a lift in prices anyone hoping to export. with major implications for Nevertheless the Venturex Mine life of Pilbara our project.” proposal is compelling: project ‘conventional’ investors such Once permits and finance have been obtained, the as banks have shown a good way ahead becomes clearer. deal of interest, he says, and he thinks less conventional sources such as Developing the new underground mine from mezzanine finance, quasi-equity and offtake scratch, and building the processing plant, can partners may well provide a level of second be done in 20 months, which translates into first shipment in the second quarter of 2015. tier support. On the one hand, he points out, potential Positive relations with the traditional land investors are being asked to take a view on owners have been established, and the mine the copper and zinc markets ten years out. has been meticulously designed to minimise its On the other, the long view of both copper footprint both visually and environmentally. and zinc is bullish. “A number of large zinc The core source of material will be the Sulphur

8.5years

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“A number of large zinc mines are projected to close in 2014 and 2015 so zinc supply could be constrained resulting in a lift in prices” Springs mine, supplemented as time goes on by open pit material from Whim Creek. “The plant is currently scaled at around 1 million tpa, which gives us the 8.5 years mine life mentioned in the DFS,” says Mulroney, “but we are considering the possibility of scaling that up to 1.2 or even 1.5 million tpa.”

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For the moment all attention is on the Pilbara, but there’s another string to the Venturex bow which might yet provide almost as much excitement. The Tapajós region of Brazil’s Pará State has given up anything from 16 to 30 million ounces of gold over the last 20 years, mainly from garimpeiro,


Venturex Resources

Whim Creek exploration

or artisan mining. It’s known to be extremely well endowed with gold but it has only been in the last few years that modern exploration methods started to be applied. Venturex has quietly established itself in this area, with five assets covering 200,000 hectares not to mention another four projects in Mato Grosso State. “We think there are large scale gold deposits to be found there.” Mulroney suggests. “We did a drilling programme at a project called Nova Canaã late last year and got some very good drill results.” This was very much an initial foray, but follow up work will continue once the rains

abate, as well as at Serra Verde to the north. At this stage it’s impossible to predict whether Venturex will hang onto its Brazil gold projects, or simply add value before disposing of them. Whichever happens, the more mundane minerals of the Western Australian Pilbara look like establishing Venturex Resources as an important player in the relentless East Asian industrial revolution. For more information about Venturex Resources visit: www.venturexresources.com

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