BE.Monthly

ACHIEVING BUSINESS EXCELLENCE ONLINE INCLUDING

Goldcorp Cerro Negro: hydro-québec:

MONTHLY EDITION November 2013

Eurostar Diamond Traders:

Codelco - Chuquicamata Mine:

Bigger is better The world’s largest open-pit mine goes underground

HERE’S WHY ONTARIO, CANADA

IS YOUR NEXT

BIG IDEA Opportunities for mineral exploration in Ontario abound. Powered by global leaders in innovation and safety standards, our mining practices are among the safest and most sustainable in the world.

With business costs lower here than in most G7 countries, Ontario suppliers are more competitive – so you can depend on quality goods and services, delivered on time, on spec and on budget. Innovation is at our core. Make Ontario your next big idea.

YourNextBigIdea.ca/Mining

$2.9B

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

$2.6B in gold

$1.5B in copper

$1.4B in nickel

$787M

in other metals such as platinum and silver

Paid for by the Government of Ontario.

business excellence

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

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

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

Contributors George F. Brown, Jr. Consultant & author

HINT: For the best experience, click the fullscreen icon

Mush Honda QA Director, KMS Technology James Hardy Head of Europe, Alibaba.com

Subscriptions & Enquires info@bus-ex.com

Jacquard House, Queen Street, Norwich, NR2 4SX. England

Infinity Business Media Ltd

The content of this magazine is copyright of Infinity Business Media Ltd. Redistribution or reproduction of any content is prohibited. Š Copyright 2013 Infinity Business Media Ltd.

BE Monthly

|3

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

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

Heavy Industries (Subaru) and Nissan.

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

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

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

features

14

18

14 mining

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

18 interview

The M&A environment in Mining

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

24 top ten

24 6 |

BE Monthly

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

contents

32 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.

38 supply chain

Emerging Markets – how to source suppliers and export For companies looking to expand into growing overseas markets there are a great many ways to prepare properly.

42 Sustainabilty

32

38

Energy alternatives in Africa South Africa’s outgoing Minister of Energy shared with us her passion for finding sustainable energy alternatives.

50 Event preview

Dates for your diary A selection of upcoming events.

42

BE Monthly

|7

business showcases

52 72

Mining & Minerals: 52 codelco -Chuquicamata Mine Bigger is better

The world’s largest open-pit mine has been known since prehispanic times. Today a massive underground expansion project is taking the asset into a new era of future prosperity.

66 SRK Consulting – SVS Ingenieros Prospering in Peru

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

90

72 Sociedad Minera El Brocal

Powering the growth of Peru

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

90 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.

8 |

BE Monthly

contents

104

104 Goldcorp: Cerro Negro Cerro Negro ready to yield

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

120 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.

126 Walter Energy

Getting better all the time

126

152

Walter Energy Canada’s continuous improvement initiatives, are implemented in its metallurgical coal mines, is helping the company navigate difficult market conditions.

142 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.

152 Eurostar Diamond Traders

A cut above the rest

Even in the face of challenging market conditions the sheer quality and unmatched excellence of Eurostar Diamond Traders products mean that it remains a leading global force in the diamond sector.

BE Monthly

|9

business showcases

162 AngloGold Ashanti – Geita Gold Mine (GGM)

Tanzania’s most productive mine

In 2012, the Geita Gold Mine (GGM) became one of AngloGold Ashanti’s largest production centres and cash generating assets. Michael Van Anen, talks about how the company intends to further build upon its success.

172 The Kenya Chamber of Mines (KCM) A land of opportunity

162 172

Monica Gichuhi, Chief Executive Officer of the Kenya Chamber of Mines (KCM), discusses how the country is playing a vital role in making East Africa one of the most exciting new frontiers for mining on the planet.

184 kengas group

reliability in transport

Kengas Group Limited started with bulk petroleum products before moving into supply and delivery services within the Great Lakes Region including Southern Sudan.

186 Lubritene (PTY ) Ltd Growing on goodwill

186

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

194 Simang Group

Strength in numbers

By bringing viable businesses with strong growth potential under its wing, Simang Group is on its way to reaching its goal of becoming a platinum rated group of companies.

10 |

BE Monthly

contents

202

202 Cobre Las Cruces (CLC) 21st Century mining

By maximizing its return on considerable investment in recent years Cobre Las Cruces (CLC) is well on the way to achieving its vision of becoming a benchmark standard in modern mining operations.

energy & utilities: 210 Hydro-Québec

Energy for the future

The largest energy supplier in the Province of Québec: it harnesses Canada’s fast-flowing rivers to satisfy the demands of both domestic and export markets in North America.

222 Aqualogy

210

Transcending water into wellbeing

Aqualogy’s efforts throughout the world highlight precisely why it is positioned as a global benchmark when it comes to providing water solutions for sustainable development.

230 Tedagua

Water, water, everywhere

Tedagua is a significant player in Spain’s bid to lead the global desalination market: as its domestic market contracts the company is concentrating its efforts overseas.

240 Eskom Medupi

Medupi’s strategic power

230

The new coal-fired power station that is being built at Lephalale in South Africa’s Limpopo Province is a megaproject that has delivered great achievements despite being faced by many challenges.

BE Monthly

| 11

business showcases

oil & gas: 250 MISTRAS Group

Enhancing life expectancy

MISTRAS Group Executive Vice President, Phillip T. Cole, discusses the group’s priceless contributions toward North Sea development over the last 20 years.

258 SPX – Marley Mexicana Mexico’s tower of strength

By combining over a century of experience with cutting-edge, environmentally friendly technology, Marley Mexicana has solidified itself as one of jewels in SPX Group’s crown.

250

266 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.

276 SOS Safety International Going beyond safety

258

276

For more than 20 years SOS Safety International has been committed to providing quality products and service to its ever-growing list of clients.

Telecoms: 282 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.

12 |

BE Monthly

contents

292

transport & logistics: 292 Roads Authority of Namibia

The road to prosperity

A non-profit, mission driven organisation, the Roads Authority of Namibia is striving to build and maintain a safe, efficient national road network that benefits the entire country.

300

300 Namibia Airports Company Limited (NAC) The sky is the limit

Existing at the heart of one of Africa’s most exciting epicentres of aviation growth, it is the vision of Namibia Airports Company Limited (NAC) to become a benchmark service provider in airport operations and management.

308 Forwarding African Transport Services (FATS) Size does matter

By employing a multi-disciplined and customer focused approach, FATS has retained its position as one of Southern Africa’s most important freight forwarding businesses.

BE Directory 314 hannitan leather

Crafting comfort and quality

316 planet projects engineering service

308

318 princeco

mining suppliers BE Monthly

| 13

Growth in a tim

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

14 |

BE Monthly

John O’Hanlon

| R

Mining

me of scarcity

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

Research by

Richard Halfhide BE Monthly

| 15

I

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

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

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

“Growth is a perennial objective in an industry where assets continually erode” 16 |

BE Monthly

Mining

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

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

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

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

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

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

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

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

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

Click here

BE Monthly

| 17

Interview

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

BE Monthly

| 19

O

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

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

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

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

“The squeeze in margins has made the credit markets nervous about the mining sector in general” 20 |

BE Monthly

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

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

Interview

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

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

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

“The well-tried model whereby a

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

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

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

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

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

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

BE Monthly

| 21

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

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

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

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

However Rama Ayman identifies another

22 |

BE Monthly

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

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

“Of course these things come at a cost.

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

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

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

Interview

expenditures and other investments in local infrastructure.

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

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

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

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

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

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

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

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

BE Monthly

| 23

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.

26 |

BE Monthly

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.

BE Monthly

| 27

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.

28 |

BE Monthly

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.

BE Monthly

| 29

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.

30 |

BE Monthly

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.

BE Monthly

| 31

What first thi Come Your M

Making the commi meaningful part of th through measurement Words by

32 |

BE Monthly

George

Operations

t’s the ing that mes to Mind?

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

e F. Brown, Jr.

BE Monthly

| 33

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” 34 |

BE Monthly

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

BE Monthly

| 35

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.

36 |

BE Monthly

“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.

Operations

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.

BE Monthly

| 37

Supply chain

Emerging Markets –

how to source suppliers and export For companies looking to expand into growing overseas markets there are a great many ways to prepare properly Words by

E

James Hardy

merging markets such as the BRICS nations – Brazil, Russia, India, China, and South Africa – provide a wealth of opportunities for businesses looking to grow their global market share.

Not only are these countries home to billions of potential customers, they are great place to source materials and supplies at a low cost.

If you want to take advantage of the numerous business opportunities emerging markets offer, you should proceed with caution and conduct background research. Each country has a different way of doing business and

unique regulations, which you need to be aware of if you are to develop successful trading links.

Finding suppliers in growing economies Back in 2003, Goldman Sachs suggested that the BRICS nations will become the world’s most dominant suppliers, with China and India providing manufactured goods and services and Brazil and Russia accounting for much of the world’s raw materials[1]. It is thought that South Africa will be a very important mineral supplier across the globe, with figures from Citigroup suggesting the nation is BE Monthly

| 39

already the world’s richest country in terms of its mineral reserves, worth an estimated $2.5 trillion.

It’s not just the plentiful products and resources which make suppliers in the BRICS countries so appealing; sourcing products from emerging markets can be considerably cheaper as labour costs are lower.

However choosing a supplier is not simply a case of finding someone who can provide you with the products you want for the lowest price. You need to be able to guarantee quality, ensure your supplier can meet your demands and build a lasting relationship so you aren’t let down in the future.

Make use of the internet To get started finding potential suppliers, make use of the web. You can use global marketplaces to get in touch with suppliers and see what they can offer, or visit virtual trade shows, which allow you to peruse potential suppliers from the comfort of your desk.

Check trading capabilities When choosing a potential supplier it is important to check their trading capabilities; are they able to produce the quantities you need to the required quality and specifications? You also need to consider your own expansion plans; if a supplier is unable to cope with growing

“To get started finding potential suppliers, make use of the web” 40 |

BE Monthly

orders, it may not be worth establishing a relationship with them to start with.

Have contracts in place In the earlier days of trading with BRICS nations, many buyers did not have longterm purchase contracts with their suppliers. This was because products were so cheap, they could absorb the costs incurred if products were subject to an intellectual property infringement challenge or found to contain nonstandard parts.

This is no longer the case and buyers need to impose the same contracts on foreign suppliers as they would domestic companies. It is important to make sure that suppliers understand these contracts and what non-compliance will mean for them.

Establish communication Once you have selected suppliers it is important to maintain regular communication. Once again, you can make use of the web and tools such as email, video chat and instant messaging to check that suppliers have understood your requirements and are on track with orders.

When working with suppliers in emerging markets there is also the language barrier to consider. Does your chosen supplier speak any English or can someone in your organisation speak their language?

Check you are getting the best deal Emerging markets are developing at a fast pace, which means that their business environments are shifting continually.

For example, China was once the go-to country for cheap products; however, in

Supply chain

recent years labour costs have increased meaning it is not always the most competitive option, especially when compared to India.

Make sure you are assessing your suppliers and alternative options regularly so you know you are getting the best deal.

“When you first start trading with other nations, online marketplaces can be a good place to start”

Localise your offering While it is easy to group the BRICS nations together, it is important to remember that they are culturally very different, meaning offerings need to be localised.

Think about the products you are selling; is there an audience for them in all the BRICS countries or just one or two?

You also need to think about your packaging and marketing materials.

Different countries use different units of measurement and would expect different portions etc.

is not very well regulated, it is only recently that laws were passed saying all e-tailers must display official registration numbers, addresses and contact details.

In China, the government has no direct responsibility to ensure consumers’ personal information rights are adhered to when using ecommerce, instead the payment method is supposed to protect the consumer.

The legal system in India is closely aligned with that in the UK, making it easier to trade with than other nations in theory, although logistics can be a huge challenge in India.

Understand the culture you are working with When selling overseas, it is important to be respectful of different cultures.

Think about local customs and how you can adapt your products and business practices so they fit in.

Small changes can make all the difference. For example, in Brazil you should address customers by their title followed by their first name, while in India it is important to use formal titles or ‘sir’ or ‘madam’ when communicating with consumers.

Consider the legal framework Each of the BRICS nations has very different rules and regulations governing international trade. In Brazil, ecommerce

Make use of online marketplaces When you first start trading with other nations, online marketplaces can be a good place to start. They put you directly in touch with millions of potential customers, without you having to go to the trouble and expense of building a presence in the country you want to sell to.

[1] www.investopedia.com/terms/b/bric.asp

About the author James Hardy is Head of Europe at Alibaba.com, the global leader in e-commerce for small businesses. www.alibaba.com

BE Monthly

| 41

Energy alternati

Just before moving across to the Ministry of Tran shared with us her passion for weaning her countr alternatives: The record of the last four years ha Words by

42 |

BE Monthly

John O’Hanlon

Sustainability

ives in Africa

nsport, South Africa’s outgoing Minister of Energy ry off its addiction to coal and finding sustainable as been impressive but much remains to be done |

Research by

James Boyle BE Monthly

| 43

Sustainability

W

hen President Jacob Zuma appointed Elizabeth Dipuo Peters to the post of Energy Minister in 2009 one of the key performance areas he asked her to progress was getting greater private sector involvement in power generation.

She very quickly perceived that some of the best opportunities to achieve this lay in the renewable energy sector, so as a passionate believer in sustainable energy policies, she targeted the exciting emerging technologies and the companies that could help South Africa’s achieve its ambitious target to dramatically cut its reliance and generate 42 percent clean energy by 2020 and cut carbon emissions by a similar figure by 2025. “I saw an opportunity to use renewable energy as an instrument to bring in the independent power producers,” she says.

By 2011, the year South Africa hosted the international Climate Change Conference COP17, her ministry announced its target to obtain 3,725 MW of renewable energy in two bid rounds, called Window 1 and Window 2. “In Window 1 we managed to get 28 preferred bidders, I am happy to say, all of whom qualified for government financial incentives, and these are the companies building the first 28 plants.”

This, she says, will feed into the National Development Plan, South Africa’s blueprint for development over the next

20 years, which aims to create a low carbon economy by 2030.

A key factor in this strategy is the Integrated Resource Plan which sets out energy strategy from 2010 to 2030, which takes on board the 42 percent renewable power policy, she continues: “The biggest beneficiary of this 42 percent is photovoltaic (PV) solar and wind.

Concentrated solar power (CSP) accounts for a smaller proportion, and of the 17,800 MW renewable we are committed to installing by 2030 most will come from wind and PV solar.”

The original 28 bids, approved in November last year, will contribute 1,400 MW. To these have now been added a further 19 projects under the Window 2. They were given the go ahead in May 2013 and will contribute a further 1,200 MW of capacity. The present state of play, then, is that 47 private operators are now developing projects right across the country, to Mrs Peters’ great satisfaction and funded by the government to the turn of R75 billion ($7.6 billion). To this, she points out, should be added the national power generation company Eskom’s own 200MW renewable energy project, 50 percent generated from wind energy resources and the other 50 percent from CSP. Nearly half of current renewable power developments in the country in the country are located in the Northern Cape Province. Could that have something to do

“I saw an opportunity to use renewable energy as an instrument to bring in the independent power producers” 44 |

BE Monthly

The IDC is the biggest supporter of tenders awarded in the

Over the next five years, the IDC will make available R25 billion

Department of Energy’s Renewable Energy Independent

to fund projects related to green industries.

Power Producers (REIPP) programme.

The IDC is identifying and providing funding for many projects In the first round of REIPP tenders, the IDC participated in

that will contribute to building South Africa’s industrial capacity

twelve successful bids, and seven more in the second round.

and creating jobs. Visit www.idc.co.za to find out more.

The green energy bids include wind power, concentrated solar power, photovoltaic and small hydro projects.

Chillibush10174IDC

The power behind renewable energy

Telephone: 086 069 3888 Email: callcentre@idc.co.za To apply online for funding of R1 million or more go to www.idc.co.za

Sustainability

with the fact that Elizabeth Dipuo Peters is a former president of the province? She says it is more likely to be because this is the province with the highest direct normal irradiance (DNI), a measure of solar radiation. It is also home to the Northern Cape Solar Corridor, which includes proposed sites near Upington, Groblershoop, Prieska and De Aar. Working with organisations such as the South African National Energy Association, the South African Independent Power Producers Association and the South African Wind Energy Association and SANEDI, the South African National Energy Development Institute, the Department of Energy is working flat out to promote renewable energy, she says. However this has to be done within the context of other national priorities, she adds. “We have built into our procurement processes the need for localisation. We want as many of the components as possible to be made here.

That way the renewable programme will boost South Africa’s economic development and skills base.”

This is new and exciting technology, she points out, giving a unique opportunity to the country’s research and development community as well as growing employment. She is hopeful that a real partnership can develop between local and global manufacturers.

Another aspect of renewable power

generation that excites her lies in its potential social impact. “ At World Environment Day In June this year South Africa was invited to become part of a renewable energy club made up of ten committed countries. The Secretary General of the UN has identified renewable energy as one of those instruments that can actually unlock access particularly in parts of the world suffering from energy poverty.” As the German Environmental Minister Peter Altmaier said at the launch: “Renewable energy is not only a

“Renewable energy is not only a good way of combating climate change, it also contributes to prosperity and supply security throughout the world” BE Monthly

| 47

good way of combating climate change, it also contributes to prosperity and supply security throughout the world.”

For South Africa this could mean bringing the potential for renewable microgeneration into the mix, enthuses Mrs Peters. “In a move towards decentralised generation we are looking at incentivising neighbourhood and community groups to use either wind or solar to generate their own power and create their own energy distribution networks. This is one space we are very excited about!” Local projects also contribute to the 42 percent target, she points out. Even a small component of society like a municipality landfill gas programme can use waste to generate power; waste vegetable matter from a school can go into a biodigester to generate gas that can be used to heat that school.

Even at a household level there is huge potential, even if they can’t generate power at the grid level. In 2009 Peters announced a programme to install a million water heaters in homes and commercial buildings, and so great has been the uptake that this number is sure to rise. She particularly likes the fact that this initiative directly improves the lives of women, relieving them of the need to go out and collect wood for heating water.

In more densely populated areas there is a different approach. For example in

“I have visited many factories in South Africa that are manufacturing key components” 48 |

BE Monthly

Gauteng Province, her ministry is working with the Department of Public Works as well as the Department of Infrastructure Development of Gauteng to retrofit the government buildings to renewable energy (normally solar panels). We believe that would also add to energy efficiency as well as introducing renewable energy.

That is a double-barrelled type of project that is going to have dual benefits for us as a government and also as a country.”

Biomass is another way to produce green energy on a localised basis. Bagasse may be a new term to many people, but there’s a lot of it in southern Africa. It is the fibre that is left when sugar cane or guinea corn stalks have been crushed.

Nearly a third by weight of sugar cane ends up as bagasse, and despite its high moisture content it is very effective when combined with other forms of biomass such as timber shavings to generate electricity. Mrs Peters is keen to work with the producers in South Africa who between them produce nearly 20 million tonnes of sugar cane, as well as the timber and sugar cane industries of neighbouring countries like Mozambique and Swaziland.

Sustainability

If all these initiatives are co-ordinated and taken seriously demand on the national power grid could be lightened significantly. Street lighting, traffic lights, perimeter lights and security lighting are all examples of medium- to low-load areas that could be brought into sustainable local generation schemes – at the same time, she believes that encouraging this way of thinking could create the necessary critical mass to sustain local production of components and stimulate new industries and yet more employment. “I have visited many factories in South Africa that are manufacturing key components. They are even producing solar inverters that change DC from the PV panels to AC for the network. The geyser industry is also growing, as well as solar panel assembly.

Energy policy can be a catalyst for job creation: it has the potential to reduce poverty, especially energy poverty.”

As she mentioned before renewable energy is a job creator as well as an investment magnet. “We are told the number of jobs resulting from Windows 1 and 2 alone is around 13,000. In one small town in the Northern Cape one

“In the beginning the technology developers will have to make it possible for us to create the market” company now employs 500 people. For a small town that is massive. And it restores the dignity of those people.”

The stumbling block is the cost of the technology and she is determined to tackle that. Another spin out from COP17 was the South Africa Renewable Initiative (SARi), launched as an International Partnership by South Africa together with Denmark, Germany, Norway and the UK, and the European Investment Bank. SARi is a funding mechanism, she explains, that will help South Africa unlock its green growth potential through the funding of large-scale renewable developments. The goal is to help cut technology costs. “But we are also calling on the technology developers because they are mostly international players. If they believe in the future of renewable energy they should be prepared to do more than just drive returns on their own investment. If this technology grows more and becomes available, especially in developing countries, in the long run they will get enough returns; but in the beginning they will have to make it possible for us to create the market.”

The wind and sun, she says, come at no cost and are everyone’s birthright. It is in everyone’s interest to get the cost of converting these natural resources into usable energy.

BE Monthly

| 49

events

KPMG Global power and utilities conference 2013

27-28 November 2013 Hotel Adlon Kempinski, Berlin, Germany www.kpmg.com/powerconference The KPMG Global Power & Utilities Conference is KPMG’s premier event for CEOs, divisional heads and financial executives of the power and utilities sector presented by KPMG`s Global Energy and Natural Resources Practice.

The conference brings together 300 executives of power producers, developers, investors, regulators and other industry stakeholders (NGOs, Research Institutions etc.) from over 40 countries around the world in a series of interactive discussions.

Keynote Speakers Michael Andrew

Chairman, KPMG International

Alistair Buchanan

Chairman, KPMG’s Power & Utilities practice in the United Kingdom from 1st October 2013, Former Chief Executive Officer of OFGEM

Günther Oettinger

Member of the European Commission, Commissioner for Energy

Dr. Fatih Birol

Chief Economist, International Energy Agency (IEA)

50 |

BE Monthly

Denis Vladmirovich Fedorov

Head, Directorate for the Development of the Power Sector and Marketing in Power Generation, Gazprom and CEO, Gazprom Energoholding

Marcus Spickermann

Managing Director, car2go GmbH and Chief Financial Officer, Daimler Mobility Services GmbH

Dipl.-Kfm. Klaus Becker

Chief Executive Officer of KPMG in Germany

Thomas Piquemal

Group Senior Executive Vice President, Finance, EDF Group

Dr. John E. Parsons

Executive Director, the MIT Center for Energy and Environmental Policy Research

Paul van Son

Chief Executive Officer, Dii (Desert Energy Industrial Initiative)

Dates for your diary

Mining technology and operations summit 2013

18-19 November 2013 Rendezvous Hotel, Perth The Mining Technology & Operations Summit is the premium forum bringing elite buyers and sellers together. As an invitationonly event taking place behind closed doors, the summit offers senior mining executives and solution and service providers an intimate environment for a focused discussion of key new drivers shaping the mining industry.

Enviromine 2013 4-6 December 2013 Santiago, Chile

Mines and Money London 2013 1-5 December 2013 Business Design Centre, London

Mines and Money London attracts 260 mining companies and over 3,000 senior investment, finance and mining decision-makers for up to five days of networking, learning and deal-making.

Be at Mines and Mondy London this year to gain access to: • The widest selection of mining investment opportunities in Europe • The biggest gathering of qualified investment capital providers under one roof • A content-packed conference agenda filled with investment insights and capital raising ideas • An established event (its 11th year) renowned for its deal-sourcing potential Confirm your place at Europe’s largest mining investment and capital raising forum.

READER OFFER: Quote Promo code ML775BE to obtain your Business Excellence 10% discount.

The 3rd International Seminar on Environmental Issues in Mining. This seminar offers the chance to share our experiences in environmental management throughout the mining cycle and learn about new proposals and responses to the environmental challenges facing the mining industry today. It is an invitation open to representatives of mining companies, government agencies, academic institutions, engineering companies, consultant groups and research and innovation centres.

BE Monthly

| 51

Bigger is better The mineral wealth of Chuquicamata, now the world’s largest open-pit mine, has been known since prehispanic times. Today a massive underground expansion project is taking the asset into a new era of future prosperity

written by: Will Daynes research by: Candice Nice

52 | BE Monthly

Codelco - Chuquicamata Mine

BE Monthly | 53

Air extraction tunnel which is 11 meters in diameter

Codelco - Chuquicamata Mine

I

f you were to set out today from Chile’s capital city, Santiago, and head 1,650 kilometres north you would eventually come to what is the world’s largest open pit mine. Based 2,870 metres above sea level, the Chuquicamata Mine is without question one of the jewels in the crown of Codelco, the planet’s largest producer of copper.

In its possession Codelco holds approximately ten percent of the world’s total copper reserves, producing some 1.75 million tonnes of refined copper in 2012 alone. This massive amount of copper stems through the company’s seven mining divisions, one of which is Chuquicamata, which itself is responsible for producing around 366,000 tonnes of fine copper per annum.

Although mining at Chuquicamata commenced in 1910, its mining properties had been known for centuries by the prehispanic cultures present in the region.

Said properties continue to be exploited to this very day with Codelco currently embarking on a structural expansion of the site in order to mine the resources located under the last open pit at Chuquicamata.

This pit has successfully delivered wealth and prosperity to Chile for the better part of 100 years, and yet in its current state it will no longer be profitable by the end of this decade.

It is with that in mind that the company embarked on its plan to transform the world’s largest open-pit mine into an underground operation and one with a projected output rate of 140,000 tonnes per day.

“In recent years,” explains Sergio Bustamante, Project Director for Chuquicamata, “further explorations have

BE Monthly | 55

( ) 7 ;

SIMINE gearless drive systems for conveyors 2YHUODQG FRQYH\RU ZLWK JHDUOHVV GULYH V\VWHP FRPPLVVLRQHG DW FRSSHU PLQH LQ 3HUX VLHPHQV FRP PLQLQJ )RU WKH ILUVW WLPH D ODUJH VFDOH EHOW FRQYH\RU V\VWHP ZLWK JHDUOHVV GULYHV KDV EHHQ LQVWDOOHG RXWVLGH RI *HUPDQ\ )RU DQ RUGHU IURP WKH $XVWUDOLDQ PLQLQJ FRPSDQ\ ;VWUDWD &RSSHU 7K\VVHQ.UXSS VXSSOLHG WKH FRQYH\RU V\VWHP DQG 6LHPHQV WKH JHDUOHVV GULYH V\VWHP IRU WKH $QWDSDFFD\ FRSSHU PLQH LQ 3HUX :LWK D FRQYH\RU VSHHG RI PHWHUV SHU VHFRQG RQ D EHOW PLOOLPHWHUV ZLGH DSSUR[L PDWHO\ WRQV SHU KRXU RI FRSSHU RUH FDQ EH WUDQV SRUWHG RYHU D GLVWDQFH RI DERXW NLORPHWHUV IURP WKH PLQH WR WKH SURFHVVLQJ SODQW 7KH RQO\ FRPSDUDEOH FRQYH\RU GULYH V\VWHP LQ WKH ZRUOG ZDV LQVWDOOHG LQ ² DOVR E\ 6LHPHQV DQG 7K\VVHQ.UXSS SUHYLRXVO\ 2 . ² LQ WKH 3URVSHU +DQLHO FRDO PLQH RI 'HXWVFKH 6WHLQNRKOH $* LQ *HUPDQ\ DQG LV VWLOO LQ RSHUDWLRQ

7KH GULYH V\VWHP FRQVLVWV RI WZR ORZ VSHHG V\QFKURQRXV PRWRUV HDFK ZLWK D SRZHU UDWLQJ RI NLORZDWWV DQG WKH DVVRFLDWHG 6,1$0,&6 6/ F\FORFRQYHUWHUV FRQYHUWHU WUDQVIRUPHUV D FRQWDLQHUL]HG ( KRXVH DQG UHODWHG HOHFWULFDO HTXLSPHQW &RPSDUHG WR FRQYHQWLRQDO KLJK VSHHG PRWRU DQG JHDU XQLWV WKLV JHDUOHVV GULYH VROXWLRQ HQDEOHV WKH LQVWDOODWLRQ RI ODUJHU GULYHV LQFUHDVHV UHOLDELOLW\ DQG HIILFLHQF\ UHGXFHV PDLQWHQDQFH HIIRUW ² DQG GHOLYHUV PD[LPXP DYDLODELOLW\ 6LHPHQV· VFRSH RI VXSSO\ DOVR LQFOXGHG WKH HQWLUH VZLWFKJHDU DQG JHDUOHVV GULYH V\VWHPV IRU D IRRW 6$* PLOO DQG WZR IRRW EDOO PLOOV ZLWK DOO DVVRFLDWHG SRZHU VXSSO\ HTXLSPHQW

$QVZHUV IRU LQGXVWU\

Codelco - Chuquicamata Mine been made which have siemens confirmed that beneath Direct drives equipped with synchronous motors are the pit exist 4,200 million a proven drive solution. These gearless drive systems tonnes of resources.” are often found in steel rolling mills, but also in mining This figure translates applications, such as hoists and mills. into around 1,700 million Direct drives are now being increasingly used for belt tonnes of copper ore conveyors requiring high power.

Conveyor drives must be reliable and efficient – that’s why reserves and molybdenum ThyssenKrupp and Siemens partnered up to develop a simple (512 p p m), which drive solution with few components. The drive train consists represents over 60 percent only of the pulley, two bearings, the rotor and stator. of all mined resources The availability of the drive increases as a result of the low in the last 100 years. It number of components installed. has subsequently been Direct drives are more efficient and represent the best decided by the company choice for power ratings of several Megawatts. www.siemens.com/mining that exploiting the reserves through the construction of an underground mine, which will be one of the largest and most modern and efficient in the world, is the most economical option going forward.

Such a large undertaking, especially one that is unprecedented anywhere in the industry, obviously throws out its own technical challenges, all of which have been taken into account by the mine operators. The material handling system for example will be unique in that it will run entirely through belts, with the main strap

“The material handling system is unique in that it will run entirely through belts”

The access tunnel is approximately 7.5km long

BE Monthly | 57

The result of a joint venture Between ACCIONA Infrastructure, SA and Obras Subterrรกneas, SA. The Consortium ACCIONA-OSSA, SA is today a hugely important contributor to the Codelco Chuquicamata underground mine project PMCHS.

www.acciona-infraestructuras.es | www.ossaint.com

Codelco - Chuquicamata Mine

Entrance to tunnel number 12

ACCIONA-OSSA

ACCIONA-OSSA, SA brings over 100 years of experience in the construction industry with a philosophy of sustainable development and excellence in quality, technology and innovation, covering all aspects of our business, from engineering and design to implementation and maintenance.

The philosophy of global character ACCIONA-OSSA, SA considers the interests and needs of the customers and the company both locally and globally.

ACCIONA-OSSA, SA has all the necessary means to carry out innovative solutions to the most challenging projects, both small and large scale, located on any terrain and in any part of the world.

All operations are carried out according to environmental, social and economic ties with a global sustainability criteria and constant attention is paid towards improving construction processes, innovation and implementation of measures for environmental protection. www.acciona-infraestructuras.es www.ossaint.com

having two sections of approximately three kilometres of belt each.

Elsewhere, technical operations on the early stages of the mine’s structural design, which comprises of four levels of production, include the construction of a main access tunnel measuring 7.5 kilometres, a similar tunnel system that will be used to transport ore, five clean air injection ramps, two air extraction shafts and numerous other works.

Despite the obvious scale of the task at hand Bustamante and the company have a clear target in mind when it comes to the timescale for the expansion project. “Underground operations are due to commence from 2019.

360,000 Tonnes of fine copper produced by the mine per annum

BE Monthly | 59

Codelco - Chuquicamata Mine After that will be a ramp Sandvik up period that will take Sandvik Mining is a business area within the Sandvik about seven years to reach a Group and a leading global supplier of equipment and tools, production level of 140,000 service and technical solutions for the mining industry. The tonnes of ore per day which offering covers rock drilling, rock cutting, rock crushing, converts into 366,000 tonnes loading and hauling and materials handling. of fine copper a year.”

Every product is preceded by extensive R&D and backed with application expertise and a worldwide service network offering As the home of both the on-site service, training and round-the-clock support. largest open pit mine and We have a tradition of localization and conviction that there the biggest producer of can be no substitute for direct service and contact with copper in the world, it really our customers. Our service-oriented, organization is wellgoes without saying that developed and we have technicians located strategically Chile is a hugely important around the world. location when it comes to the www.sandvik.com health and future growth of the mining sector, not only in South America but on a global scale. It therefore stands perfectly to reason that the State of Chile assigns a great deal of important to the industry.

By breaking down the figure it becomes clear very quickly indeed how important Codelco’s operations are to the country and the wider region. In 2012 the state-owned company generated more than $7,500 million in income and since it was created in 1971 it has generated wealth equivalent to more than $100 billion. A sizeable percentage of this is in turn assigned by the state to areas Work platform for air extraction such as health, education, public services and

“In recent years further explorations have been made which have confirmed that beneath the pit exists 4,200 million tonnes of resources” BE Monthly | 61

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

Seen www.bus-ex.com

Codelco - Chuquicamata Mine infrastructure projects, all for the benefit of the Chilean Astaldi is a leading Italian general contractor with people, particularly those over 90 years of global experience. Its expertise is in classed as being the most the construction of large infrastructure projects in deprived. This makes the fact transportation, water and energy and civil and industrial that the industry is continuing building as well as concessions. Listed on the Italian to grow rapidly and robustly Stock Exchange since 2002, today Astaldi operates in 18 countries with close to 10,000 employees. Over the a hugely positive one, years Astaldi completed and delivered numerous iconic with a least five structural works in Europe, Central and South America, Africa and projects in different stages Asia. In 2012, Astaldi ranked among the first ten top global of development presently contractor in transportation and hydro-electric projects by underway under the Codelco Engineering News Record. banner alone. www.astaldi.com As well as supporting Chileans on a national scale, Codelco’s Chuquicamata mine has long been a vital source of support for the local Calama community. “Here,” Bustamante states, “the company has led a very important program called Calama Plus. Together with the support of various private companies the program centred on a voluntary citizens’ consultation, in which more than 20,000 residents participated, with the aim being to create a master plan to improve the standard of life in the community.”

Looking at future of the mine and its underground expansion, the biggest challenges for Codelco when it comes to

ASTALDI GROUP

2019 When underground operations at the mine are due to commence Jumbo rig working in the transport tunnel

BE Monthly | 63

Codelco - Chuquicamata Mine Building personnel separating different areas of construction

“The next five to ten years are arguably going to be this project’s most vital period of time” managing and constructing a mega-mining project valued at over $4,000 million will be to ensure that it continues to capture the enormous potential of the Chuquicamata site for many years to come, something that must be done within time and cost limits, and without serious accidents. This last point is critically important to the company as it has long placed emphasis on the fact that safety is its top priority and that it believes that there is no target it could reach that would ever justify placing its employees at risk.

“The next five to ten years are arguably going to be this project’s most vital period of time,” Bustamante concludes. “This is the period in which we are going to be building the project, and then it will be put into operation and subsequently we will advance with the productive scaling (ramp up). Our primary goal throughout will be to materialise a good project to benefit Chile and all the people of Chile.”

For more information about Codelco - Chuquicamata Mine visit: www.codelco.com

BE Monthly | 65

Prospering in Peru

66 | BE Monthly

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

written by: Will Daynes research by: Jeff Abbott

BE Monthly | 67

Underground mine decline rehabilitation

SRK Consulting - SVS Ingenieros

O

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

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

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

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

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

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

BE Monthly | 69

Mine tailings facility reclamation

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

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

70 | BE Monthly

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

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

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

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

SRK Consulting - SVS Ingenieros

Biological field work

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

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

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

Underwater geotechnical drilling

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

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

For more information about SRK Consulting - SVS Ingenieros visit: www.srk.com

BE Monthly | 71

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

written by: Will Daynes research by: Abi Abagun

72 | BE Monthly

Sociedad Minera El Brocal

BE Monthly | 73

Sociedad Minera El Brocal

P

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

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

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

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

BE Monthly | 75

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

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

78 | BE Monthly

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

Sociedad Minera El Brocal

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

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

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

As mining advances, the hauling distance to the

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

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

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

BE Monthly | 79

Sociedad Minera El Brocal

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

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

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

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

BE Monthly | 81

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

The result has been a long track record of

82 | BE Monthly

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

Sociedad Minera El Brocal

Power and productivity for a better worldTM

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

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

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

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

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

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

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

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

BE Monthly | 83

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

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

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

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

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

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

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

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

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

BE Monthly | 85

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

www.bus-ex.com/mining

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

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

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

CONTACTO CORREDORES DE SEGUROS

$420 million Investment made towards the Huaraucaca concentration plant upgrade

BE Monthly | 87

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

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

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

BE Monthly | 89

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

90 | BE Monthly

Cerrej贸n

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

research by: Richard Halfhide

BE Monthly | 91

Cerrejón

C

Once mining has ended, the area is rehabilitated

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

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

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

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

BE Monthly | 93

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” 94 | BE Monthly

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

BE Monthly | 95

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

96 | BE Monthly

Cerrejón

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

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

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

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

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

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

BE Monthly | 97

“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

98 | BE Monthly

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

BE Monthly | 99

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

100 | BE Monthly

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.

BE Monthly | 101

“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

102 | BE Monthly

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

104 | BE Monthly

Goldcorp Cerro Negro

BE Monthly | 105

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

BE Monthly | 107

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.

Regional Vision Extensive network of world-class services.

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

BE Monthly | 109

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

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

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

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

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

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

Goldcorp Cerro Negro

Eureka Camp

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

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

1,600 tdp

BE Monthly | 111

Reduce and manage your risks with Entropy

TM

BSI’s Entropy provides a powerful management solution that significantly reduces the cost and effort needed to proactively manage risk, performance and sustainability activities.

BSI not only provides you with a web-based solution for your management systems, we also provide training and assessment services in standards such as ISO 9001, ISO 14001, OHSAS 18001, among others.

For further information please visit bsigroup.com.mx, call +52 (55) 5241 1370 (MĂŠxico) or email informacion.msmexico@bsigroup.com

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

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

BSI

500,000 ounces

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

BE Monthly | 113

“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

114 | BE Monthly

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

BE Monthly | 115

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.

www.tronador1.com

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

With more than 30 years of experience, Modular Homes SRL manufactures high quality modular buildings for the mining and energy industries.

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

BE Monthly | 117

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

BE Monthly | 119

Preview:

120 | BE Monthly

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

BE Monthly | 121

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

BE Monthly | 123

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

BE Monthly | 125

126 | BE Monthly

Walter Energy

Getting better all the time Walter Energy Canada’s continuous improvement initiatives, are implemented in its metallurgical coal mines, is helping the company navigate difficult market conditions

written by: John O’Hanlon research by: Peter Rowlston

BE Monthly | 127

A

s reported last year, just a year in from its $3.3 billion purchase of Western Coal, Walter Energy had succeeded in dramatically increasing the output of the three Canadian mines.

Wolverine, Willow Creek and Brule located near the towns of Tumbler Ridge and Chetwynd have all seen further rationalisation and improvement in the intervening year.

Dan Cartwright, president of Walter Energy’s Canadian operations, though his brow may be knitted over global coal prices and a market over which he can have little influence, has plenty to be pleased about.

Let’s start with the big one. Some really significant improvements in safety have been achieved over the last twelve months. “We have seen a rapid drop in the rate of reportable incidents at all three of our operations,” says Cartwright. “At the Wolverine mine for example, in September we celebrated a full year without a lost-time incident (LTI) for the first time in the facility’s history.” At the newer Brule mine too, a year has nearly passed with no reportable incidents at all, something that rarely happens in the endemically hazardous coal mining industry. “We are particularly proud of the Brule team and the results they have achieved,” he adds.

These things don’t happen by luck – it takes the efforts of the entire team, he stresses. The approach of Walter Energy is to breakdown every activity and analyse it step by step. Safe Job Procedures have been developed for the majority of tasks within the company. You can’t hope to finish this process because jobs change and new jobs arise: this is part of a

128 | BE Monthly

Walter Energy

Cheryl Franklin, Brule Training Coordinator

THE DUZ CHO GROUP OF COMPANIES Working together with other First Nations, Federal and Provincial Governments, industry and the communities in the areas in which they operate has been the hallmark of the Duz Cho group of companies. The companies provide a wide range of services to the mining, oil and gas, wind energy, and forest industries and are well recognized for their professional conduct.

The McLeod Lake Indian Band, the sole owner of the Duz Cho companies, is as innovative and progressive an Indian Band as you will find anywhere in All of the Duz Cho companies are presently North America. coming together under what will be known Much of this as the Duz Cho Group of Companies. credit must go to This includes Duz Cho Construction Ltd., their chief, Derek Duz Cho Logging Ltd., Mackenzie Wood Orr. He is young Processing, and a new joint venture-and vibrant and Northern Indigenous Crane. The Duz Cho knows very well what it takes to ensure a companies have earned the respect of future that is filled with opportunity for his both industry and government and are band members. Chief Orr has a vision for recognized as an organization that is his people. This includes development of approachable and open for business. The the natural resources we are all so blessed quality of the work performed by these with, while at the same time ensuring companies, as well as their understanding of that the footprint we leave on the land the need to be competitive in their pricing, base is minimized by adhering to sound has made them a company that industry environmental management of our land, looks to when a job needs to be done on air, and water. time and on budget.

The Duz Cho companies are led by Jim and Although time and cost effectiveness is a Al Humphreys who have both helped turn cornerstone of what has earned the Duz these companies into the successes that Cho Group of Companies their reputation, they are. The key reason for their success is it is the safety of their workers and other teamwork and Jim and Al have built a team workers on the job sites that is their that is not only extremely competent but first priority. Duz Cho’s safety record is each one is focused on the success of the something the entire team is very proud of companies that they are part of. and is what drives each and every job to its successful completion. www.duzcho.com

Walter Energy

Walter Energy Brule haul truck

culture of continuous improvement that by how those hazards can be mitigated. This definition is never-ending. information is shared with the supervisor.

The company is going the extra mile Nevertheless the process has had a great bearing on the success achieved. “We have in terms of personal protection too. High established a safety contact policy that visibility reflective clothing is now a requires each supervisor to make a certain requirement, and passing beyond industry number of safety contacts each week.� This safety standards employees are now required involves observing the person to wear metatarsal boots. This at work then taking time is being augmented currently by the issuing of metacarpal with them to compliment gloves – between them these work done well, challenge two initiatives will go a long where it could be better and discuss their individual way to protecting those risk evaluation. Before they vulnerable extremities. start any task, individuals Toes and fingers are the most commonly injured parts are asked to do their own Cost of Western of the body. It is important, inspections, walk around, Coal acquisition says Cartwright to address and note any hazards and

$3.3

Billion

BE Monthly | 133

“Our results show in our operations one of the most dramatic cost transitions that I have been associated with in my entire career” the ‘routine’ hazards as well as the more infrequent but perhaps more serious ones.

“We want to eliminate the cuts and bruises while not losing sight of the bigger picture. So we ask employees the question: ‘If you were away from work and heard there had been a fatality at the mine, what would you suspect?’

In other words, what would be the first thing that would come to mind without knowing the facts of the case?” Gut feelings are not always

134 | BE Monthly

expressed but can provide valuable insight that could save a life, he acknowledges.

The Canadian mines all started out being mined by mining contractors. That made sense for Western, a relatively new company, but Walter Energy’s policy is to bring what is after all its core activity in-house. The last of the Canadian mines to be shifted from contract to company mining was Brule, which has a production capacity of around

Walter Energy

Brule mine LeTourneau loader

two million tonnes per annum (tpa). The operation involves two big elements: people and equipment. The mining equipment had to be purchased from the contractor but the personnel could not be transferred so easily.

Most of the management and a large proportion of the supervisory staff left, quite understandably, for reasons connected with continuity of employment and the fact that most of them were not locals, having been flown or driven to the remote site. “In some ways it was a bit like starting up a new operation, particularly from a personnel point of view,” says Dan Cartwright. “We didn’t want anybody to stay who didn’t want to be there. Part of the challenge at Brule is that it is our most remote mine. But it gave us the opportunity to convert to a more local workforce. We still have quite a

few drive ins though there are no longer many people who fly in.”

Cost management, productivity and safety ideally go hand in hand. In the current climate, with coal prices well below where they need to be to sustain the higher cost operations, Walter Energy has been stepping up its program of cost reduction. One initiative that has been extended in the last year is its reliability centred maintenance, condition-based program.

Reliability-centered maintenance (RCM) and condition-based maintenance practices can extend the duration between routine maintenance, improve unit availability, and eliminate some forced outages, he explains.

“We also do sophisticated diagnostics and condition-based monitoring to determine the ‘health’ of key machines and to make sure that

BE Monthly | 135

Walter Energy

CANADIAN NATIONAL RAILWAY CO CN is a true backbone of the economy, with access to over 75% of the North American population, we transport C$250B worth of goods annually. A key driver of our business is Western Canadian coal. We have been partners with Walter Energy since day one; collaborating and innovating together to form a fluid supply chain.

Whether customers are shipping domestically or internationally, we are there to help them win in their market, wherever it may be. CN provides rail access to Walter Energy’s U.S. destinations, given that our network extends to three coasts.

With nearly 20% of Canada’s exports moving over our rail network, CN has also given Walter Energy worldwide reach. We have been able to supply them with direct rail access to two West Coast ports and three bulk terminals, including Ridley at Prince Rupert, the closest port to Asia.

One thing that CN and Walter Energy definitely have in common is the understanding that supply chain partnerships are just that,

partnerships. We work together to balance and align capacity, improving the coal supply chain from mine to mill. We have expanded our capabilities to synchronize our growth with the growth that our customers, as well as the ports, are planning.

This collaboration is based on continuous communication. We have a bulk logistics team that is engaged with our customers, connecting with them on a daily basis. With this visibility and in-depth understanding of our customer’s business, we can remain nimble and adapt to their needs.

We have a solid supply chain with Walter Energy, one where we share the same goals and work hard every day to keep getting better and gain efficiencies. CN is proud both to be their partner, and to be able to play a key role in keeping Canada at the forefront of the global economy. www.cn.ca

BE Monthly | 137

ELECTRICAL CONTRACTORS

Customer focused and result driven Lakewood Electric Ltd. is a customer focused, results driven Canadian Electrical/Instrumentation contractor.

The Company encompasses the full scope of electrical, instrumentation, power and control, project design, and turn-key installations from coast to coast in the following industries:

• Mining • Oil and Gas • Pulp and Paper • Chemical • Instrumentation • High Voltage Power Distribution • Fiber Optics/Data Networking

www.lakewoodelectric.ca

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

www.bus-ex.com/mining

138 | BE Monthly

we are listening when the machine is telling us work is due.”

As an example, oil changes are no longer just time based. OEMs and agents tend to stay on the safe side when specifying maintenance schedules, but components and fluids can often work far longer before needing to be replaced. Using things like vibration analysis and thermography the condition of the machine can be monitored very closely. The machine rather than just the manual will decide when it needs help!

There was a lot of room for improvement when he took over the job 18 months ago, he admits, but that slack has been taken up.

“Our results show in our operations one of the most dramatic cost transitions that I have been associated with in my entire career. We have

Walter Energy

Brule mine shovel loading haul truck

seen reductions in cost that range between 20 and 50 percent.” But make no mistake, this has been achieved primarily by the application of common sense on the part of the people who actually have to implement it, he insists. “It is our people who make us what we are.”

While emphasising the role of teamwork in safety, productivity, maintenance and lean working, he does not forget those team members who don’t work for Walter. “One of the things we have been doing is to reach out to our partners in the supply and delivery

chain to see how we can work together better.”

He singles out the Caterpillar dealer Finning, which has been working with Walter to make the RCM work, optimise performance and at the same time preserve its reputation by avoiding equipment failure. “The leadership of Finning in British Columbia has done a really good job in working with and helping us. I believe that our success will be their success in the long run and they recognise that.”

Mines and railroads are sometimes viewed as natural enemies and there’s no doubt a

“The leadership of Finning in British Columbia has done a really good job in working with and helping us” BE Monthly | 139

Walter Energy Brule Pit

Walter Energy coal mine can be a demanding customer for a railroad. There is tension between the mine’s need to have trains ready to take loads whenever the mine is ready and the rail operator’s need to not have trains waiting. But this can be overcome by better communication and Canadian National Railway (CN) and Walter’s transportation group have done a great job in sharing information. “Both sides are now kept informed so they know our mining plans and we know their plans and commitments too.”

He says. “It has turned a good relationship into an exemplary relationship!”

In the end, the steelmakers of Korea and Japan who take most of the BC coking and PCI coal do have other sources to turn to so, the mining companies, the logistics operators and the ports of western Canada need to sell themselves as a united supply chain. The good news is that the railroads and port authorities have been responding to this situation. Westshore, Neptune and Ridley Terminals have recently seen over $1 billion invested in improvements to the efficiency and capacity of their terminals.

This includes the addition of more than 20 million tonnes in coal handling capacity.

Of all the commodities carried by rail and handled by ports in Canada, coal ranks number one, and an efficient and inter-connected network of rail and port infrastructure is critical to get Canadian coal to market, Dan Cartwright believes.

For more information about Walter Energy visit: www.walterenergy.com

BE Monthly | 141

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

142 | BE Monthly

New Millennium Iron Corp. (NML)

BE Monthly | 143

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

BE Monthly | 145

BRASS Engineering International

Leading Edge Technology for Pipeline Systems

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.

Engineering and Design: long distance pipeline transport systems Water Management Pre-commissioning Operations Support Services

Concentrate Slurry

Tailings and Water Recovery

Engineering and Design of Filter Plant & Terminal Construction Management Commissioning and Startup Maintenance Support Services

Oil Products and Gas

Desalinated Seawater & Seawater`

Brass Engineering International

San Ramon, CA, USA

1-925-867-1000

www.BRASSEngineering.com

Brass Chile S.A.

Santiago, Chile

5-622-726-7100

www.BRASS.cl

Brass do Brasil Projetos de Engenharia Ltda. Belo Horizonte, MG, Brazil

55-313-779-0108

www.BRASSBrazil .com

Brass (Beijing) Pipeline Technologies

Beijing, Beijing, PRC

86-106-295-9380

www.BRASSChina.cn

Brass (Philippines) Technologies, Inc.

Quezon City, Phillippines

632-376-9431

www.BRASSPhilippines .com

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

BE Monthly | 147

We are proud to be patners in the New Millenium mining project

• Longlining capacity up to 3100lbs • Heli-Boreal provides helicopter support for remote area access, crew transpotation, geophysical exploration, mining and drill rigs etc...

We operate ASTAR 350 BA / B2 / B3 + EC120 279, boul Vigneault, Po. Box 3, Sept-Iles, Qc, Canada G4R 4K3 Tel: 418 962-7256 | Fax: 418 962-7250 Cell: 418 961-5559 | Email: carol.soucy@heli-boreal.ca

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

www.bus-ex.com/mining

148 | BE Monthly

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,

“NML’s rapid rate of growth is expected to continue to accelerate as it works to meet its own strategic goals” BE Monthly | 149

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

150 | BE Monthly

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

BE Monthly | 151

A cut above the rest Even in the face of challenging market conditions the sheer quality and unmatched excellence of Eurostar Diamond Traders products mean that it remains a leading global force in the diamond sector

written by: Will Daynes research by: James Boyle

152 | BE Monthly

Eurostar Diamond Traders

Polishing the pavilion facets

Eurostar Diamond Traders

T

he diamond industry has been on something of a rollercoaster ride since the global financial crisis of 2008, with prices plummeting in 2008 and 2009, before rebounding to reach historically high levels in 2010 and 2011. This pattern of extremes was replicated in 2012, with retail sales of diamonds growing 1.8 percent from 2011 to $72.1 billion at the same time that overall prices for rough and polished diamonds declined by 14 percent and 13 percent respectively.

Reassuringly, given that we are fast approaching the November/December period that is traditionally the healthiest for diamond retailers in any given year, the market has shown signs of continued improvement during the first half of 2013.

“The main positive we can take from this year so far is that we have seen business levels remain slightly higher than those recorded in 2012,” explains Kaushik K. Mehta, Chairman of the Eurostar Group.

“The real litmus test for the sector will come during the pre-Christmas months which are typically the busiest on our calendar.”

Mehta has been at the helm of Eurostar Diamond Traders ever since he founded the business as a diamond processing plant in Belgium back in 1978. In the 35 years since he has witnessed all manner of economic events and successfully guided his company through both good times and periods of uncertainty. As such you would be unlikely to find a business in this field of industry better prepared for what the next couple of months hold.

“We have already undertaken the work

BE Monthly | 155

$72.1 Billion Global diamond retail sales in 2012

Facetting

156 | BE Monthly

necessary to set ourselves out for the busy period that will be upon us shortly and for the sudden increase in consumer demand that we have come to expect,” Mehta states. “The Christmas buying season has always proven to be one of the most crucial times for us, if not the most crucial, and because of this we prepare many weeks in advance to ensure that our inventory levels and processes are up to scratch, thus making us perfectly positioned to satisfy consumer demand.”

As one of the world’s leading diamond wholesalers and manufacturers, it is Eurostar Diamond Traders’ expressed aim to help in shaping and leading the global diamond market. In order to do so it has expanded its own operations into some of the most important regions for diamond sales, namely the United States, China and India, and this fact continues to reap considerable benefits to this day.

Indeed, looking at the market ’s performance over the first half of this year, some of the most encouraging trends have originated from the US, Japan, China and India, with sales in the first two rising particularly strongly on the back of accelerating GDP growth, a trend that looks poised to continue during the remainder of 2013.

Eurostar Diamond Traders

Every Eurostar diamond undergoes 32 meticulous quality checks before reaching your doorstep

“While demand from key markets across Europe has slowed compared to that of previous years, this has been supplemented by the increase in demand we have been receiving from the US, China and India,” Mehta continues. “It is these parts of the world that we expect will go on to be the

driving force behind our sales throughout November and December.”

The emergence of China and India as important growth centres for Eurostar Diamond Traders and the diamond market as a whole is an event that has taken on even greater significance in the last five years or

“The Christmas season has always been one of the most crucial times for us and we prepare many weeks in advance” BE Monthly | 157

“The emergence of China and India as important growth centres for Eurostar Diamond Traders has taken on even greater significance in the last five years” so, and Mehta has a pretty good explanation for this. “Higher average incomes in these countries certainly seem to be one of the main factors driving demand,” he says. “Higher incomes have resulted in growing middle

158 | BE Monthly

class populations and it is these people who are now being able to demand a better quality product when it comes to the diamonds they purchase compared to those which they were able to afford previously.”

Eurostar Diamond Traders

Marked rough diamonds, ready for sawing

Fortunately for Eurostar Diamond Traders, the foresight of its management and owner has enabled it to be extremely well geared towards the growth it is experiencing in these developing nations, as well as in the US which remains a vital marketplace in its own right. Today it retains a strong presence in these markets with offices in New York City, Shanghai, Hong Kong and Mumbai respectively.

While Eurostar Diamond Traders’ peerless commitment to quality products and service has enabled it to retain what Mehta refers

to as its ‘bread and butter business’, the fact remains that growth across the greater part of the world has come to something of a standstill. This makes attracting new business the biggest challenge facing companies in the diamond market today.

“From an infrastructure and business model standpoint we are confident we have the tools in front of us to overcome such difficulties,” Mehta highlights. “In addition to the hugely important sales and marketing centres that we have in places like China and the US we also have a number of teams made

BE Monthly | 159

“What is as true about the company now as it has always been ... is the fact that it has never lost sight of the need to continually improve from within�

Sawing quality control

160 | BE Monthly

Eurostar Diamond Traders up of highly experience professionals whose job it is to remain in direct contact with all of our key retailers.

This allows our brand to maintain a sizeable presence in our core markets, thus we are able to retain our existing business while also making every effort to attract new growth as and when it appears.”

What is as true about the company now as it has always been, even during those first years following the economic crisis when the diamond market suffered Sorting rough diamonds greatly, is the fact that it has never lost sight of the need “The diamond market to continually improve from of today is very much within. This has meant that a fragmented one,” he investment has continued to concludes. “The reality is that be poured into its facilities there are too many players and polishing centres to at present and I believe that The year that Kaushik K. Mehta founded the ensure that they follow in the long run this number company will diminish, especially if the latest international economic conditions remain s t a nda r d s a nd are much as they are at present. adequately equipped with innovative, state-of-the-art technologies.

This will leave behind a scenario where only If diamond market data from the last the very best players are left and we will five years has highlighted anything it is continue to do our very best to prove that we the unpredictable nature of the business remain one of these players.” in what are uncertain economic times. In spite of this Mehta does have a theory as For more information about to how the market, and as such Eurostar Eurostar Diamond Traders visit: Diamond Traders, will evolve in the shortwww.eurostardiamond.com to-medium term.

1978

BE Monthly | 161

Tanzania’s most pro

In 2012, the Geita Gold Mine (GGM) became one of AngloGold Ash production centres and cash generating assets. Managing Director, Anen, talks about how the company intends to further build upon

written by: Will Daynes research by: Candice Nice

162 | BE Monthly

AngloGold Ashanti - Geita Gold Mine (GGM)

oductive mine

hanti’s largest r, Michael Van n its success

BE Monthly | 163

AngloGold Ashanti - Geita Gold Mine (GGM)

S

Engineers carrying out general maintenance

ince the early 1990s, the use of modern technology and refined models has seen gold exploration in Tanzania grow rapidly, in turn transforming the country into one of the fastest-emerging gold producers in Africa, behind only South Africa and Ghana. Yet despite the relatively recent expansion of the sector, the presence of gold beneath Tanzania has been known about since it was first discovered in the Geita region in the late 1800s.

Today, the region is home to the Geita gold deposit, located 20 kilometres south east of Nungwe Bay on Lake Victoria, at an elevation of approximately 1200 meters above sea level. Geita Gold Mine (GGM) commenced production in 2000, initially as a joint venture between South Africa’s AngloGold Ltd and Ghana’s Ashanti before the two companies merged in 2004.

An open cast mine with three pits, GGM has been the recipient of approximately US$600 million in investment from AngloGold Ashanti since 2000, while the mine has paid some US$683 million in direct contributions to the Tanzanian government through taxes and royalties in the same time period.

“AngloGold Ashanti is immensely proud that Geita Gold Mine is currently Tanzania’s most productive mine,” states Managing Director, Michael Van Anen. “Four years ago, GGM underwent a focussed turnaround and in 2012 became AngloGold Ashanti’s largest production centre and cash generator.

Presently, Geita produces about one third of the total ounces of gold from our African production, excluding South Africa, and

BE Monthly | 165

Tel:+255 28 2540790 | Cell: +255 784 223 007 Email: princeco@thenet.co.tz www.princeco.co.tz

Princeco Ltd. is a Tanzanian registered company based in Mwanza, Tanzania. It started its operations in September 2005 as a Procurement and Trading company to cater the growing needs of the approaching gold & oil / gas investors in the country. Princeco selects sources and delivers products and services for the mining, fishing, and the overall corporate sector. Today it has a product range of over 350 items and more than 30 corporate customers. We are dealers & stockist for Welding Equipments, Abrasives, Personal Protective Equipments,

Workwear & Rainwear, Geological & Survey Items, Visibility Products, Fire Equipments, Filters and General Procurement. We have dealership for Lincoln Welding, 3M, ‘Steelblue/Howler/Krusher’ Australian Boots, ‘Dy-Mark’ Mine Marking, ‘Wild Africa’ Workwear, ‘Precious Earth’ Geology & Survey items, ‘Fleetguard’ filters, ‘Norton’ Abrasives. If you are a foreign company looking to invest in Tanzania in the Mining Sector & looking for a local partner do contact us.

KARIBU SANA! TUJENGE NCHI TANZANIA – HAKUNA MATATA!

Wild Africa

WORKWEAR

NEW PRECIOUS RESOURCE DISCOVERED

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

AngloGold Ashanti - Geita Gold Mine (GGM) is one of our largest mines in Africa. It therefore goes Princeco is always adding new products to its product list without saying that we are to make sure the mining industries and oil & gas industries very proud of our investment are served in this country to the best of Tanzania’s ability at Geita and in Tanzania.” so that we preserve its opportunities within the country. We In making its ambitions are proud to say we have grown and developed our supplies in the country a reality, and services to Mining Industries with the knowledge and support from the foreign investors to an international level. the company has worked We work with world renowned mines like Barrick Gold Mine, tirelessly to ensure that it AngloGold Ashanti Mine, Xstrata Nickel and etc. If you are a maintains productive and foreign company looking to invest in Tanzania in the Mining fruitful relations with all of Sector and looking for a local partner do contact us. its stakeholders in Tanzania. www.princeco.co.tz Part of this work has involved helping to strengthen the capacity of all stakeholders involved and interested in extractive industries to build a shared understanding of the challenges and opportunities presented by the extractive sector for Tanzania’s long-term development.

Despite the obvious success that the company has had with GGM, it continues to push this further forward and at present has three key growth projects that it is continuing to explore, these involving underground extensions, surface extensions to already open pits and a refractory ore project.

“Each of the above projects is designed

Princeco

$4.8

Million (US) Invested by the company into community development projects Haul truck

BE Monthly | 167

to build upon GGM’s current strong performance and invest in its future as a mine,” Van Anen continues. “Geita is an important mine for AngloGold Ashanti, Tanzania and the local Geita community and as such we will work to ensure that remains the case for a long time to come. In Tanzania, we have successfully turned around the business over the last three years, with a 30 percent improvement in productivity and throughput improvements that had provided us with a more robust margin.”

In addition to these projects, the company also has exploration tenements surrounding its Special Mining License at Geita. This means that should an appropriate opportunity with sufficient economic potential be identified in the future, AngloGold Ashanti has the option to apply for a separate license to mine and realise the potential of said opportunities.

AngloGold Ashanti is committed to fulfilling its obligations and duties as a responsible corporate citizen across the entirety of its operations, and its belief in the importance of the concept of sustainability clearly extends through to its activities at GGM. It was as recently as August 2013 that GGM was named the winner of eight awards from the Tanzanian Presidential

Award on the Extractive Industry Corporate Social Responsibility and Empowerment Programme (CSRE) for its commitment to communit y investments. These awards were bestowed on the company as recognition of its health, education,

“The mine has paid some US$683 million in direct contributions to the Tanzanian government through taxes and royalties since 2000” 168 | BE Monthly

AngloGold Ashanti - Geita Gold Mine (GGM)

Aerial view of the mining operations

procurement, and water programmes for its host communities in Tanzania.

As GGM continues to gain ground in its own right, so too are many of AngloGold Ashanti’s current community empowerment projects. These include the Geita Town Water Project Implementation, which has seen the company invest US$4.9 million towards the implementation of a water supply system in partnership with the Tanzanian government.

The establishing of a clean water supply will ultimately benefit some 130,000 residents located around Geita.

Another US$5 million investment from

GGM has gone into the construction of the Nyankumbu Girls Secondary School, the final stage of which began in July 2013. This stage includes the construction of the remaining batch of teachers’ housing, school fence, sports fields and purchase of laboratory equipment. The overall project is expected to be completed by the end of March 2014, after which more than 900 girls will have access to a science-focused boarding school, the only one of its kind in the Geita region.

Meanwhile, a joint venture with the Geita local government authority, and other parties, has successfully implemented an

BE Monthly | 169

“AngloGold Ashanti is immensely proud that Geita Gold Mine is currently Tanzania’s most productive mine”

The open pit at Geita

170 | BE Monthly

AngloGold Ashanti - Geita Gold Mine (GGM) integrated malaria control program in Geita. The Geita Malaria Prevention program, which covers approximately 19 villages annually, focuses on carrying out indoor residual spraying within the community and was responsible for offering this prevention to more than 90 percent of the target population. Furthermore, from an environmental perspective, GGM is understandably proud to have maintained ISO 14001 certification, which will remain valid until June 2016.

“In addition to the work we carry out on behalf of local communities,” Van Anen highlights, “we are also a significant taxpayer in Tanzania, making US$213.8 in tax payments last year alone. This represents the second highest tax contribution across our global portfolio, and second only to South Africa where we have a much larger operating base. In addition to our tax remittances in Tanzania last year, AngloGold Ashanti provided a direct income and benefits to about 3,600 people and thousands more indirectly, and invested US$4.8 million in community development projects. We believe we contribute a great deal towards national development goals through our direct contribution to government and through our community investments.”

As Van Anen goes on to conclude, AngloGold Ashanti is committed to building on this

success by continuing to explore efficiencies and further opportunities to ensure that Geita’s future remains bright. “Crucial to our success going forward will, of course, be the support of our host communities. GGM is currently rolling out an enhanced engagement strategy, involving the surrounding communities and creating awareness of our mining processes and activities. We believe this will enhance public knowledge and understanding of the industry and strengthen the all so important stakeholder relationships which currently exist.”

For more information about AngloGold Ashanti - Geita Gold Mine (GGM) visit: www.anglogoldashanti.com

BE Monthly | 171

A land of opp

Monica Gichuhi, Chief Executive Offi (KCM), discusses how the country is Africa one of the most exciting new

written by: Will Daynes | r 172 | BE Monthly

The Kenya Chamber of Mines (KCM)

pportunity

ficer of the Kenya Chamber of Mines s playing a vital role in making East w frontiers for mining on the planet

research by: David Brogan BE Monthly | 173

The Kenya Chamber of Mines (KCM)

I

t is fair to say that until recently Kenya and all service providers that wanted to was not generally renowned for being become involved with mining. This has led a destination for mining investment. to a situation where today we have gone from However now, with the world’s eyes having a membership portfolio that was once focused firmly on Africa as an epicentre home to exploration companies and mine for mining activities, Kenya is emerging as operators, to one that caters for those in the a location of particular interest in the wake legal, financial, consultation and equipment of developments that have proven that supply fields. This in turn has helped the country does indeed hold significant bring added value to the aforementioned mineral-based potential. explorers and operators, as well as any With the industry taking on ever greater foreign owned entities looking to enter the significance and the country receiving more marketplace, as they now have direct access and more interest from international investors, to a list of all manner of service providers that the creation of a dedicated can cater for their needs.”

Proof of the rapid Chamber of Mines became development of the mining a necessity. “The Kenya sector in Kenya can be seen Chamber of Mines (KCM) throughout the country, from was established in the year the major breakthroughs 2000,” explains Chief The year that KCM being made at the Kwale Executive Officer, Monica was established Mineral Sands Project to the Gichuhi, “with its key purchasing of licences by mandate being to act as a representative for the private sector companies the likes of Barrick Gold in the last year, an operating in Kenya’s mining sector.” event which marked the entry of one of the At first KCM existed mainly as a lobbying best known global players into the country. body, pushing for more favourable working Such events have also resulted in an influx conditions for miners and private stakeholders. of junior miners coming into Kenya seeking However, in line with the growth in their own opportunities.

These developments have clearly not prominence of the sector, the Chamber’s role has continued to evolve to take on a gone unnoticed and have helped lead to the number of core roles including the marketing Kenyan government establishing a dedicated of the industry locally and internationally Ministry of Mining for the first time in its to promote investment opportunities, history. “In the past mining had always been drive awareness of the industry amongst banded together in government with other local communities and be a source of natural resources or as part of environmental information for its members. discussions,” Ms Gichuhi states. “It is of huge “Over time,” Ms Gichuhi continues, “we significance therefore that it now has its own began opening up our membership to any docket within government, something which

2000

BE Monthly | 175

The Kenya Chamber of Mines (KCM)

“Kenya is emerging as a location of particular interest having proven that the country does indeed hold significant mineral-based potential” very clearly highlights the confidence it has in the positive benefits the industry can bring to Kenya in the future.”

What is happening within government does not mean however that the role of KCM has diminished in any way. In fact it is perhaps more important now than ever before that the Chamber maintains the pressure it places on the powers that be to ensure that the proper legislation and regulations are in place to

properly support the growth of mining and attract investment.

In addition to its lobbying for the legislation reform process to be speeded up and for the introduction of better tax conditions for the industry, a topic that is high on the Chamber’s agenda at present is the gathering of comprehensive geological data for the whole of Kenya, an act that will prove invaluable when it comes to attracting

BE Monthly | 177

POWERING AFRICAN MINING For a mining operation to be viable, a number of factors must be in place. Sustained demand for the commodity, a market price that offers profitability, once extraction, refining and transportation costs are subtracted and a licence to operate are three such factors.

Access to a robust, high-quality power supply is another. Without reliable power, mines simply cannot operate.

Traditionally mine power has been supplied from accessing the local power grid or through independent power plants owned and operated by mining companies. Typically when relying on grid power, a fleet of back-up generators are also located on site to step in when grid power goes down.

Another option for powering mines that is becoming increasingly popular is the rental of power plants for either primary or backup power. Mining companies are starting to recognise the clear benefits of outsourcing this vital, yet non-core activity to specialised suppliers. Rental power offers flexibility in capacity and avoids tying up large amounts of capital in the purchase and maintenance of power infrastructure. Further, it allows miners to concentrate on what they do best, while leaving the supply of power in the hands of dedicated power experts.

“Over the course of a mine’s lifespan, power demands will increase incrementally and then decrease as the mine is scaled back,” commented Charly Wittgenstein, Area Sales Manager, Aggreko East Africa. “By renting power, miners can opt for exactly the power capacity they need and then grow or decrease this as and when required. This avoids the

costly situation of having either unused or redundant capacity or potentially worse, an insufficient power supply.”

Aggreko is the world’s leading supplier of rental power to mining operations across the globe. From providing small generators to power initial exploration camps to powering entire mining operations with multi-megawatt power plants, Aggreko is recognised as the industry leader. With a network of eight depots across Africa, supported by regional hubs in Europe and the Middle East, Aggreko has the unique ability to service practically any power requirement, in any geography across Africa.

“From our depot in Nairobi we can rapidly mobilise fleet to support our customers when emergency situations arise,” continued Wittgenstein. “Yet we also have the capacity and proven experience to supply large–scale and longer term power installations. Aggreko are an excellent partner for mining companies as we can support them at each and every stage of their operations.”

Aggreko supplies temporary power and temperature control solutions across Africa and throughout the world to a wide array of heavy industries, government utilities and to international major events. With a local African depot network encompassing Nairobi, Johannesburg, Port Elisabeth, Cape Town, Durban, Walvis Bay, Luanda and Lagos, backed up by regional hubs in Europe and the Middle East Aggreko has an unrivalled ability to support our customers across the entire African continent.

Africa.aggreko.com

The Kenya Chamber of Mines (KCM)

investors to take up licencing the reaction to the increase opportunities. “As of today we in mining activities and are still waiting to conduct operations from Kenyans a full airborne survey that themselves, particularly will map out the country’s local communities around Number of current resources,” Ms Gichuhi says. which said operations are members in KCM “This is something that we beginning to take shape. want carried out as soon as As KCM is well aware such possible and we continue to push hard for it to events can open the door to misinformation take place. In truth I believe the government of the positives and negatives of the is now starting to realise, thanks to the development of the industry spreading ever-growing amount of licence applications amongst local people, therefore it is one of it is receiving, the importance of such the Chamber’s key tasks to act as an accurate an undertaking, but we will continue to source of information and advice. lobby for it until it happens.”

Of course the buck doesn’t stop there with It would be remiss to not also consider the Chamber. It also falls upon the mining

124

BE Monthly | 179

TAITA TAVETA UNIVERSITY COLLEGE VOI KENYA Taita Taveta University College (TTUC) was established in 2007 as a campus of the Jomo Kenyatta University of Agriculture & Technology (JKUAT) but was upgraded to a Constituent College of JKUAT in 2011.

With a student population of over 2,000, the University College currently has five schools. The flagship programme of the University College is the BSc in Mining and Mineral Processing Engineering (MMPE).

In addition SEMTECH also runs short courses in Gemology. The importance of the BSc in Mining and Mineral Processing Engineering Programme continues to rise dramatically in Kenya following discoveries of commercially viable deposits of titanium minerals, iron ores, niobium and rare

earths, among others, and prospects of a major gold find soon on the heels of intensified exploration efforts. Shortage of engineering workforce to service the mining, oil and gas industries will continue to bite for many years to come not, only in Kenya but in the whole region of eastern, central and southern African nations. To enhance its educational training capacity, both in terms of academic staff as well as in terms of engineering infrastructure, TTUC has entered into partnerships with other reputable mining universities in Australia, Europe and Africa. principal@ttuc.ac.ke www.ttuc.ac.ke

TAITA TAVETA UNIVERSITY COLLEGE - THE HOME OF IDEAS

Taita Taveta University College is increasingly recognized as the Centre for the training of University level engineering workforce for the oil, gas and mining industries in Kenya. Our graduates come out having acquired competence and basic skills in design of both surface and underground mines, mine surveying, blasting with explosives in quarries, mines, civil engineering works, design of mineral processing flow sheets and Computer-Aided Design, among others.

Services/programs • Technical advice to investors on mine design, mineral processing and extractive metallurgy • Research and Technological Innovation, including innovation geared at creating indigenous industries in the minerals, oil and gas downstream activities

• Offering Short Courses on Gemology, Gem Cutting, Jewelry Manufacture Marketing and other Value Addition processes • Community Outreach Programmes Other Courses offered at TTUC include the Following • Bachelor of Science in Information Technology • Bachelor of Science in Mathematics and Computer Science • Bachelor of Commerce • Bachelor of Purchasing and Supplies Management • There are also various Certificate and Diploma programs on offer For more information please visit: www.ttuc.ac.ke

The Kenya Chamber of Mines (KCM)

“Anyone wanting to become a member of KCM must be in full compliance with the laws and regulations that govern the environment” companies themselves to build and maintain a positive image for the sector. Where the Chamber does play a role in this is by constantly promoting the concepts of responsible, ethical and sustainable operations.

“First and foremost,” Ms Gichuhi says, “anyone wanting to become a member of KCM must be in full compliance with the laws and regulations that govern the environment.

Further to that, part of our own strategic

objective has been to develop a code of ethics for our membership which will see them ensuring their full compliance with issues surrounding environmental protection, community relations and corporate social responsibility initiatives.”

When asked to look ahead to what the future holds for KCM, and the mining sector in Kenya as a whole, one of the first things on Ms Gichuhi’s agenda is the third annual

BE Monthly | 181

“Kenya is undoubtedly one of the foremost reasons why Eastern Africa is now regarded as a new frontier for mining in the developing world” Mining Business and Investment (MBI) Conference taking place in October at the Safari Park Hotel in Nairobi. “The MBI Conference is one of the significant events on our calendar,” she enthuses. “It is here that we draw in a whole host of current and future investors, all of whom are keen

182 | BE Monthly

to get a better understanding of mining in Kenya, what opportunities exist here, the challenges that we are working to overcome and what the government’s position is when it comes to supporting the industry, all of which makes for a hugely important event for all parties involved.”

The Kenya Chamber of Mines (KCM)

Kenya is undoubtedly one of the foremost reasons why Eastern Africa is now regarded as a new frontier for mining in the developing world. With the country’s relatively unexplored land playing host to a wealth of mineral based opportunities there is unlikely to be any slowdown in the near future when it comes to investors seeking out new projects for exploration and development.

With that in mind Ms Gichuhi is keen to emphasise that there are long-term plans for the KCM to evolve and grow alongside the mining sector so as to continue fulfilling its mandate and obligations. “As well as positioning ours for the expected growth in membership that

the Chamber will receive going forward, we are also planning for the possibility of one day becoming part of an integrated Chamber of Mines and Energy. The bringing together of these two separate entities would bring Kenya in line with international standards and will help give both fields a larger platform for dialogue and one collective voice to represent the hugely important extractive industries in the country.�

For more information about The Kenya Chamber of Mines (KCM) visit: www.kenyachambermines.com

BE Monthly | 183

Reliability in transport Kengas Group Limited started with bulk petroleum products before moving into supply and delivery services within the Great Lakes Region including Southern Sudan

written by: will daynes | research by: james boyle

K

engas Group Limited started with bulk petroleum products before moving into supply and delivery services within the Great Lakes Region including Southern Sudan. The company has over 25 years’ experience and operates in some of the most demanding locations.

Kengas Group firmly believes in putting customers’ needs first, promoting equity within its ranks and re-investing its profits on tangibles that make a difference to customers.

Bringing together the best minds and the best technologies, Kengas understands that having high standards is the driving factor of change in life. By bringing greater synergy to daily business, maximizing the efficiency of businesses and providing specialized services

184 | BE Monthly

across countries, Kengas integrates continuous improvements to bring changes for the better.

Kengas’ vision is to become the regions leader in providing specialized services in remote environments based on sound success in the oil industry. In its quest to do so the company strives to efficiently and reliably provide services that fuel the national economy, improve quality of life, create maximum value for its shareholders and stakeholders, and empower its employees.

Distinguishing characteristics of the business stem from a combination of management experience, service experience and quality of service. Above all else, Kengas Group treasures the corporate values of integrity, teamwork, communication, achievement, compassion and understanding, in the people it employs.

Kengas group

Much in the same way as its employees, Kengas itself endeavors to always conduct itself according to a set of core values. These include its desire to operate its businesses safely and remain good guardians of the environment, and comply with environmental regulations.

Integrity in the form of being honest and open with its employees, customers and stakeholders is another core value, as are trust and respect.

Kengas Group is committed to fairness in the rewarding of employees on the basis of their performance and contribution to the organization. It recognizes diversity as a key strength, and works hard to foster an inclusive environment that will enable everybody to fully participate and contribute.

Last but not least is competitiveness. Kengas aims to be competitive through efficient

and reliable operations, superior customer service, the adoption of best practices, seeking innovation and applying technology as a competitive advantage.

Kengas Group today boasts a wide range of capabilities. These include fuel logistics and supply, cargo logistics, catering services, procurement, camp designing, construction and management, fleet management and ICT services. In addition to all of the above it is also able to provide warehousing, laundry services, consulting, contract logistics and other specialized services.

For more information about Kengas Group visit: www.kengasgroup.com

BE Monthly | 185

Growing on goodwill

186 | BE Monthly

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

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

BE Monthly | 187

M

ining operations rely on their equipment, and there’s no doubt that each site has a lot of moving parts in its conveyors, trucks, shovels, milling and grinding trains, not to mention its associated drilling programmes. All of this has to be nursed and protected with the right oils and greases. As any operations manager knows, lubricants can be a big budget item and one that pays back in proportion to its contribution to things like frequency of maintenance, equipment life and the avoidance of running problems that involve stopping the machine.

The market is crowded and to a large extent protectionist in nature. The big oil companies all sell their own brand specialist industrial oils. Some equipment OEMs list approved suppliers; others provide a spec; some even sell their own branded lubricants, made for them by third parties, and try to compel the mines to use them by warranty sanctions.

But this very market has been Lubritene’s opportunity. The privately owned company, which started life around 16 years ago as the spin-out of the lubrications division of a more diversified chemicals company, has made a point of staying the right size. It has also steadily grown its own range of products specifically designed for mining applications including earthmoving equipment like draglines, shovels & dump trucks, drilling rigs and a variety of equipment in open cast mining operations.

Typically the major oil companies approach the market from the outside in, providing a product that meets OEM specs. Lubritene has always approached it from the inside out

188 | BE Monthly

Lubritene (Pty ) Ltd

– starting with the equipment’s user. “Our model is that we supply a product specifically designed for the machine,” says Dave Gons, Lubritene’s Sales Director. “We try to keep in line with OEM specs and if we do have a spec we try to exceed it.”

But more important is that the product works in the field. The big companies are not always hot on service: a customer may be pressured into using an OEM product for fear of nullifying his warranty but will think again when the warranty expires and he realises he has been paying a large premium for something that originates from an unknown third party, with indifferent support.

Other larger customers use their buying power to insist on keeping their long-standing relationship with Lubritene, which at a large site is likely to have its own personnel permanently on site, looking after all its lubrication requirements. “Backup service comes as part of our package, and when these customers procure new machines they are not about to be told they have to change the way they have operated for many years.” There’s always another supplier, he points out.

There may be two permanent Lubritene engineers at a large Anglo Coal mine, equipped with their own vehicles. The relationship is a close one – almost a family relationship at

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

The lubricants, branded as Lubrene, are manufactured on the company’s site at Edenvale near Johannesburg. There are separate plants for each of the different

“We try to keep in line with OEM specs and if we do have a spec we try to exceed it” 190 | BE Monthly

Lubritene (Pty ) Ltd

products – open gear established in the Australian lubricants for example, nonmarket, with offices in Perth melt grease or drilling core and Brisbane. At one time fluids as well as synthetic oils it experimented with local for enclosed gearboxes. toll manufacturing but Years since Lubritene In 2006 the management unsatisfied with the quality was founded of the company discussed the and consistency it drew next phase of its expansion, back to supplying direct realising the domestic market from South Africa. Better a was reaching saturation. It was decided that dependable product than saving a few dollars the next target should be Australia, where in transportation costs, he says. there was growing interest in Lubritene’s Lubritene is used to requests from other product and service model. A subsidiary parts of the world too, largely driven by the company was set up there, and to cope with diaspora of mining engineers from South the increased demand a new six-ton capacity Africa. The latest new office was opened in Santiago, Chile, where it is servicing the grease plant commissioned at the factory.

Seven years later the company is well booming South American market. And Dave

16

BE Monthly | 191

Gons has been able to advance his personal he declares, “Our model is a bit different dream of capturing the wider African from theirs. They have tried to open service market. “We supply neighbouring Namibia, divisions but they provide a service for a Mozambique, Botswana and all the way up period, then it breaks down or they outsource it to a generalist” into Mali, and Tanzania.”

Service levels in these territories are no Service is not the only differentiator less than in South Africa. With 40 van- though. “Most of our products arose from equipped engineers ready to fly out to a problems at mines that we were approached mine if it is not close enough to solve. If you are faced with to drive to, Lubritene will a persistent problem and ask one of the big players to not compromise on the service that differentiates it. make a grease with special Gons is undismayed by the properties to solve that – competition that undoubtedly forget it. They have a list exists. “You need to know of products that they work Year Lubritene Australia was founded your position in the market from. We are completely or you know nothing at all!” different.”

2006

192 | BE Monthly

Lubritene (Pty ) Ltd

“If it works, well and good; if not we try something different till it does work!”

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

Back in Gauteng, Lubritene’s R&D team will work on a customised sample then return to the mine to test it. “If it works, well and good; if not we try something different till it does work! Unlike the large companies I can

talk to my chemist any time, tell him what I want, and he can do it. No red tape.”

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

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

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

BE Monthly | 193

Simang Group

Strength in numbers By bringing viable businesses with strong growth potential under its wing, Simang Group is on its way to reaching its goal of becoming a platinum rated group of companies

written by: Will Daynes research by: Jon Bradley

BE Monthly | 195

Simang Group

1

994 will undoubtedly forever be the whom emerged from adversity to establish year that mankind associates with the their own successful enterprises. modern South Africa. One does not In pursuit of its goal of becoming a need to be a historian to know that platinum rated group of companies Simang it was here that the days of apartheid Group has gone on to supplement its existing slowly came to end, resulting in the multi- capabilities through the aggressive targeting racial democratic election that brought and acquisition of other businesses. When Nelson Mandela and his African National it comes to these acquisitions, the group Congress (ANC) to power. provides leadership and strategic direction Nevertheless, the vestiges of apartheid still while the management of Simang Group shape South African politics and society to Subsidiaries is tasked with implementing the this day. One of the most important events business strategies of these companies. that was given rise by the events of 1994 Today, Simang Group’s primary goal is to was the launching of the Black Economic monitor the market in a number of sectors Empowerment (BEE) program. Launched in order to identify businesses that showcase to redress the inequalities of long-term potential and could the past the program gives eventually be brought under its umbrella of companies. previously disadvantaged In order to do this the group g r oup s of S out h will typically set about African citizens economic enthusiastically purchasing pr iv i leges prev iously The year Simang Group unavailable to them. majority shares in said was established While BBE, like virtually businesses, adding them all we l l -i nt e nt ion e d to the holding company’s programs, and other efforts from the ANC portfolio of assets. Once the deal is done, have come in for certain criticisms in the Simang Group then sets about transforming past, one cannot deny that it has resulted in the companies by applying its tried and a number of inspirational economic stories tested business strategies to the new projects in the hope of instigating growth and arising in recent times.

One of those is that of the Simang Group, ultimately healthy profit margins.

Although the interests the group a black owned and controlled equity investor interested in acquiring majority shares accumulates typically fall into a number in viable businesses with strong growth of highly diverse business categories, they prospects. Formed in 2008 through the soon become linked in the sense that they consolidation of the interests of a group each go on to profit from Simang Group’s of major shareholders under one roof, the modern approach, its well-known passion group’s founders consist entirely of previously for quality and its track record for embracing disadvantaged black South Africans, each of technological advancements.

2008

BE Monthly | 197

Simang Group In recent years the group has compiled what is unquestionably an impressive portfolio of assets, and today controls a host of companies from sectors including job recruitment, consumer electronics and property development.

Each business invariably represents the continued economic prosperity being experienced in its field of activity. This is further highlighted by the group’s recent venture

into South Africa’s aviation sector, the most developed on the continent, with its acquisition of a 30 percent stake in ExecuJet. The largest business aviation company in Africa, ExecuJet boasts a charter fleet of more than 50 aircraft and world class facilities at both Cape Town and Lanseria International airports, making it widely regarded as the market leader in its field.

Also central to Simang Group’s activities

CUMMINS POWER GENERATION Cummins Power Generation division is recognised as a world leader in the design and manufacture of pre-integrated generator sets, ranging from 8 kVA to 3300 kVA. All major components including engine, alternator, transfer switches and control systems are designed and manufactured according to the highest standards of quality set by Cummins.

Power Command technology from Cummins Power Generation is an innovative way to ensure the equipment in a power system works in synergy from the start. It involves a pre-integrated design, rather than the combination of an engine, alternator, controls and transfer switches from a variety of manufacturers. The result of pre-integrated power solutions is smaller equipment footprints, reduced installation time and higher system reliability in regions that are regularly affected by constant and prolonged power outages.

For long and short term standby power needs, permanently installed and mobile power systems have been used across Africa by various hospitals, factories, office buildings, hotels, casinos and telecommunication centres.

Cummins Power Generation has the ability to meet any demands for standby power, whether it is a simple diesel generator set or a complete PowerCommand pre-integrated power generation system. Current product development at Cummins Power Generation focuses on the reduction of engine and generator set emissions that can contribute to pollution and global warming. The Cummins range of power generation products and manufacturing processes are designed to lead to a cleaner and healthier environment, and comply with or surpass all international emissions standards. www.cumminspower.com

BE Monthly | 199

“Expansion and growth are going to be the big themes that drive the group forward in the coming months and years� and its corporate strategy is its steadfast belief in delivering corporate social investment. The company has a strategic objective focussed specifically on this area and has a number of corporate social investment initiatives running. These include its prestigious

200 | BE Monthly

position as patron for the Gauteng Education Department Top Student Awards.

This ethos also extends into other facets of the group’s business, not least of all its recruitment policy. Here Simang Group maintains a strong obligation and

Simang Group

commitment towards employing individuals who have had less fortunate upbringings.

In doing so the group has learned that in providing its employees with the same opportunities that its founders enjoyed it is rewarded by a healthy combination of enthusiasm, professionalism and hard work, something that acts as a perfect foundation for the group going forward.

While the economic climate of 2013 certainly differs from that of 2008, prior to the onset of the global economic crisis, Simang Group has managed to weather the storm so to speak and continue to

expand, with its combined workforce of approximately 1,000 people set to grow further still by the end of 2013. Expansion and growth are going to be the big themes that drive the group forward in the coming months and years, all while it continues to ensure that its companies remain profitable, competitive and provide quality products and services.

For more information about Simang Group visit: www.simang.co.za

BE Monthly | 201

Cobre Las Cruces (CLC)

21 Century mining st

By maximizing its return on considerable investment in recent years Cobre Las Cruces (CLC) is well on the way to achieving its vision of becoming a benchmark standard in modern mining operations

written by: Will Daynes research by: Louisa Adcock

BE Monthly | 203

Cobre Las Cruces (CLC)

L

Ariel view of mining operations

ocated at the eastern end of the prolific Iberian Pyrite Belt in the province of Seville, Spain, Cobre Las Cruces (CLC) is a highly innovative open pit mine and the first industrial installation of its kind to operate within Europe.

Providing direct employment to 800 employees, as well as generating approximately 1,500 indirect jobs, CLC represents a major €840 million industrial investment into an area that also spans the Spanish provinces of Badajoz and Huelva, and extends through the south of Portugal.

Exploration of the mine site commenced in 1992, with a complete site evaluation running from 1994 to 1999. June 2009 saw the start-up of production at the mine, which has an estimated lifespan of 15 years.

“Since the production phase began,” states Plant Director, Enrique Delgado, “the growth of the business has been marked by the evolution of the site’s production plant, which has been steadily approaching its maximum output of 6,000 tonnes of copper cathodes per month, a figure which was just achieved in mid-2012. In 2012 alone we produced 58,000 tonnes of copper cathodes, with a resulting turnover of €425 million .”

The hydrometallurgical plant is the heart of the operations and the key element of the complex. Unique to Europe, it is where the ore is converted into copper sheets following a process that offers clear advantages at a technical, economic and environmental level; in fact it is considered by the international mining industry as being a clean technology for obtaining copper. The finished result

BE Monthly | 205

Moving toward the future!

INSERSA

INGENIERIA DE SUELOS Y EXPLOTACIÓN DE RECURSOS, S.A.

Mining and Tunnelling Drilling Civil Works Building Construction Paseo del Coso, s/n Minas de Riotinto (Huelva-SPAIN) Tel: +34 959 590 506 Fax: + 34 959 590 537 insersa_riotinto@insersa.es www.insersa.es

1988/2013 - 25 Years Anniversary

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

www.bus-ex.com/mining

206 | BE Monthly

is grade “A” copper cathodes with a purity of more than 99.999 percent, according to the London Metal Exchange. It is this that makes up the final product of CLC, ready for commercialization and transformation into rods or copper wire.

Today the core focus of the business is to advance the asset to its next phase, which fundamentally means gaining access to new, under-developed areas of the site. As far as the production plant goes, the company’s efforts are focused on optimising its output.

This is a task made all the more important by the fact that 2013 marks the first full year during which the plant will have operated consistently at maximum capacity.

Other long-term plans for CLC include examining the possibility of the exploitation

Cobre Las Cruces (CLC)

Hydrometallurgical plant

of other complementary mineral resources containing copper deposits. Bearing this and the aforementioned on-going developments in mind, it explains why the company has endeavoured to invest consistently in its operations.

“Once the major investment stage during the construction of the plant complex was complete we immediately began the process of undertaking important improvement works

elsewhere around the complex, including the construction of our water treatment plant,” Delgado continues. “By the end of 2012 investment in the mine and its associated infrastructure had exceeded €80 million .”

While CLC does indeed work with many of the most qualified international suppliers, especially when it comes to the innovative technology used at the mine, it is a preference of the company to work with local suppliers

“In 2012 alone we produced 58,000 tonnes of copper cathodes, with a resulting turnover of €425 million” BE Monthly | 207

who it considers to be every bit as valuable to the mine’s success.

Similarly CLC has, since the start of the construction phase, given particular priority to the training of local professionals who join the business. “Today there are many individuals from this region that carry out functions in the business for which they have been specifically trained.” Delgado highlights.

“Providing employment is however just one

way that our operation positively impacts the local economy. With many of our employees, as well as contractors, being residents in neighbouring areas around the mine it has helped create a large number of indirect jobs in all manner of services including hospitality and transport.”

The concept of sustainability also exists as a high priority within CLC’s ethos. “As is the case with work safety,” Delgado says,

“First Quantum Minerals have already made it clear that they intend to invest more than €100 million into this project in the coming years”

208 | BE Monthly

Cobre Las Cruces (CLC)

“with regard to the environment our belief is that prevention is better than cure. As such there are three key themes that we continue to work towards. These involve the progressive environmental restoration of the area in which we function, the total care of the water resources in said area and the absence of tailings ponds, which completely eliminates the well-known risks associated with such facilities.”

Happily for Delgado, CLC’s employees and the suppliers and communities which benefit from the mine’s presence, the future of the development looks very healthy indeed.

“Our owners, First Quantum Minerals, have already made it clear that they intend to invest

more than €100 million into this project in the coming years,” Delgado explains.

“Furthermore, if the feasibility of additional mineral resource exploitation is approved, this would require additional investment to carry out such a project. However, if the current estimates are confirmed, we could be talking about expanding the mine activity between 10 and 15 years longer than currently planned, which will be great news for everyone.”

For more information about Cobre Las Cruces (CLC) visit: www.cobrelascruces.com

BE Monthly | 209

210 | BE Monthly

Hydro-Québec

Energy for

the future Hydro-Québec is the largest energy supplier in the Province of Québec: it harnesses Canada’s fast-flowing rivers to satisfy the demands of both domestic and export markets in North America

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

BE Monthly | 211

A view of the dam as the ground work begins to take shape

Hydro-Québec

H

ydro-Québec owns and operates 60 power-generating facilities across the province. It was created in 1944. “At that time it was essentially an electricity distribution operation, with some generation in the greater Montreal region,” explains President and CEO Thierry Vandal, who has led the company since 2005, having joined it in 1996. “That was the situation until 1963 when, through a number of acquisitions, the corporation grew to develop a footprint which covers all the territory of Québec. HydroQuébec became a regional player.”

Over several decades the company mainly expanded hydroelectric power, with 98 percent of its output today coming from hydroelectricity, a clean and renewable energy. Hydro-Québec built the 15,000MW La Grande River complex at James Bay in northern Québec between 1971 and 1996.

The complex accounts for half the province’s installed capacity and is still today one the most important hydroelectric complex in the world. 1,000 kilometres north of Montreal, La Grande demonstrated the company’s ability to deliver huge capital projects, in challenging conditions with all the associated infrastructure of roads, campsites, transmission lines and airstrips.

The most recent project to be completed was the $5 billion Eastmain 1A-SarcelleRupert project, in the James Bay area. It was launched in 2007 with approval to build the Eastmain-1-A and Sarcelle powerhouses and divert part of the Rupert River’s flow. The diversion began in 2009, two of the three generating units at Eastmain-1-A powerhouse

BE Monthly | 213

www.neilsonex.com

GIGANTIC IS WHAT WE DO BEST

NEILSON IS ONE OF THE LEADERS IN QUEBEC FOR MAJOR CIVIL ENGINEERING WORKS.

.. ..

Clients benefit from Neilson’s huge…

Know-how Fleet of leading-edge equipment Multidisciplinary first-rate technical team Ability to carry out large-scale projects

Wuskwatim Generating Station Intake Powerhouse under Construction, Wuskwatim, MB

Hydro-Quebec, Péribonka Generating Station, Péribonka, QC

St. Lawrence Pipeline, QC

Hydro-Québec were commissioned in 2011, Neilson the third in January 2012.

Neilson is a general contractor specialized in civil engineering The first generating unit at on a monumental scale. Since 1963 public and private sector Sarcelle powerhouse was partners in Quebec, and elsewhere in Canada, have counted commissioned in April 2013 on Neilson to break new ground, meeting the most extreme and the two other units have challenges while standing behind the quality of our work. now come on line. “From an Partnership with Hydro-Quebec on La Romaine project is an example of what we proudly realize. environmental and logistic www.neilsonex.com standpoint it was the most challenging project in the history of Hydro-Québec,” he says. “It covers an area the size of some European countries but we were able to bring it in on time and a little under budget so we are very proud of that result.”

Hydro-Québec is unusual in that it manages these large construction projects by itself instead of outsourcing the engineering, procurement and construction. “We are an organisation with a strong culture of growth and project execution,” says Vandal. “That expertise has developed over the years as we went from one project to another and it’s taken us to a level where we can undertake very sophisticated large capex projects involving challenging infrastructure and logistics. That is an area in which we very much excel.”

But it’s not all about delivery. Another Spillway construction significant factor has been the way the company has arrived EBC Inc. at a deeper understanding of EBC Inc., for over 30 years, has been a proud partner in the what he calls ‘the equilibrium success of Hydro Quebec projects. Besides hydro-electric of development’ – the works, EBC diversifies its achievements in sectors such as balance between finance, the building, civil engineering, earthworks, marine engineering, regional economy, and also, mining works (open pit and underground), wind farms and crucially, how to address pipelines, with its works being performed throughout Canada. environmental and social www.ebcinc.qc.ca aspects. “A very significant

BE Monthly | 215

“A very significant key to our success over the last 15 years has been the renewed partnerships with aboriginal communities” key to our success over the last 15 years has been the renewed partnerships and understanding of the importance of our relationships with aboriginal communities.

We never tackle a new project without strong buy-in from local populations.”

You can’t put a multi billion-dollar megaproject into the environment without some impact, but Hydro-Québec’s goal is to fit in with the ecosystems in a way that

216 | BE Monthly

guarantees that those ecosystems afterwards will be just as productive as they were before.

That applies to natural habitats and wildlife, the way of life and the cultural expectations of the trappers and tallymen among the First Nations and other long-term inhabitants. “We take our ideas to the aboriginal communities before they are fully formed, then work together to develop it so it becomes their project as much as ours.”

Hydro-Québec

Hydro-Québec’s goal is to fit in with the ecosystem

This gives space to traditional knowledge, which any incomer ignores at peril. “There is more than science to these things, there is a traditional understanding of ecosystems that has been carried over the centuries.” It takes humility to put aside your scientific assumptions and listen to what the locals say, he recognises.

The old ways of living and the associated wisdom do have to be preserved, but the First Nations live in the 21st century just as much as Montrealers. They want to see their share of the economic upside of development in their territory and Hydro-Québec always wants to make sure to maximise the business capacities in the communities. “We reserve a portion of contracts with these communities so at the end there remains a significant

business infrastructure and ecosystem that can go beyond and work in other areas whether it is mining or other infrastructure development,” Vandal observes. “We have been working in some of these communities for up to 40 years, and today they have very sophisticated capacities in terms of executing civil works and being present in the supply chains for things like catering, fuel supply, air transport, helicopters and the like.”

The Eastmain 1A-Sarcelle-Rupert project was completing just as Hydro-Québec entered what is undoubtedly it flagship project today.

The $8.5 billion Romaine Complex launched four years ago is one of the largest construction projects currently under way in Canada. It has two large components, Vandal explains: a $6.5 billion four-powerhouse complex on

BE Monthly | 217

the Romaine River in eastern Québec and a $2 billion new high voltage transmission lines to carry the 1,550 MW it will generate to markets further to the south. “We are now almost half way through the project,” he says.

“The first power house, Romaine-2 will be commissioned by this time next year so it is very advanced and we are well under way

with RO-1, RO-3, and the fourth one, RO-4, which is way up north on the river, will be started in the coming year.” The entire project is scheduled to be delivered in 2020.

That the terrain is difficult was recognised as long ago as the 1630s when the first Jesuits to arrive described the locals as Montagnais – mountain dwellers. For this, construction

“The way the markets work in North America, the border does not really exist!”

Camp Murailles

218 | BE Monthly

Hydro-Québec

Hydro-Québec works with local communities

camps for some 2,500 people had to be built, as well as 150 kilometres of road. “Before we went through the environmental review we made sure we had signed impact benefit agreements (IBAs) with both the aboriginal and non-aboriginal communities living within a perimeter of a couple of hundred kilometres from the river.” The Innu communities of Ekuanitshit, Nutashkuan, Unamen Shipu and Pakua Shipi participated in the environmental impact studies and will participate in the environmental follow-up monitoring until 2040. The estimated cost of the studies, mitigation measures and environmental monitoring is $320 million and covers fish habitats, wildlife and

archaeology which has shown evidence of settlements going back 2,000 years.

In terms of local benefits, employment and contracts, Hydro-Québec typically tries to works with existing community organisations who will hire themselves. This works better according to Thierry Vandal: “We find that when the project is completed we leave an organisation that can take on other work.”

The companies and institutions are made stronger and more sustainable.

The supply chain for a large scale project like the Romaine is a global one. For example turbines are supplied by Alstom and Voith, the transmission grid will involve global suppliers like Alstom, ABB, Siemens. The assembly

BE Monthly | 219

A view of the dam as the ground work nears completion

Hydro-Québec

$8.5 Billion Cost of the Romaine Complex (generation and transmission) being made right on-site pulls in a lot of trades.

Contracts and purchases of goods and services are estimated at $3.5 billion for all of Québec, with about $1.3 billion for the Côte-Nord region alone. About 40 percent of the workforce consists of people from the Côte-Nord, including a significant number of the Innu people.

The Romaine Complex will secure Québec’s energy future and take advantage of opportunities to sell power outside the province. The USA’s demand for green Canadian hydropower is growing. In a project with Blackstone Group Hydro-Québec may take up 75 percent of the capacity of a new 333-mile transmission line being built by Blackstone Group from the Canadian border and running underground and under the Hudson River, into the heart of New York City.

“We are also very active in the development of high-voltage DC transmission, which allows the interconnection of import and transmission systems in a very efficient and cost effective way,” he says. “The way the markets work in North America, the border does not really exist!”

For more information about Hydro-Québec visit: www.hydroquebec.com

BE Monthly | 221

222 | BE Monthly

Aqualogy

Transcending water into wellbeing Aqualogy’s efforts throughout the world highlight precisely why it is positioned as a global benchmark when it comes to providing water solutions for sustainable development

written by: Will Daynes research by: David Brogan

BE Monthly | 223

View of La Farfana sewage treatment works in Chile

Aqualogy

A

chemical compound whose molecules are made up of one oxygen and two hydrogen atoms connected by covalent bonds, it covers 71 percent of the earth’s surface and is a vital ingredient to all known forms of life. I am of course referring to water, a commodity that can all too often be taken for granted for people living in developed societies The same however can certainly not be said about Aqualogy, the global brand of integrated water solutions for sustainable development. It understands that water is essential to achieving a higher quality of life and wellbeing in society, as well as being a basic resource for productive economies on all continents. It is for that reason that the company sets out to tackle the serious challenges posed by the lack of proper water management in parts of the world by providing intelligent and innovative solutions that also help facilitate sustainable development.

It is the company’s mission to promote research based on knowledge and experience in order to respond to the current and future challenges of its customers and society, thus allowing it to become the leading figure in the development of water solutions and technologies. In striving to achieve this Aqualogy conducts itself under a strict set of values which include maintaining excellence in its performance, its commitment to innovation and the talent of its people, its ability to adapt to each individual customer’s needs, and its commitment to creating lasting value.

Aqualogy is present anywhere in the world where it is able to provide solutions to improve

BE Monthly | 225

71% Of our planet’s surface is covered with water

Detail of one the installations at La Farfana sewage treatment works in Chile

226 | BE Monthly

water management. Indeed its global reach is impressive by any standards, what with 1,939 drinking water treatment plants, 264 desalination plants, 20 supply networks, 726 sewerage networks and more than 10,000 professionals based across the world.

In locations subject to shortages, such as northern Africa, the company is helping to ensure water supplies, while in Europe it is working to develop integrated solutions for the urban water cycle and serve the demanding needs of the food, energy, healthcare, tourism and pharmaceuticals sectors. Meanwhile, in Turkey it is preparing innovative initiatives that it believes will open the door to new markets.

Elsewhere, Aqualogy provides solutions tailored to the needs of its customers in the United States, Mexico and Brazil, while in Chile it has established a successful model for integrated water management. In rural Latin America it has also implemented several projects relating to water access and the promotion of efficiency in the use of water resources.

All of Aqualogy’s activities are executed using its own resources, either through public-private partnerships or in collaboration with other companies. Its four main areas of activity involve providing solutions to companies within the water sector, developing

Aqualogy

One of the installations of La Farfana sewage treatment works in Chile

hydraulic engineering building projects, providing specialised services and solutions aimed at improving water management, and offering services based on knowledge and people management.

Examples of Aqualogy’s work have their roots in all manner of industry sectors and global regions. For instance, in Oran, Algeria, the company has installed its iDROLOC system to search for leaks in the drinking water supply network. The system itself uses helium as a tracer gas to pipelines where conventional acoustic methods cannot be used to locate leaks.

Oran is familiar territory for Aqualogy with the company previously contributing to a number of important projects including meeting the challenge of providing the population of the entire province with water 24 hours a day and modernising its water analysis laboratories.

Head west across the South Atlantic Ocean and across South America into Colombia and you will find yet more evidence of the diversified work of the company, this time in the form of its role of supervisor in the construction of a submarine outfall. Built over a period of 17 months in the city of

“Aqualogy understands that water is essential to achieving a higher quality of life and wellbeing in society�

BE Monthly | 227

The Ice Pigging technological solution truck

Idroloc s

“Aqualogy aims to become a benchmark in each and every sector in which it operates and a key partner for water-related and environmental projects�

Cartagena de Indias, this outfall is the third largest anywhere in the world and completes the city’s plan to install a network of aqueducts, sewerage systems and basic treatment facilities. The outfall constitutes the most important project within the water sector for the city and means that Cartagena de Indias will become the first city in Colombia to be able to treat 100 percent of its wastewater.

228 | BE Monthly

Aqualogy aims to become a benchmark in each and every sector in which it operates and a key partner for water-related and environmental projects. To do so Aqualogy offers its customers its solutions and technologies, in order to provide a highquality service, adapted to suit their needs.

The company presently focus its efforts here on three important value drivers.

They are the optimisation of the amount of

Aqualogy

system, centred on leak location

water required in a given process, in order to draw up contingency plans and water source studies; the quality of the water and the environmental impact, from the prior treatment of process water to wastewater treatment; and the optimisation of waterrelated operations, with the operation and maintenance of assets and the supply of materials and products.

Come 2050, it is expected that the world’s population will have reached approximately nine billion people, the majority of whom will remain concentrated in large metropolises.

Combine this with the effects of climate change and it appears inevitable that water will increasingly become one of the most valued and sought after assets on earth, when it comes to both domestic consumption and

View of La Farfana sewage treatment works in Chile

use in agriculture, industry and services.

Aqualogy understands that in facing such a future it is imperative that sustainable water management models continue to be promoted. This will enable water to remain available to the entire population that encourages wellbeing and economic development. This has been Aqualogy’s fundamental aim since the day it was created, therefore it stands to reason that every decision it makes or project it takes on going forward will be designed to achieve a future where H2O continues to flow.

For more information about Aqualogy visit: www.aqualogy.net

BE Monthly | 229

Water, water,

Tedagua is a significant player in Spain’s b as its domestic market contracts the comp

written by: John O’Hanlon |

230 | BE Monthly

Tedagua

, everywhere

bid to lead the global desalination market: pany is concentrating its efforts overseas

| research by: David Brogan

BE Monthly | 231

Tedagua

T

Tertiary Treatment of the WWTP of Altona (Melbourne, Australia)

he Ancient Mariner complained abut the lack of drinking water on his ship in 1798 but fails to mention (perhaps Coleridge didn’t know) that Samuel Pepys had requested one of his naval captains to carry out “… an Experiment of producing fresh water (at Sea) out of Salt” as early as 1684. The outcome of that is not known, but it can’t have been that successful as onboard desalination doesn’t seem to have progressed much until the invention of the multi-stage flash (MSV) distillation process in 1955.

The desalination industry has grown exponentially: so has the water treatment industry, particularly in emerging markets But the technology and the market are constantly changing. One of the most agile players in this market since it was founded in the Canaries 1983 is Tedagua (Técnicas de Desalinización de Aguas SA). It started out as a small company but was acquired in 2001 by the leading Spanish infrastructure group ACS and was incorporated into the Cobra Group, which operates in the field of green energy. Tedagua was established due to the need for drinking water in the Canary Islands. Thanks to the support of Cobra, Tedagua has had the opportunity to grow substantially and is now one of the biggest and most respected water companies in Spain, and globally. The company now has permanent locations in all 5 continents, and is an international leader in the design, construction, operation, maintenance and engineering of desalination plants, systems for producing drinking water from brackish feedwater, and plants for recycling water

BE Monthly | 233

from sewerage feedwater. The company is also a leader in the design and construction of plants for treating and reusing urban and industrial waste for electricity generation. It has delivered more than 150 water treatment plants with a global capacity of 2,400,000 cubic metres per day.

One of the main reasons for the company’s success is the support it has received from its collaboration with Cobra Group, as it has been

awarded projects it would not have been able to handle before the collaboration. An example of such a project is the water treatment plant in Lima, Peru, which we discuss below. Today Tedagua has the capacity to act as a global player, says its CEO Miguel Ángel Fernández.

“This is why today, whenever the opportunity arises to bid for a new contract, in a new country, we rarely turn it down. And once we have worked in a new territory we like to

“Whenever the opportunity arises to bid for a new contract, in a new country, we rarely turn it down” 234 | BE Monthly

Tedagua

Installation of the submarine infall of the WWTP of Taboada (Lima, Peru)

set down a permanent base innumerable cities and there.” Because of different countries across the world – to name only a few it has legislation and regulations installed plants in Australia, it is always difficult to start Brazil, Mexico, Peru, Panama, a project in a new country, Year Tedagua Costa Rica, Central America, he adds, but the culture of was founded Tedagua is to be very proactive the Caribbean and Africa. rather than risk-averse when One really important it comes to expansion. current project is to build The success of this strategy is largely down the largest wastewater treatment plant in to the company’s greatest asset, its people, South America in Lima, Peru. Lima claims who show great personal commitment in Mr to be the world’s second biggest desert city Fernández’s opinion. “I think our excellent after Cairo. Operations began at he Taboada technicians are a really important element WWPT in February this year, and the plant in giving us an edge over our competitors.” will boost the treatment of sewage water in The can-do culture that they demonstrate Lima and the neighbouring city of Callao. has gone a long way to establish Tedagua Until now, most of the sewage water from as a truly global company, operating in Lima and Callao, with a population of over

1983

BE Monthly | 235

nine million, has been sent out to sea without any prior treatment or filtering — 20 cubic meters of raw sewage per second. The new plant will deal with an average flow of 14, and peaks of 20 cubic metres per second. No chemicals or disinfectants are used in the treatment process, and after several stages of treatment, the water will be sent out to sea along a 3.5 kilometre underground pipeline.

This year the company has also signed a contract to improve the drinking water systems in Dhaka, the capital of Bangladesh.

These three projects alone demonstrate the global scale of the company, but this has been built up over a period of time with many small desalination plants executed for hotel complexes or small farms in the Canary Islands, the large sea water

“I think our excellent technicians are a really important element in giving us an edge over our competitors�

Beni Saf Desalination Plant (Algerie)

236 | BE Monthly

Tedagua

WWTP of the city of Escatrón (Spain) with the Combined Cycle constructed by Cobra Group at the end

desalination plants of Escombreras in Spain or Skikda and Beni Saf in Algeria and tertiary treatment plants such as the RWTP in Altona, a suburb of Melbourne, Australia or the WWTP at Taboada in Lima (Peru), the largest in South America.

North African countries like Algeria have never had enough water for their people. The World Health Organization considers Algeria to be “water stressed” and desalination is a significant part of its water solution. The Beni Saf desalination plant went into operation in 2010, a facility designed to produce 200,000 cubic metres of quality water to cover the

needs of a population of 750,000 from the region of Oran and neighbouring areas.

Tedagua was the main contractor for the design and construction stages of the plant and subsequently assumed responsibility for its current task of management and maintenance of the facility over a 25-year period.

So the first decade of this century has been good for Tedagua, says Fernández. But the emphasis is now moving away from the domestic market. “From our point of view the AGUA programme has effectively come to an end, and the opportunities that arise in

BE Monthly | 237

Construction of one of the seven sand removals of the WWTP of Taboada (Lima, Peru)

Tedagua

2,400,000 Cubic metres of water delivered by Tedagua treatment plants per day our own backyard are more directed towards residential, service and industrial markets.

Our big focus is now on the international market. India, China, Australia, Arab Emirates, America and North Africa, for example, are all investing in desalination and inviting tenders for large desalination plants.” Spanish companies, he adds, are very active in these international markets, and Tedagua itself has installed capacity in many of them.

The forward strategy for Tedagua is to grow, and to be the strongest and most recognised company in its sector, says Miguel Ángel Fernández. “More specifically, we would like to grow within the industrial sector. For example, we have signed a very important industrial contract with a Colombian petroleum company – a plant of 80,000 cubic metres a day. The company will, however, also focus on other areas, such as food and mining. The mining sector, especially in countries such as Australia, Peru and Chile, has considerable requirements in the field of water management.”

For more information about Tedagua visit: www.tedagua.com

BE Monthly | 239

Medupi’s stra

The new coal-fired power station South Africa’s Limpopo Province i great achievements despite be

written by: John O’Hanlon | research 240 | BE Monthly

Eskom Medupi

ategic power

that is being built at Lephalale in is a megaproject that has delivered eing faced by many challenges

h by: Vincent Kielty & Robert Hodgson BE Monthly | 241

Boilers at different stages of construction

Eskom Medupi

S

ince we last spoke to Roman Crookes, project manager of the R105 billion Medupi power station, he has refereed a game of two halves. The press has had a field day throughout the three years since June 2010, and any observer could be forgiven for thinking the site has been a battlefield. However in every problem lies an opportunity, and it was good to get a chance to hear firstly about the achievements of the project, then about the good that has come from the setbacks that have been encountered.

As Crookes puts it: “This year has been satisfying: we have seen a lot of progress on construction, though unfortunately that progress can get lost in the noise.”

One of this year’s most significant milestones was the conclusion of an agreement between Eskom and Exxaro on a new schedule to supply the huge amounts of coal that will be needed from the Grootegeluk mine. This takes into account the delay in starting Unit 6, the first of the 800 MW units that was due to be completed by the end of this year but will now only be connected to the grid in the second half of 2014. “The infrastructure between us and the mine is now fully established and Eskom has 160,000 tonnes of coal on site,” says Crookes. The coal stockpile capacity on the 900-hectare site is 2.4 million tonnes, to keep all six units fed once they are all commissioned. Eskom now has the option to defer the commencement of coal deliveries to the Medupi power station from March 2013 to the first quarter of 2014. The subsequent rate of coal deliveries will then be increased to take the full volume of the deferred coal

BE Monthly | 243

Eskom Medupi over a period of 24 months prior to December 2016.

A second achievement that pleased the project team as they saw plumes of smoke arising for the first time, was the commissioning of the auxiliary boiler, an oil fired plant that produces the steam needed for chemical cleaning and testing Unit 6. This was something of a landmark, the first new boiler commissioned on a construction site in South Africa in the last 20

years. In advance of this too, the bulk fuel oil plant that will be used for the ignition phase of the boiler units as well as running the auxiliary boiler was commissioned.

The water treatment plant is nearing completion too, as are vital fire protection and auxiliary cooling systems.

All that is needed now is for the number 6 boiler to be commissioned – the turbine for that unit has been rotated to test bearing clearances

EXXARO Exxaro Resources is one of the largest South African-based diversified resources groups, operating the Grootegeluk Mine near Lephalale in the Limpopo Province. The mine has been contracted to supply coal to Eskom’s Medupi Power Station which is currently under construction. A 40-year agreement requires Grootegeluk to deliver approximately 14,6 million tonnes of coal per annum to the power station. To enable this, significant expansion of the mine and development of the surrounding area were necessary. The project involved geology, mining, metallurgy, civil engineering and construction solutions which were planned and managed by Exxaro in conjunction with Eskom, the Lephalale Municipality and other stakeholders.

The Grootegeluk Medupi Expansion Project involved five key elements: 1. Expansion of the pit.

2.Building two new coal processing plants (GG7 and GG8) and supporting infrastructure (such as two new additional blending beds and coal delivery conveyor systems) to deal with the increased volume of coal to be produced.

3.A backfill project to return overburden and discard material to the pit, which would previously have formed a surface ‘dump’.

4.A housing project to build 740 new houses in Lephalale to accommodate workers attracted to the region by the new power plant and mine expansion.

5.General infrastructure requirements in the region such as the development of local roads, stormwater drainage systems and electrical substations, the rehabilitation and expansion of the local Zeeland Water Treatment Plant and general warehousing requirements. www.exxaro.com

BE Monthly | 245

Mr Roman Crookes, General Manager

246 | BE Monthly

and the lubrication. The Unit 6 Generator Transformer has been back-energised, which means it is now connected to the grid.

Very recently the turbine contractor Alstom installed its final stator. All the plant really needs now is a supply of steam.

However it is well documented that the steam will take a little longer to flow than originally envisaged. Given the perfect storm of problems the plant has faced, a few months’ delay is not surprising. With the completion of some of the civil works the number of workers on site has come down from the original 18,000 to around 16,000, 95 percent of them South Africa nationals.

Much of the delay has been caused by labour issues affecting the seven different unions that represent them. A lot has happened in the labour relations field over the last three years. A Project Labour Agreement (PLA) was entered into by contractors and unions, and worked well until at the back end of 2012 when some of the unions withdrew.

This introduced a fracture among the unions themselves, says Crookes, and that forced Eskom to step in and intervene, working with the unions and contractors to forge a new agreement to replace the PLA, that this time included Eskom as a signatory and regulates labour relations at both Medupi and the other large plant under construction, Kusile.

Among other things, the new Partnership Agreement (PA), signed on June 12 this year, prescribes a minimum wage for all hourlypaid contractor employees; standardised pay rates within each company, across companies and within the same industries; and allows parties to appoint a task team to address

Eskom Medupi

Segwate pre-school at Medupi, built as part of its corporate social responsibility efforts

skills development and training needs. “The PA irons out the kinks in the PLA that caused much of the tension,” Crookes says.

The period that led up to the PA had seen some disruption, and that disruption has continued, with a wildcat strike on July 24 that resulted in property damage on site. This was caused by miscommunication around the question of pay for commuting time for the approximately 50 percent of workers who live within a 70 kilometre radius of the plant.

Workers are affected differently depending on precisely how far from the site they live.

The situation is now settling down well,

though, as the workers themselves appreciate that their new minimum wage is well above national levels in the construction industry.

The new PA is nothing less than a game changer for the entire South African construction industry, Crookes claims.

“Eskom, as a client, is now actively influencing the construction environment for the better.

The new PA agreement we have struck is now being used as a reference point for the unions when they are negotiating other contracts.”

On its own, the delay caused by labour disruption would account for much of the slippage in project delivery. However severe

“Eskom, as a client, is now actively influencing the construction environment for the better” BE Monthly | 247

technical problems have played their part too.

One issue was where the boiler contractor Hitachi fell foul of an Inspectorate of Machinery code compliance issue and had to review 180 welds in the pressure parts circuit, four of which had to be retrofitted – all additional work that had not been planned for. A second more serious problem arose when it was discovered that the subcontractor responsible for post welding treatment, a critical process in which welds are de-stressed, had fraudulently created charts in a sophisticated scam that left uncertainty as to how thoroughly the weld had been checked.

In short every weld – 9,000 of them – had to be re-checked. The sophisticated fraud led to a criminal investigation and further delays.

These technical problems have all been identified and addressed using well understood procedures that are part of any project management process. Medupi is a critical national asset, and any delay is to be regretted. However the labour relations issues are less predictable and negotiations involving powerful unions are sensitive in the run-up to national elections. What cannot be disputed is the fact that the project has been a great boost to the local manufacturing and economy.

The Medupi power station project created a lot of skills development within the

country. “Once we started building Medupi and Kusile we effectively introduced a lot of manufacturing capability back in to South Africa,” Roman Crookes points out. “For example for the first time in 20 years we now have the ability to build boilers here in South Africa. Technically we can now export boilers, which is a huge step in the right direction.”

Medupi’s local sourcing and industry creation policy has undoubtedly had a big impact

“For the first time in 20 years we now have the ability to build boilers here in South Africa” 248 | BE Monthly

Eskom Medupi

High voltage yard, air cooled condenser columns with boiler units and two chimneys

in the Limpopo region and nationally. The decision to build a third large power station, recently announced by the South African cabinet, will probably be implemented once the Medupi and Kusile projects are complete in 2018, adding a combined 9,600MW to the national grid. This should finally put an end to the electricity supply challenges that have affected South Africa since 2008, costing the economy billions of Rand in lost production and economic growth.

Thus the social impact has been significant, to Crookes’ great satisfaction. “People are becoming employed for the first time; given skills for the first time; paid for the first time!

And to sustain the impetus once construction is complete we have the Medupi Leadership Initiative where we work closely with the

contractors to produce opportunities for post construction employment in different infrastructure-related projects.”

The third power station will eventually mop up many of the newly-skilled people, and there are other important upcoming programmes in the pipeline, he says. “The government has said it wants to place a rail hub in the Lephalale region. That will need a lot of civil and mechanical trades to build it and lessen the impact of unemployment on the local community once all the Medupi units start supplying power to the national grid.”

For more information about Eskom Medupi visit: www.eskom.co.za

BE Monthly | 249

MISTRAS Group

Enhancing life expectancy MISTRAS Group Executive Vice President, Phillip T. Cole, discusses the group’s priceless contributions toward North Sea development over the last 20 years

written by: Will Daynes research by: Marcus Lewis

250 | BE Monthly

A robotic pipe scanner mapping internal corrosion in pipe-work

MISTRAS Group

I

n the last four decades no fewer than 698 offshore fields have been discovered in the UK Continental Shelf, producing in that time some 41 billion barrels of oil and gas.

With another 20 billion barrels estimated to remain untapped it comes as little surprise that the North Sea continues to be a huge boon to the UK and other surrounding nations.

One of the many companies fortunate enough to have been part of this continued prosperity is MISTRAS Group, who have been a consistent presence supplying a range of highly specialised products and services in the North Sea for almost 20 years.

“We began our activities here supplying valve leak detection technology in the form of our VPAC solution, which we developed together with BP,” explains MISTRAS Executive Vice President, Phillip T. Cole.

“An acoustic emission instrument, VPAC can estimate the quantity of material leaking through valves using its accompanying proprietary software and with more than 1,000 systems currently in use it is the instrument of choice for valve leak detection.”

It was then in January 2002 that MISTRAS successfully completed its first installation of a structural monitoring system on an FPSO. “This system is designed to monitor eight critical areas of the FPSO, areas that have been identified by stress analysis as being the most prone to cracks,” Cole continues. “This is technology that we used in the past on bridges and pressure vessels before adapting it to offshore use. Similar technology also extends to our installations that monitor and detect any failures in the structural wire armour or carcass of flexible risers.”

BE Monthly | 253

In addition to its crack detection sensors, MISTRAS Group also possesses arrays of strain monitoring gauges which collect comprehensive data that can be used by engineering consultants to refine fatigue models and in some cases considerably extend the life of certain structures.

A further service offered is what MISTRAS calls the on-stream inspection of process equipment. This service has been designed to

answer the question of how an operator can carry out inspections of pipework and vessels without the need to shut down production or place somebody in a potentially dangerous environment.

“The non-invasive approach that our technology utilises,” Cole says, “involves using scanning systems around the outside of the pipes or vessels so that we can actually map the wall thickness at extremely high speeds

“MISTRAS can monitor clients’ equipment and infrastructure on a continuous basis to effectively manage its integrity over the course of its remaining life”

Working from ropes is the access method of choice for inspection work

254 | BE Monthly

MISTRAS Group

A robotic scanner operated via umbilical cable can map at rates of 15 – 150 square metres per day

“The key reason that there to an accuracy of around 0.25 millimetres. This allows is demand for our services,” us to see where coatings have Cole continues, “is simply failed or where corrosion that our approach to doing is taking place.” things, where we work What binds all of MISTRAS’ with end clients and their activities together is the fact engineering consultants to that they are specifically develop faster and more Number of barrels of oil and gas believed to geared towards improving efficient ways of providing remain untapped in the detailed information about an safety and productivity by North Sea helping structures and plants asset, makes sense.” to remain online rather than One of the reasons it does shutting down operations so is because MISTRAS has to carry out invasive inspections. The very spent considerable time and effort designing nature of its work means that MISTRAS can and manufacturing many of its mapping monitor clients’ equipment and infrastructure and monitoring systems in house, a trait on a continuous basis to effectively manage its that differentiates it greatly from much of its integrity over the course of its remaining life. competition in the marketplace. “A lot of the

20

Billion

BE Monthly | 255

Final adjustments prior to launching a mapping scanner

A weld scanner identifies

“The trust that the industry places in MISTRAS and its technology can be clearly seen in the host of tasks and projects it has been involved in over the years” technology we use is that which has been developed by ourselves with our more unique applications being the result of talking to clients and developing solutions to meet the issues they have discussed with us,” Cole enthuses.

The trust that the industry places in MISTRAS and its technology can be clearly seen in the host of tasks and projects it has been involved in over the years. One of its more recent undertakings saw the

256 | BE Monthly

company carrying out an inspection on around a kilometre of structural weld using a combination of two ultrasonic techniques, TOFD and Phased Array. Traditionally competing techniques, they were brought together by MISTRAS and used on the same weld inspection. The result was the most detailed and conclusive batch of information possible, something which has and will prove invaluable for the client in question.

MISTRAS Group

s cracking and corrosion in welds

Of course, while the impressive quality of the technology itself is one thing, just as vital are the men and women tasked with using it. “Clearly, given the specialist nature of many of the operations we conduct,” Cole says, “it requires our staff members to carry with them several years of experience. For this reason we make it our priority to invest a lot in each employee, providing them with the training and apprenticeship opportunities that help them become proficient in carrying out their tasks on a daily basis.”

As previously stated, the North Sea remains a vital source of international capital, with activity and investment continuing to increase. With this also comes added pressure to extend the life of existing assets and this is arguably the biggest

Under-deck inspection using rope access

present driver of MISTRAS’ business.

“In the US onshore sector we are the largest service inspection company present and that is obviously what we would like to be here in the North Sea as well. The best way for us to achieve this is by continuing to introduce our technology to new clients and getting it put in place. While in some ways it is fair to say that we a relatively small player in the North Sea at present, we do remain at the top end of a technology spectrum that is in the midst of a continuous process of innovation.” Cole concludes.

For more information about MISTRAS Group visit: www.mistrasgroup.com

BE Monthly | 257

Mexico’s tower of strength

258 | BE Monthly

SPX - Marley Mexicana

By combining over a century of experience with cutting-edge, environmentally friendly technology, Marley Mexicana has solidified itself as one of jewels in SPX Group’s crown

written by: Will Daynes research by: Jeff Abbott

BE Monthly | 259

Marley Sigma Cooling Tower

SPX - Marley Mexicana

W

hile the name, SPX Cooling Technologies, has only been in use since 2005, the company that bears this title actually possesses over a century of experience, during which time it has become amalgamated with some the best known names within the cooling industry including Marley, Ceramic, Recold and Hamon Dry Cooling. This has resulted in the company possessing more than 250 global patents in the power generation, industrial, refrigeration and HVAC markets.

Originally founded in Germany in 1894, Balcke & Co. as it was then known, quickly went about becoming a world leader in cooling towers during the early 1900s.

Marley, meanwhile, was founded in the US in 1922, first as the Power Plant Equipment Company before becoming The Marley Company in 1926. Marley would go on to invent and patent most of the industrial cooling tower innovations and technologies that remain so vital to this day. It is this legacy that means that Marley Mexicana remains the only entity left within the SPX Group to retain its original name, that and the fact that the brand has been known in Mexico now for more than 50 years.

Drawing its strength across its operations from the unmatched quality of its products, SPX Cooling Technologies today boasts more than 150 offices, subsidiaries and partners across the planet, providing it with both a global reach and local presence in core markets that allows in to deliver the solutions its customers require quickly.

BE Monthly | 261

The company first opened its Mexico office, from which Marley Mexicana continues to operate, in 1960. Ever since it has been the leading regional force when it comes to cooling tower technology and sales, and has been responsible for installing towers into many of the country’s most important power plants on behalf of Comision Federal de Electricidad and Petroleos Mexicanos.

It is in Mexico that the company have noticed that in the last five years in particular there has been a considerable increase in interest from customers requesting access to material and equipment that doesn’t just exceed their expectations in terms of quality, but which also decreases pollution and toxic residues.

262 | BE Monthly

There is certainly a growing culture within the country of companies looking to be more sustainable and environmentally conscious, one that has increased as the Mexican energy sector has expanded in value. Fortunately for those in possession of such ethics, Marley Mexicana has long been known as a reliable supplier of cooling towers and air cooled condensers specifically designed to lower pollution and increase efficiency.

Promoting sustainable energy production is a trait that the company has long striven to possess and is encapsulated in the fact that SPX Cooling Technologies is proud to be a member of the US Green Building Council and is an advocate of the LEED Program, a voluntary, consensus-based national

SPX - Marley Mexicana

Marley Series 600 Cooling Tower

“SPX Cooling Technologies is proud to be a member of the US Green Building Council and is an advocate of the LEED Program� standard for developing high-performance, sustainable buildings. Evaporative cooling is a central strategy for green building design due to its energy savings and low environmental impact. Also, water treatment strategies to minimise make-up and blowdown can offer the potential to gain water resource credits in LEED. The LEED Program in itself is linked

closely to the ASHRAE 90.1 Energy Standard for Buildings Except Low-Rise Residential Buildings, a US standard that provides minimum requirements for energy efficient designs for buildings. LEED sets the ASHRAE 90.1 efficiency as the threshold for compliance before a building can even be considered for receiving LEED credits. These credits are subsequently granted based on improvements

BE Monthly | 263

in overall building energy efficiency that are better than ASHRAE 90.1.

Towers that are selected larger in physical size with energy efficiency in gallons per minute per horsepower above ASHRAE 90.1 can help a company to acquire LEED credits. The use of variable frequency drives (VFDs) can also enable significant annual energy savings in most climates, which also can help to enable LEED credits. Marley

Mexicana’s Tower Sizing and Selection tools are able to assist its clients by providing the ASHRAE efficiency calculation on the output of each selection.

As part of the Green Building Council the company can also supply its customers with the Green Building water calculator. This solution easily allows a company to determine water usage values such as evaporation, drift, blow down, and total water usage by

“Rather than being fearful of change, Marley Mexicana are embracing the prospect of serious reforms being made to the energy industry”

Marley Quadraflow Cooling Tower

264 | BE Monthly

SPX - Marley Mexicana

Marley Series 400 Cooling Tower

simply adjusting operating conditions like total water flow, hot water temperature, cold water temperature, wet-bulb temperature, drift rate, and concentrations to match each individual scenario.

The energy sector in Mexico finds itself at a key point in its evolution. This is perhaps best emphasised in the moves that have been made this year by the country’s President, Enrique Peùa Nieto to reform the energy sector. This culminated in early September when a bill of amendments calling for the overhaul of the sector was submitted to Mexico’s Congress.

The bill itself is seen as the beginning of a series of changes to federal legislation governing the sector and sets out the basis for a new perspective on its operation.

Rather than being fearful of change,

Marley Mexicana are embracing the prospect of serious reforms being made to the energy industry, recognising that they present the possibility of more opportunities for companies like it that are part funded by foreign capital. With a renewed focus on the industry being driven by government it stands to reason that investment will be made in new power plants and infrastructure within the country, and coupled with the increase in demand for environmentally friendly solutions, this will directly benefit the likes of Marley Mexicana.

For more information about SPX - Marley Mexicana visit: www.spx.com

BE Monthly | 265

266 | BE Monthly

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

BE Monthly | 267

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%

BE Monthly | 269

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

270 | BE Monthly

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

BE Monthly | 271

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

“Because we are small we are able to make quicker decisions and mobilise a team more rapidly than larger and more complex organisations” 272 | BE Monthly

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

BE Monthly | 273

“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

274 | BE Monthly

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

BE Monthly | 275

Going beyond safety For more than 20 years SOS Safety International has been committed to providing quality products and service to its ever-growing list of clients

written by: Will Daynes research by: Vincent Kielty

276 | BE Monthly

SOS Safety International

d

BE Monthly | 277

SOS Safety International

I

f you ask me what factors have contributed none of this would be possible without the most to our success,” says SOS Safety efforts of the company’s employees, whose International’s Managing Director, drive, passion and determination Nieves Carmen Nieves, “I would have to say it is credits as being SOS Safety International’s a healthy combination of hard work and greatest strength.

“As a team we have all contributed to effort, a lot of negotiating, a lot of sales and creating a business with more than 20 years ultimately a lot of satisfied customers.”

Since 1991, SOS Safety International of experience within our chosen fields of has been a premier distributor of industrial expertise,” Nieves highlights. “What this safety supplies and services. Committed to gives us today is a company that is a lot providing quality products and service for more than just a supplier of equipment. In the safety and protection of its customers, addition to this we have developed the ability their employees and facilities, and the to perform other critical services such as environment, the company supplies loading risk management, emergency response and equipment, fire fighting emergency pre-planning. equipment, remediation and It was our offering of these services that helped catapult oil spill equipment.

“From our initial work business even further forward with our sales increasing by of selling industrial hoses some 40 percent in the space to storage terminals we SOS Safety of two years.” gradually evolved into a International’s sales business capable of meeting In that time the reputation growth over the last all manner of needs across a of the company has increased two years range of core industry fields further still and this has led including fire fighting,” to SOS Safety International Nieves continues. “As we grew, so too did gaining a number of significant contracts in the level of positive word of mouth about the region. These include the Terminal Fire SOS Safety International and this further Assessment contract awarded by Statoil South assisted in our expansion from our original Riding Point in Grand Bahama, Bahamas. As base of Central America into Latin America part of this the company will be responsible for and the Caribbean.” fire protection engineering, risk management With each task it carries out, SOS Safety and emergency response consulting services International operates under the belief that as well as the procurement and installation quality service is key to ensuring customer of fire systems replacements. satisfaction, that establishing open and honest Meanwhile, the company has also been relationships with said customers is vital and awarded the Petrojam Newport Fire Systems that it must be prepared to think outside the project bid. In this particular project the box in order to meet their needs. Of course company provides the Petrojam Newport

40%

BE Monthly | 279

“With each task it carries out, SOS Safety International operates under the belief that quality service is key to ensuring customer satisfaction” terminal with a Fire Systems Assessment and was subsequently proud to announce that it had won the project bid for the supply of the bladder systems and all fire equipment as required per the bid.

As Nieves goes on to state, being a multiskilled business has also allowed SOS Safety International to overcome a number of the

280 | BE Monthly

external challenges facing the industry, not least of all the volatile economic climate of today. “By being flexible and multi-faceted we are able to move quickly when the market shifts, moving into other geographic locations and adding in-demand services in order to avoid the negative impacts that arise from a slow economy.”

SOS Safety International

Taking into account the above, it comes as little surprise that the company’s immediate objectives include continuing to grow at a healthy pace. Part of its growth strategy currently sees SOS Safety International looking into moving to a larger facility, based in Fort Lauderdale, Florida, and measuring some 5,000 square feet. From here the company would look to act as a service centre for hydrostatic service and testing of SCBA gear, which caters to their region’s marine and municipal departments.

“By developing part of our business to deliver service centre style needs we are again going to be meeting a pretty significant demand from the marketplace,” Nieves concludes. “There really is no one else, not

in our sector of the market at least, providing this type of service, especially to parts of the region such as Honduras, Jamaica and other islands. It is for this reason that I can easily envision a scenario where five years from now we will have at least three of these centres up and running, providing yet another revenue stream into the company.”

Nieves finishes our conversation by simply saying that she is excited about the future, and who can blame her?

For more information about SOS Safety International visit: www.sos-safety.com

BE Monthly | 281

282 | BE Monthly

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

BE Monthly | 283

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

BE Monthly | 285

2004 The year that AirTies was established

Philippe Alcaras

286 | BE Monthly

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.

“The company’s strategic intent is to be the market leader for the wirelessly connected home” BE Monthly | 287

“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�

288 | BE Monthly

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

BE Monthly | 289

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

BE Monthly | 291

292 | BE Monthly

Roads Authority of Namibia

The road to prosperity A non-profit, mission driven organisation, the Roads Authority of Namibia is striving to build and maintain a safe, efficient national road network that benefits the entire country

written by: Will Daynes research by: Robert Hodgson

BE Monthly | 293

Roads Authority of Namibia

W

ith its stable, multi- two sister organisations, Road Fund party parliamentary Administrators and Roads Contractor democracy and an Company. Together these three organisations economy buoyed by where tasked with spearheading what was strong agricultural, then known at the Ministry of Works, tourism and mining sectors, Namibia has Transport and Communications Project. a lot going for it as a nation. This fact was Said project was established with a reaffirmed this year when Bloomberg named view to commercialise the functions of the Namibia the top emerging market economy in then Department of Transport in order to Africa and the 13th best in the world. improve the efficiency and effectiveness of Despite the remote nature of much of the the management of road construction and country, Namibia boasts seaports, airports, road maintenance in Namibia. To this day narrow-gauge railways and highways, and is the Roads Authority continues to carry out actively seeking to become recognised as a the tasks it was originally mandated to, to regional transportation hub. the best of its ability.

One of the major players The Authority’s vision of responsible for making this maintaining a sustainable vision a reality is the Roads road sector that meets, and Authority of Namibia. even exceeds, national and The core business of the regional socio-economic The year the Roads Authority is to construct and needs runs parallel to Vision Authority of Namibia maintain the country’s road 2030, a document issued was established sector, while also playing in 2004 that clearly spells a pivotal role in improving out Namibia’s development and maintaining road safety in Namibia programmes and strategies to achieve its along a network that has been ranked among national objectives. In helping to pursue the safest, most efficient and sustainable in Vision 2030, the Authority accepts that it the developing world. In order to achieve has to go beyond its statutory objective of its aims the Roads Authority has adopted managing a safe and efficient network. The several distinct strategic goals. These include result has seen the Authority pursue additional delivering safe, sustainable and efficient improvements to road infrastructure and management of the national road network, road user support systems. improving organisation process, making In its quest to make itself among the very itself a strategic partner and ensuring its own best companies to work for in Namibia, the financial sustainability. need to establish a value driven workforce Fully owned by the Namibian government has been identified as one of the Authority’s under the Ministry of Works and Transport, strategic priorities. Today the Authority the Roads Authority was formed alongside has a well-articulated Corporate Charter

1999

BE Monthly | 295

Roads Authority of Namibia

outlining its Vision, Mission, Values and Brand promise. This, it feels, helps provide a sound base for collective action and synergy toward excellence and optimal performance amongst its workforce.

A further recent development within the organisation has seen the rollout of its “Values our Pride” initiative, which represents a strategic approach aimed to encourage all

members of management and supervisors to lead by example and guide staff to live and enact the corporate values in their day-today working life.

This initiative will be a biannual event during which employees celebrate, reflect and take pride in the Authority’s values. The objectives of this initiative are to establish coherence and congruence between personal

“This year Bloomberg named Namibia the top emerging market economy in Africa and the 13th best in the world” BE Monthly | 297

“To this day the Roads Authority continues to carry out the tasks it was originally mandated to, to the best of its ability” values and the core values espoused by the Authority’s Corporate Charter, for management to “walk the talk” by enacting the values through their conduct, to build synergy and creative co-operation among employees and to raise the level

298 | BE Monthly

of organizational trust and performance throughout the business.

More recently the Roads Authority was successful in completing a new six-point corporate strategy, a part of which has seen it commence with an organisation-wide

Roads Authority of Namibia

rebranding exercise. In the time since it has also embarked on creating a new six-point growth strategy. As part of this growth strategy, the Roads Authority has taken it upon itself to become more responsive to public demands and has begun investing in the revitalization and extension of the country’s road infrastructure.

The growth of said infrastructure and the on-going expansion of the country’s road net work has unquestionably contributed immensely to the economic development of Namibia and the Southern African Development Community (SADC)

sub-region as a whole. Going forward, the road construction projects that the Roads Authority will oversee will be geared towards expanding the road network to the more neglected and marginalised communities as part of the government’s long-term goal of bringing the linked economic benefits to as much of Namibia’s population as possible.

For more information about Roads Authority of Namibia visit: www.ra.org.na

BE Monthly | 299

Namibia Airports Company Limited (NAC)

The sky is the limit Existing at the heart of one of Africa’s most exciting epicentres of aviation growth, it is the vision of Namibia Airports Company Limited (NAC) to become a benchmark service provider in airport operations and management

written by: Will Daynes research by: Robert Hodgson

BE Monthly | 301

Namibia Airports Company Limited (NAC)

S

haring its borders with the is the country’s only international airport Kalahari Desert and the South serving more than 640,000 passengers and Atlantic Ocean, Namibia is one handling 14,000 aircraft movements a year. of the youngest countries in Each of NAC’s other airports all contribute Africa and as such enjoys vast something special to Namibia’s economic potential for future prosperity. Since gaining growth, with Eros Airport recognised as independence in March 1990, Namibia has the country’s hub for general and leisure successful transitioned into a multiparty aviation, Keetmanshoop Airport being the democracy with an estimated annual GDP home of the Namibia Aviation Training per capita of $5,828.

Academy (NATA) and Katima Mulilo Airport Despite the remote nature of the much of representing the gateway to the tropical the country, Namibia is unique in comparison Caprivi region, a huge area of interest for to other developing African nations in tourists, to name a few examples.

A mong it s key that it boasts world-class responsibilities the NAC aviation facilities, with oversees the provision and airports, admittedly many of them unpaved, in almost maintenance of all terminal buildings, check-in counters, every major city.

In the pursuit of building flight information display one of the continent’s most boards, baggage conveyor efficient and advanced belts and sorting systems, Served annually by aviation sectors, Namibia airfield navigational and Hosea Kutako Airports Company Limited visual aids equipment, International Airport (NAC) was created. A baggage trolleys and even public car parking.

100 percent state owned enterprise, which functions autonomously The company’s revenue streams come under a Board of Directors, appointed from two basic sources, these being by the Minister of Works and Transport aeronautical revenue and non-aeronautical in his capacity as the portfolio Minister, revenue. The former refers to the airside and the vision of the NAC is to recognised as aircraft related revenue that is derived from a world-class service provider in airport landing and parking fees, passenger fees operations and management. and ground handling fees. Meanwhile, nonToday the NAC owns and manages eight aeronautical revenues come from landside airports, Hosea Kutako International Airport, and commercial activities such as property Eros Airport, Walvis Bay Airport, Lüderitz and land leases or rents, concessionaires and Airport, Keetmanshoop Airport, Ondangwa motor-vehicle parking charges.

Airport, Rundu Airport and Katima Mulilo The NAC develops and manages its Airport. Hosea Kutako International Airport airports on sound business principles with

640,000 passengers

BE Monthly | 303

Contact us: +26 461 222067/222111

Namibia Airports Company Limited (NAC) due consideration paid to the Windhoek Transfers, Tours and Rentals interest of its stakeholders.

We take you away from your daily routine, to experience a Its main operational truly African Transport/Tours with our friendly drivers. We partners and clientele also organize ‘design-your-own’ private safaris for small comprise airlines or aircraft groups and individuals depending on duration and interest, operators, ground handling for you to discover and experience the timeless beauty agents, gover n ment of our landscapes and scenery and the great variety of indigenous wildlife of Namibia. agencies, private retailers We offer Transport/Tours to the Western, Northern and concessionaires licensed and Southern regions of Namibia for pairs and groups to operate at its airports. throughout Namibia.

A member of the www.namibiatours.com.na International Civil Aviation Orga n isat ion (IC AO), Airports Council International (ACI) and the International Air Cargo Association (TIACA), the NAC is also a national corporate member of the Namibia Chamber of Commerce & Industry (NCCI), and given its central role in the tourism sector, the NAC has representation on the Marketing Committee of the Namibia Tourism Board.

The NAC recognises the need for a strategic corporate focus to better enable it to serve its clients and improve its financial sustainability. The company is guided by a high standard of ethics and integrity in dealing with its stakeholders. Consequently the Airports Company Act, Act 25 of 1998, Namibia’s Vision 2030 and Performance Agreement with the shareholder guide

“Namibia is unique in comparison to other developing African nations in that it boasts world-class aviation facilities” BE Monthly | 305

its strategy, in addition to other industry benchmarks and guidelines.

Key focus areas for the NAC now and for the immediate future include the on-going modernisation of its infrastructure and technologies, achieving both aeronautical and commercial revenue growth, bringing in cost efficient processes and the

continuous development of human capital.

The coming months and years will no doubt also see the company improving further still its impressive corporate social responsibility (CSR) efforts. The NAC has long recognised the considerable role it has to play in the socio-economic growth of Namibia as a whole and as such it has

“The NAC values the importance of developing and maintaining good infrastructure and facilities to maintain world-class standards�

306 | BE Monthly

Namibia Airports Company Limited (NAC)

initiated a comprehensive CSR programme targeting a number of key themes. These include environmental protection, the promoting of tourism, providing educational improvement, industry-related social investment and nation building endeavours.

The NAC values the importance of developing and maintaining good infrastructure and facilities at its airports to maintain world-class standards. In line with its long-term growth strategy, the company has been undertaking several

strategic infrastructure and commercial development projects with the aim of improving its overall service delivery. As these projects are completed they will add yet another dimension to the upward growth of one of the country’s more important industries.

For more information about Namibia Airports Company Limited (NAC) visit: www.airports.com.na

BE Monthly | 307

Size

By approa A

308 | BE Monthly

Forwarding African Transport Services (FATS)

e does matter

employing a multi-disciplined and customer focused ach, FATS has retained its position as one of Southern Africa’s most important freight forwarding businesses

written by: Will Daynes research by: Robert Hodgson & Candice Nice

BE Monthly | 309

Entrance to the offices

FATS

F

ounded in 1992 by sisters Caron communications,” Caron Harris told and Elaine Harris, FATS (the us back in 2012. “We have based our initials stand for Forwarding entire existence over the last 20 years on African Transport Services) has delivering high service levels. We are not been built up from nothing to the cheapest, but our company is founded become a R200 million services company and on the principles of communication and a major player in the South African freight integrity: whether it is good news or bad forwarding industry. news, we will give our customer the news.

A well-established, financially secure, This is a personal service. Customers independently owned freight forwarder, should not have to find out for themselves; the company prov ides permanent it is our responsibility to tell them.”

A number of core values define FATS and employment to 42 individuals. While most freight forwarders do different parts make it stand out amongst its competitors. of the business separately, FATS decided The first of these is superior service, to do them all, making whereby the company it a business that today always strives to surpass specialises in sea freight, its customers’ expectations air freight, road freight, by understanding their warehousing, project and individual needs, and this abnormal f reight and is closely followed by the The year FATS way FATS sets out to achieve customs clearing. Having was established such a wide skill base also excellence based on a set of means the company is best holistic concepts and values. equipped to support its customers from Empowering its people is another key to start to finish as a one-stop operation.

FATS’ success. To achieve this it gives its With efficiency and innovation, FATS employees the authority to make certain arranges imports and exports worldwide. decisions, knowing that in today’s working Its success is due to its dynamic team which world, people perform better if they have a handles every job, irrespective of size, with say in operations. Good communication with the same level of enthusiasm, commitment said workforce has also proven invaluable and and dedication. This allows the company is very much the foundation of the business to compete with all the major freight and it is through its communication streams forwarders across the globe, not only in that FATS is able to continuously emphasise pricing but on service delivery. It also has an that no single person is responsible for its edge over many of its competitors because success, rather it believes that its goals have it has mastered the art of trading in Africa been achieved through integrated teamwork where people’s strengths are combined for which is a difficult and volatile beast.

“The only thing we have to sell is the greater good.

1992

BE Monthly | 311

SHIPPY MARKETING “Shipping without compromise”

Shippy Marketing’s main activities are: • International Road Transporters • Air Freight Forwarding • Customs Clearing • Consulting • Warehousing Shippy Marketing | 34 Hillside Road | Block 45 Msasa, Harare | Zimbabwe Tel+263 4 762973-5 / 700816 Cell: +263 72 424 268 / +263 733 346 994 Email:operations@shippy.co.zw

Seen

Contact us today and put your company in the spotlight!

vincent@bus-ex.com 312 | BE Monthly

FATS’ dedication to people also extends to its social responsibility programme which is heavily involved in the education of women.

FATS supports a self-help centre for unemployed women where they can learn business and life skills. The aim is to empower them to enter the workplace and generate their own income so that they can become strong, independent South African citizens.

Today, FATS’s largest markets remain steel and paper, with the company also involved in project work, which it defines as the handling of abnormal loads, ‘out of gauge’ cargo, large structures and similarly unusual challenges. Paper is imported from Europe to Central Africa, while steel is twoway traffic. Structural steel is exported to China, for example, with specialist metals

FATS

Transporting a bulldozer

“FATS’s knowledge of the continent’s infrastructure, as well as the end-to-end service it offers, represents a premium product” coming the other way. In recent years the company has been moving more towards project work, in areas like construction, energy and strategic investment to Central Africa. Meanwhile, businesses in China are becoming some of its biggest partners.

FATS’s knowledge of the continent’s infrastructure, as well as the end-to-end service it offers, represents a premium product. “We have set ourselves the target

of being a half-billion rand company,” Harris stated during our previous article. “Our BHAG [‘Big Hairy Audacious Goal’] is to get there in two years. Our BAG [‘Big Achievable Goal’] is to get there in three years.”

For more information about Forwarding African Transport Services (FATS) visit: www.fats.co.za

BE Monthly | 313

Crafting comfort and quality Hannitan Leather, under the leadership of Rudolf Hanni, is a tannery manufacturing furniture leather in Springs, Gauteng

T

o appreciate the success and core values of Hannitan one would need to recognize the importance of the Hanni family’s unbroken heritage of producing leather from father to son since 1724. The company crest embodies the history and ethics of consistency and quality the company has been acknowledged for, with the arrows of the father rooster signifying craftsmanship and quality, and the son rooster holding the arrow for innovation.

Hannitan has been hailed by many as one of the cleanest and most efficient tanneries in the world producing an average of 1,200 bovine

“ Hannitan has become a leading supplier to the local furniture industry�

314 | be directory

hides a day. Utilizing the finest quality chemicals in the tanning process, the tannery manufactures a variety of upholstery leathers including aniline leathers, semi-aniline, full grain, corrected grain, buffed leathers and oil pull-ups in an extensive selection of colours. The business has become a leading supplier to the local furniture industry and has recently expanded to exporting fine leathers to the Far East.

Together with leading chemical houses in Europe, it has invested in sending staff abroad for additional training ensuring it remains at the forefront of new trends and technology. The quest for innovation and expertise has enabled Hannitan to be flexible and withstand the pressures and demands on the leather sector.

The company manufactures a HANNI range of leather goods.

Years of training and experience have paid off. This sector strives to merge the traditional methods

Hannitan Leather

of leather craftsmanship with the current, more modern manufacturing processes ensuring a product made with unsurpassed time-honoured quality reflecting contemporary style.

They offer a customized service, manufacturing leather goods for various well-known labels and leading brands. The company produces its own range of leather care products including waxes, silicones and hydrophobic products.

With the ever increasing demand for leather especially in the Far East and China, Hannitan expects to vastly increase its production in the near

future. Almost 300 years of unbroken commitment to producing quality leather will ensure fine leather in the local market and abroad for years to come.

Hannitan Leather 51 Bell Rd, New Era, Springs, Gauteng, 1559 South Africa T 011 817 2150 www.hannitanleather.com

be directory | 315

engineering service

Douglas Simpson Projects (Pty) Ltd Trading as Planet Projects is an engineering company that was established in 1969 and situated in Labore, Brakpan

P

lanet Projects offers services such as the detailing, planning and fabrication of all types of structural steelwork, platework and piping with specialised welding capabilities. We offer a drawing office service which includes the detailing and developing of fabrication items for various industries.

Our company has a production area of 6186 square metres with a production capacity of 850 tons per month.

Planet Projects is an ISO 9001:2008 and OHSAS 18001:2007 certified

“ We are merSETA workplace approved and also accredited as a training institute�

316 | be directory

company and all work undertaken is subject to our Quality Assurance and Safety Processes.

Planet Projects is actively involved in the skills development initiatives to close the skills shortage. We are merSETA workplace approved and also accredited as a training institute.

Planet Projects is participating in the AATP project of which it is a merSETA flagship project in artisan development and other merSETA skills development projects.

Planet Projects is accredited to offer both welder and boilermaker institutional training and we currently have apprentices for both trades.

Our apprentices receive the theoretical training, practical training in a controlled environment and on the job practical training.

Our construction team has the ability to perform site erections and

Planet Projects

construction duties. Our team ensures that all the necessary quality, health, safety, legal and statutory requirements are followed.

We have an internal transportation division ensuring our clients receive on time deliveries at the most competitive prices.

Planet Projects has been involved in a number of large projects such as Great Basin Gold’s Burnstone Mine, Goldfields’ South Deep Mine, Xstrata Coal’s Atcom Mine and Anglo’s Waterval Smelter.

Our company is committed to product delivery and continual improvement to secure client satisfaction.

Our client base includes: • Goldfields • Bateman • TWP Projects • Impala Platinum • Anglo Platinum • Group 5 Projects • Howden Energy Systems • Xstrata Coal • Arcelor Mittel • Bhubezi Projects • DRA • Alstom

Planet Projects Norman Hadiaris (Projects Director) 101 Lumen Street, Labore, Brakpan T 011 738 1700 F 011 738 2721 E norman@planetprojects.co.za www.planetprojects.co.za

be directory | 317

Mining suppliers Princeco Ltd. is a Tanzanian registered company based in Mwanza, Tanzania

P

rinceco Ltd. is a Tanzanian registered company based in Mwanza, Tanzania.

It started its operations in September 2005 as a Procurement and Trading company to cater the growing needs of the approaching gold investors in the country. Princeco selects sources and delivers products and services for the mining, fishing, and the overall corporate sector.

Today it has a product range of over 350 items and more than 30 corporate customers.

“ Today Princeco has a product range of over 350 items and more than 30 corporate customers” 318 | be directory

We are dealers & stockist for Welding Equipments, Abrasives, Personal Protective Equipments, Workwear & Rainwear, Geological & Survey Items, Visibility Products, Fire Equipments, Filters and General Procurement. We have dealership for Lincoln Welding, 3M, ‘Steelblue/Howler/Krusher’ Australian Boots, ‘Dy-Mark’ Mine Marking, ‘Wild Africa’ Workwear, ‘Precious Earth’ Geology & Survey items, ‘Fleetguard’ filters, ‘Norton’ Abrasives. KARIBU SANA! TUJENGE NCHI TANZANIA HAKUNA MATATA! Princeco is always adding new products to its product list to make sure the mining industries and oil & gas industries are served in this country to the best of Tanzania’s ability so that we preserve its opportunities within the country. We are proud to say we have grown and developed our supplies and services to Mining Industries with the

Princeco Ltd

knowledge and support from the foreign investors to an international level. We work with world renowned mines like Barrick Gold Mine, AngloGold Ashanti Mine, Xstrata Nickel and etc. If you are a foreign company looking to invest in Tanzania in the Mining Sector and looking for a local partner do contact us – KARIBU. With the new upcoming of oil/gas industry in the country, Princeco strives to serve this sector as well within the coming years building the requisitions from clients. With Tanzania having abundance resources, we see Tanzania opening up lots of opportunity globally

and locally and would invite many entrepreneurial spirits. Minerals/ oil/gas projects development has the potential to create tremendous value for companies, government & local communities.

Princeco Ltd P.O.Box 1905 Bantu Street Mwanza,Tanzania, East Africa T +255 28 2540790/1 C: +255 784 223007 E: princeco@thenet.co.tz www.princeco.co.tz

be directory | 319