BE.Weekly

ACHIEVING

BUSINESS

EXCELLENCE

ONLINE

BusinessExcellence Weekly

ISSUE No. 59 | www.bus-ex.com

Sturrock-Grindrod Offshore:

Superior African offshore service Catering for the needs of those investing in and capitalising on Africa’s vast oil and gas potential

petrojam:

argex titanium:

Total Namibia:

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

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

Go to page 54 to see this week’s listing To find out how to get involved contact: vincent@bus-ex.com

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

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.

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

Contributors HINT: For the best experience, click the fullscreen icon

David Walton CEO of Bestoutcome Tom Butler & Josef Skoldeberg World Bank Group – International Finance Corporation (IFC) Mining

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. © Copyright 2013 Infinity Business Media Ltd.

BE Weekly

|3

issue No.59

6

6 strategy

time to stop the rot in project management

Organisations are becoming victims of compulsive, blinkered spending on failing projects on a grand scale.

10

10 Q&A

World Bank Group

We talk to Tom Butler and Josef Skoldeberg about the issues facing the mining industry and how ethical, sustainable mining can be the key to alleviating poverty in developing countries.

16

16 Sturrock-Grindrod Offshore

Superior African offshore service General Manager for Oil and Gas, Rob Gardner highlights the ways in which SturrockGrindrod Offshore is helping to cater for the needs of those investing in and capitalising on Africa’s vast oil and gas potential.

4 | BE Weekly

contents

24

24 Total Namibia

A total solution for Namibia

As Total Namibia embarks on the next stage of its development under a new Managing Director it continues to prove its considerable worth to Namibia’s many industries and the country as a whole.

30 Petrojam

A finer refinery for Jamaica

After giving good service for 30 years the Petrojam refinery at Kingston Jamaica needs to be upgraded: it is an urgent job that should be complete by the beginning of 2016.

38 Argex Titanium

On the path to production

30

To compare Argex Titanium to a butterfly emerging from its chrysalis is appropriate: as the Canadian junior exploration company completes its transformation into a top quality supplier to the pigment industry, it is passing milestones monthly, while deftly avoiding risk.

48 Dartel Electricidad The electrical experts

Commercial manager, Claudio QuiĂąones discusses the rich history of Dartel Electricidad, its support of the mining sector and its plans for the future.

BE Directory 54 weir minerals

38

Excellent mineral solutions A long history in mining and engineering.

BE Weekly

|5

Time to Stop in project m

Cancelling a project early and saving mone it. Much more, argues David Walton, who victims of compulsive, blinkered spendi Words by

6 |

BE Weekly

Dav

Strategy

p the rot management

ey is a good thing. There should be more of believes that most large organisations are ing on failing projects on a grand scale

vid Walton

BE Weekly

| 7

F

inancial Directors with high blood pressures should look away now. Project management in most organisations is run by people who have no notion of pulling the plug on something that is certain to end in failure. In fact many of them suffer from what we call Project Mastermind Disorder: they’ve started, so they’ll finish.

No matter what the cost.

The result is that within, say, the FTSE top 250, billions of pounds are wasted every year on projects that should have been stopped at a very early stage because they cannot deliver the business outcomes and business benefits they were originally designed to achieve. The worst thing is that planned costs tend to spiral out of control with these projects, as increasingly desperate but doomed attempts are made to get them ‘back on track.’ This ballooning effect within failed projects is especially prevalent in the public sector.

So, two big questions: why and how does this happen? Then there’s a third: what on earth are we going to do about this unbelievable waste of money and – more importantly perhaps – loss of business opportunity because every failure means a successful programme has gone undelivered.

The problem is that, in most cases, project management is still in the dark ages. It operates around an outdated silo culture of keeping your head down and watching your back, sorting out your problems behind the scenes and not admitting to failure. Spreadsheet reporting and an obsession with timesheets and short term issues are dominant. Thinking outside the box,

8 |

BE Weekly

“Project managers like to report that everything is OK and running smoothly.

And they tend to dislike adopting technology and methodologies that challenge this” putting projects in the context of other projects and spotting deep-rooted problems are counter-culture.

Project managers like to report that everything is OK and running smoothly. And they tend to dislike adopting technology and methodologies that challenge this. Hence the prevalence of large scale self-fulfilling project management systems that demand lots of data input but don’t provide much of a lateral or helicopter view by way of return.

It’s all part of the old school insularity of project management which creates the opportunity for opacity when it comes to highlighting failure. It makes it easier to hide problems in the hope that they can be dealt with behind the scenes. Often these little problems fester unresolved or unseen and are allowed to develop into full scale crises before they come out in the open. And that’s when good money starts being showered after bad.

The solution isn’t that complicated and it does have the advantage of making blatantly obvious business and financial common sense.

All large programmes involve many

Strategy

different interdependent projects.

Some of these are especially important because they have a direct impact on the success and timetable of others.

There are also many issues, such as resource planning, that need to be monitored and managed across all projects. Finally, it’s crucial that all projects are looked at from the perspective of the outcome they were originally established to achieve. This issue should be closely and constantly tested. Is this project or group of projects going to deliver the business outcome that’s required? If not, then it should be terminated immediately.

This helicopter, strategic view of projects should be run through a separate Portfolio Management Office. It should take responsibility for monitoring project inter-dependence, resource management and pouncing on problems before they are allowed to develop. It should also be there to enforce the adoption of a project management methodology across the portfolio that is totally transparent and focused on outcomes.

One of the key mechanisms within the Portfolio Management Office is a system of quality gates or checkpoints which every project should pass before

it is allowed to proceed. In a nutshell, these gates are effectively tests to check the viability of projects. They are there to ensure that key deliverables have been produced on time before the project can be allowed to proceed.

So how many quality gates should there be? One of Bestoutcome’s automotive clients uses 18 toll gates to manage its complex engineering programmes.

Other clients running IT projects tend to use between four and eight gates.

Bestoutcome’s own outcome driven project management framework has seven gates for most programmes. The simple answer is that there should be as many gates as are needed to guarantee that failing projects will be spotted early and closed down or restructured.

Quality gates and the establishment of a Portfolio Management Office do not in themselves guarantee success. However, they do cut through the sub-culture of box ticking and opacity that pervades traditional project management. It shines a light through the whole process and in so doing massively reduces the risk of ongoing investment in certain failures.

In other words, waste.

Financial Directors, you may resume reading now.

About the author Bestoutcome specialises in complex change management for large organisations operating in sectors such as retail, finance, manufacturing and the public sector. Its approach is based on delivering specific business outcomes within a uniquely transparent, risk managed and open framework. This is achieved by using highly experienced consultants combined with PM3 - an elegant, flexible, toolset - and ODPM, an outcome-driven methodology. Bestoutcome’s starting point is always the same: the client’s ultimate business goal. And it never loses sight of this. www.bestoutcome.com

BE Weekly

| 9

Q&A

World Bank Group International Finance Corporation (IFC) Mining We talk to the Global Head of IFC Mining, Tom Butler and IFC Communications Officer, Josef Skoldeberg about the important issues facing the industry today and how ethical, sustainable mining can be the key to alleviating poverty in developing countries Words by

Will Daynes

BE Weekly

| 11

From your position within the IFC, what is your perception of the global mining sector today?

Butler: Obviously the industry today is facing a lot of pressure when it comes to the commodity downturn that we have seen and the subsequent need to cut costs and shelve a number of projects because of the market environment. From my perspective within the IFC, I think for the most part the industry has shown in recent times that it understands the need and importance of having what has been called a social license to operate, and this means conducting activities in a way that is acceptable from an environmental and social perspective. Whereas some 10-to-15 years ago a large number of companies would have admitted that such issues would not be high on their

list of priorities, today the vast majority have made it a top priority – many are getting it right on environmental matters – that is what engineers are good at, and mining companies are full of engineers - but on social aspects and community interactions, many companies are still struggling to get it right.

How would you define the IFC’s role in the mining sector today?

Butler: Today we are involved in some really big landmark transactions, which will significantly impact the host countries when they finally start producing. That is one strand of our business and it is a key strand for us to be involved in. The other strand of our business is what we call our Early Equity Strategy, which is to invest in junior mining companies that are still in the exploration stage and that is something we have built up in the last six or seven years.

We only used to look at financing projects at a construction stage, whereas now we are engaging at a much earlier stage with companies, working with them to help get the environmental, social and sustainability aspects of their business right so that by the time they get to construction they have got a project that has the best possible social licence to operate.

In its role of adding value to clients in the mining sector, how does the IFC approach individual operations and is this there a set of criteria you look for in a project before becoming involved?

Tom Butler

12 |

BE Weekly

Butler: IFC is the private sector part of the World Bank and in many ways we

Q&A

“One of the main things we do is run an annual event called the IFC Sustainable Exchange where we try to facilitate an exchange of information, knowledge and ideas� act like a commercial bank, with the difference being that we are prepared to go to places that a typical commercial bank may not interested in going. So the first thing to say is that any project we look at has to make sense from a commercial point of view, we are not a provider of soft funding or subsidised funding. The second thing we look for is sponsors, ownership and management who are committed to implementing our performance standards, which basically govern the environmental and social approach to a project and to developing the project in a sustainable manner.

There are lots of definitions that can accompany the word sustainable, but to my mind it means in a way that will maximise the positive impact of the project for all stakeholders.

What would you identify as some the of bigger challenges that mining companies are facing today?

Butler: What a number of companies are struggling more with is the social dimension of their operations. We have found that the expectations of local communities to be engaged are increasing, largely as a result of the globalisation of communications and the fact that people have instant

access information and events connected to mining on the other side of the planet. This means that a lot of companies constantly have to play catch up with just how fast the world of communications is evolving.

We are putting a lot of effort towards this particular issue and are working closely with our client companies to make them aware of the importance of getting the communication aspect of their business right.

How exactly are you helping your client companies overcome this particular issue?

Skoldeberg: One area that mining companies are starting to focus more on is going beyond communicating with their staff, consultants and stakeholders, and ensuring that things can be communicated back up within the business itself. We help our smaller clients establish the processes and strategies for communication with their stakeholders that are appropriate for their size, and the business phase they are in. When it comes to our larger clients we take a look at how they are approaching the idea of communications in general and then offer any advice and assistance. We are also working on some studies on trends and best practices in

BE Weekly

| 13

communications with partners in the mining industry that we hope to complete in the fall of 2013.

issue has been dealt with elsewhere with the aim of reaching a positive conclusion for all parties.

The demand for mining companies to prove that they can conduct their operations in an ethical and responsible manner has arguably never been greater. Have you been encouraged by what you have seen from said companies when it comes to addressing these issues?

You touched on the concept of sustainability earlier and this is another core theme today.

How is IFC helping to facilitate positive developments in this area of the industry?

Butler: I think most companies do understand the importance of these issues, most companies are saying that they are doing it and most are actually getting it right on the environmental side. Where I see a number struggling however is on that social side of things that I mentioned previously, as this can be because the necessary cultural change within a company takes longer to be implement or simply because achieving the commitments made by top management can be extremely difficult in a short space of time. Where IFC stands in all this is that we have a huge amount of experience of, and exposure to, a range of global issues and such we have the ability to look at a particular problem for a company in one location and highlight examples of the way that

Butler: One of the main things we do is run an annual event called the IFC Sustainable Exchange where we try to facilitate an exchange of information, knowledge and ideas. Through such gatherings and our work in general we are able to witness common themes across the industry. One such theme is the issue of water management, particularly in dry countries like Chile, in Mongolia where there is a water shortage and in countries like Peru where local communities fear that mining projects will negatively impact their own resources. One of the ways we are trying to help companies work through these issues is by exercising what we call our convening power.

Because of who we are we are able to convene discussions and working groups on these kinds of issues. We have got a multi-company group in Mongolia for example that is trying to work through

“The reason that the World Bank Group supports the mining industry is fundamentally because in a number of countries mining is the key to alleviating poverty and that is the core, underlying mission of the World Bank Group�

14 |

BE Weekly

Q&A

how to deal with the issues around access to water, communications around how much water a project will use and how much this will impact on the community.

Further to that, how would you describe the IFC’s agenda for the immediate future when it comes to mining related activities?

What do you feel will be one of the bigger issues facing the mining sector in developing countries in the coming years?

Butler: The reason that the World Bank Group supports the mining industry is fundamentally because in a number of countries mining is the key to alleviating poverty and that is the core, underlying mission of the World Bank Group. In a large number of countries mining is indeed going to be key to achieving that because the fiscal flows to government generated from a successful mine can be hugely significant. Therefore our continued priority will be to support mining projects in these developing countries where mining can really make a big difference to the lives of everyone.

Butler: One of the top issues which the G8 has decided to focus on this year is transparency within the industry.

While it is fair to say that a number of companies have taken a lead by voluntarily disclosing the nature of the contracts agreed with governments, there will certainly be a bigger push to this transparency to become much broader.

This will require developing countries that have big extractive industries to be much more open about what is being signed up to, what kind of payments are being received from mining companies and what that money is being used for.

We will hear even more about this in the next few years.

For more information about International Finance Corporation (IFC) Mining please visit: www.ifc.org/ogmc

BE Weekly

| 15

Superior African

offshore servi

General Manager for Oil and Gas, Rob Gardner highligh which Sturrock-Grindrod Offshore is helping to cater for those investing in and capitalising on Africa’s vast oil an

written by: Will Daynes research by: James Boyle

16 | be weekly

Sturrock-Grindrod Offshore

ice

hts the ways in r the needs of nd gas potential

be weekly | 17

Checking refinery

Sturrock-Grindrod Offshore

U

ntil as recently as 2010 it appeared that all southern African countries had to offer in terms of oil and gas were scattered pockets of natural gas off the coasts of South Africa and Mozambique.

The event that changed this perception was the discovery of a potential 500 trillion cubic feet of gas across South Africa and Mozambique, in addition to an estimated eleven billion barrels of oil in Namibia.

Founded in 1969 as both a shipping agency and clearing and forwarding company, Sturrock Shipping, was until its merger with Grindrod, one of the largest, privately owned shipping and logistics companies in South and East Africa. Based in some of Africa’s fastest developing nations, including Ghana, Angola, Namibia, Kenya, Tanzania, Mozambique and Madagascar, the company specialises in providing a full supply-chain service for the handling of sea transport and the import and export of goods into and out of sub-Saharan Africa.

“Since we spoke almost a year ago,” begins General Manager for Oil and Gas, Rob Gardner, “arguably the most significant development on the oil and gas side of the business was the bringing together of Sturrock Shipping and Grindrod Ships Agencies, a business with more than 100 years of operating within southern Africa and a vast portfolio of assets behind them, from their own fleet of vessels to warehousing, terminals and container depots.”

What the bringing together of these two entities has done is not only create a much stronger and more diverse ships agency operation, but also provided the company

be weekly | 19

Vessel support

formally known as Sturrock Shipping with an injection of capital, infrastructure access and a plethora of diverse service offerings and know-how.

“Today,” Gardner continues, “we boast a presence in eleven African countries which, if you look at most of the other large branded ship’s agencies, gives us an unrivalled subSaharan footprint. By employing local people in these countries and combining

their hands-on skill and local expertise with the more specialised international shipping and offshore expertise that the group offers, we are reaffirming ourselves as a truly African company that possesses the ability to offer first world services and expertise wherever it is required.”

In addition to actually being able to boast that it has a physical presence on the ground in some of Africa’s most important

“We are reaffirming ourselves as a truly African company that possesses the ability to offer first world services and expertise wherever it is required” 20 | be weekly

Sturrock-Grindrod Offshore

Mputo Port aerial

Overseeing work taking place

markets, Sturrock-Grindrod compared to those of a decade Offshore also has the or so ago, has contributed unique ability to offer significantly to more and several different types of more businesses looking service that few, if any, of to our shores to explore for African countries in its competitors can match. oil and gas, specifically in which Sturrock-Grindrod These include the ability places like Namibia, Kenya, is present to service and replace life Madagascar, Mozambique rafts on vessels in remote and Madagascar where African ports as part of its drilling is currently on-going. role as exclusive agents for the company Couple that with the improved technology Survi-Tech and to handle the supply and and the ability to explore at greater depths transportation of pyrotechnics, something and you can see the great level of potential which can be a technically challenging that we have here.” and time consuming task for a customer.

In addition to this potential there is also “I think it is fair to say,” Gardner states, the tremendous physical infrastructure that “that the favourable nature of Southern the country has, and will have, at its disposal.

Africa’s exploration laws today, particularly At Saldanha Bay, for example, a huge amount

11

be weekly | 21

of funding has been allocated to develop what will be an exclusive oil and gas facility, one where the deep water draft is capable of accommodating the next generation of rig ships, as well as shallower facilities for traditional jack up rigs.

This type of infrastructure investment also bodes well for the country’s long term future in other areas linked to the oil and gas sector. “With the work that we have on-going

in places like Saldanha Bay,” Gardner says, “it also provides the opportunity for companies like ours to take on greater amounts of ships agency work in the fields of ship repairs, maintenance and the repatriation of crews and auxiliary vessels related to the industry.”

As optimistic as the future appears for South Africa, Sturrock-Grindrod Offshore is equally as keen to prosper in markets further afield. “While we have all this know-how and

“We look at Africa and our goal is to be the recognised company here when it comes to oil and gas related services”

Oil rig

22 | be weekly

Sturrock-Grindrod Offshore

Rob Gardner, General Manager for Oil and Gas

expertise down here in South Africa,” Gardner highlights, “we realised the need to expand some 15 years ago and whilst we already have an extensive and well-established subSahara African footprint in place, our goal is to cover as much of Africa as possible. While Africa remains a predominantly commodity based economy, the signs are that this could be changing thanks to the well-publicised oil and gas finds in countries like Mozambique.”

It is obvious that Sturrock-Grindrod Offshore shares the view that Africa is a hugely dynamic area, yet more importantly it is clear that the company believes itself to be well positioned to grow with it in the years to come.

“If you look at the management structure of Sturrock-Grindrod,” Gardner concludes,

“you will see it is a young, highly driven team. We look at Africa and we believe we know this market and our goal is to be the recognised company here when it comes to oil and gas related services. What we want is for companies coming into the market to say to themselves that, if they want to prosper, they need to be talking to us, because we are the guys who have people on the ground, the agency crews, the logistical staff, and the supply chain staff. These are all highly qualified, dedicated people and it is they who help keep us at the top of our game.”

For more information about Sturrock-Grindrod Offshore visit: www.sturrockgrindrod.com

be weekly | 23

Total Namibia

A total solution for Namibia As Total Namibia embarks on the next stage of its development under a new Managing Director it continues to prove its considerable worth to Namibia’s many industries and the country as a whole

written by: Will Daynes research by: Candice Nice

24 | be weekly

Total Namibia

H

aving had an established name has become synonymous with. presence in the country since Namibia has declared Vision 2030—the 1968, Total Namibia first date by which it wants to be considered as opened its doors in 1977. a developed economy. To achieve that, its Today the subsidiary of the infrastructure, particularly its port at Walvis continent’s leading petroleum marketer Bay and its railways, will require significant has a total of 28 service stations across investment. For its part Total will play a Namibia, 77 commercial sites, five sites crucial role in helping Namibia to achieve its located within its national parks and four long term target, specifically where it relates depots, which are found in Windhoek, to its own infrastructure in the country.

Otavi, Gobabis and Walvis Bay. In addition, Total Namibia also supports the While Total has always been a well- government’s skills development programme, established player in the retail fuel market, offering on-going training to staff, contractors supplying individual vehicle owners, and emerging entrepreneurs. Furthermore, it small business enterprises, continues to sponsor bursaries government vehicles and and offers an in-house internship programme. the agricultural sector, the organisation has made In this regard Total particularly strong strides Namibia continues to work in Namibia to tap into diligently to upgrade all of Service stations the its evolving commercial its facilities to bring them company has across sector, particularly the into line, and subsequently Namibia mining industry. above, its own Total Group It goes without saying safety and environmental that in the mining sector, machinery and standards. Such has been the collective equipment utilises all requires specialised effort of the company that it will not be very lubricants, greases and oils, all products that long at all now before all of its facilities and Total has a long track record of supplying infrastructure comply with not just its own across Africa. In engaging the market, internal requirements, but with the very Total Namibia has worked hard to secure highest of European standards.

OEM contracts on the back of such supply In late February of this year the company contracts that it already held, with the likes held a special event to two significant milestone events. The first was in recognition of Toyota for example.

In pushing forward with securing OEM of the inauguration of its N$10 million contracts, Total Namibia’s game plan has Ondangwa “Kings” Total Service Station. been to regularly engage companies and The opening of the station marked the launch expose people and perspective clients to the of a new environmentally friendly look for standards and best practices that the Total the business, one that will ultimately see it

28

be weekly | 27

Stowe Holdings Stowe Holdings is a supplier of Innovative services related to Fuel Management Solutions & Site Systems architectures in the African Fuel and Energy Market since 1990.

Stowe specialises in Site System Automation, including Systems Integration, Equipment and Software Procurement, Asset Warehousing, Supply-chain Management, 24 hour Helpdesk, Support and On-site Maintenance.

With its strategic systems-partner accreditation structures in place, Stowe remains unique in its ability to

service our customers’ networks of site systems technologies, no matter what the architecture, make and/or model of such solutions. As a results our customers enjoy unparalleled value & services that cannot easily be matched in the very specialised field of fuel management systems and site automation.

We are proud to associate ourselves with some of the biggest names in the Petrochemical market-place, such as Total who are as committed to Service Excellence as we are” www.stowe.co.za

www.stowe.co.za

Total Namibia

revamping each and every one of its filling stations in Namibia.

This strategy embraced the T-Air global concept that first arose in April 2012. T-Air is an abbreviation of “Total Amelioration de l’image reseau” which means “Total Improvement of the Network’s Image’. From an aesthetic point of view T-Air utilises natural colours, environmentally friendly materials, low energy buildings, underground fuel storage facilities and water that is being harvested and recycled to reduce their carbon footprint. This roll-out of Total’s new look service stations is being executed through the world. Its aim is to provide the network with a well-defined identity, one that is based on a more modern brand image, with service stations that are better integrated into their landscape.

The event in February also acted as a farewell for the man who oversaw the opening of the “Kings” Service Station and the start of the T-Air rollout, outgoing Managing Director Seggy Kistasamy. Having led Total Namibia into an exciting new period in its development as a business, Kistasamy has since handed over the reins to the new Managing Director, Chris Hoffmann. Having previously headed up Total’s operations in Lesotho, Hoffmann is now taking the company forward into a new era, one driven by his own ambitious objectives and plans for Total Namibia.

For more information about Total Namibia visit: www.total.co.za

be weekly | 29

A finer refinery

for Jamaica After giving good service for 30 years the Petrojam refinery at Kingston Jamaica is to be upgraded

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

30 | be weekly

Petrojam

be weekly | 31

Petrojam

P

etrojam is a limited company in the world), has a rated capacity of 38,000 jointly owned by PDVCaribe, barrels per day (bpd) and an average daily a subsidiary of Petróleos de output of up to 35,000 barrels. Increasing Venezuela (PDVSA) which owns its capacity has clearly been needed for 40 percent of its shares, and a long time. In fact the refinery upgrade the Petroleum Company of Jamaica (PCJ). project evolved out of a memorandum of Petrojam was established in 1982 when understanding signed in August 2005 between the Government of Jamaica purchased the PJ Patterson the Jamaican prime minister at Kingston Refinery from Esso, which had the time and President Hugo Chavez, with an built and operated it since 1964. Put simply, expected 2010 completion date.

Petrojam’s job is to supply refined products to However despite the fact that the front the people and businesses of Jamaica. end engineering design (FEED) for the $1.3 As Jamaica’s primary energy company billion Refinery Upgrade Project (RUP) Petrojam now has the was completed in 2009, responsibility for managing the project was stalled by its key asset, the refinery, and changing political priorities manufacturing cost-efficient, on the part of the Venezuelan high quality products to government. But now the RUP has been brought back ensure an uninterrupted to the front of the queue. supply of energy to keep the nation on the move and Last year, in a filing to the Planned investment in US Securities and Exchange working – it is a vital part of refinery Commission (SEC), the the island’s economy. Among the services that rely on Venezuelan government said Petrojam are the supply of aviation fuel for that PDVSA has brought forward the start the airlines that fly in and out of Jamaica, date of the Jamaica project to 2014, a year bunkering for the ships that use its ports, earlier than previously expected.

The plan is to increase production at the supplying power generation plants and providing a reliable supply of affordable lead Kingston refinery from 35,000 to 50,000 bpd, and the urgency of the project was underlined free petrol and diesel to the filling stations.

The Jamaica government benefits from by Jamaica’s Energy Minister Phillip Paulwell agreements with Venezuela and Mexico under in May when he claimed the Petrojam plant which feedstock – crude oil – is supplied to could face the risk of being shut down if the the refinery. Negotiated in 1983 the current necessary works were not undertaken. The conditions of the San Jose Accord ensure the cue to its moving back to the top of the agenda supply of 29,000 bpd of crude. The Petrojam is Paulwell’s discussion with Venezuelan refinery, located on a 76 acre site on Kingston counterparts at this year’s PetroCaribe summit Harbour (the seventh largest natural harbour in June, following which he announced the

$1.3

Billion

be weekly | 33

Beyond Safety.

SolutionS oriented.

• Established in 1991 • Committed to providing quality products and service for the safety and protection of our customers, their employees, their facilities, and our environment • Region - Supporting the Caribbean and

Latin America countries.

Products and Services provided: • Firefighting Equipment • Hose Products • Personal Protection • Oil Booms • Belting Products • Fire Apparatus • Remediation

T: 561 237 4247 | E: info@sos-safety.com www.sos-safety.com

Seen

Contact us today and put your company in the spotlight!

vincent@bus-ex.com

Petrojam

agreement with Venezuela that the Petrojam Jamaica, monitors product quality on a oil refinery expansion and upgrading project 24-hour basis. Staffed by specialist technicians who test, analyse and certify products against would again become a priority.

The refinery was originally built, using a internationally recognised standards, the lab simple hydroskimming model, using modern is at the heart of the operation. It also offers optimisation principles in its design, and in commercial testing to third party clients for general that has proved fit for purpose over octane levels, water and chemical analysis, the years. However the equipment and process and particulate levels in fluids. It is also able streams do need upgrading, to monitor dust, lead and CO and this investment is also a levels in the atmosphere.

Another area of best vital part of the project. The practice is to be seen refinery is a very competent facility, staffed by qualified in Petrojam’s logistics personnel and with some arrangements. Within the excellent ancillary facilities. plant a small but effective For example its laboratory, team is responsible for the Upgraded capacity of the only fully equipped economic evaluation of Petrojam refinery petroleum laboratory in incoming feedstock. The

50,000 BPD

be weekly | 35

team co-ordinates crude oil imports, marine transportation of crude oil and finished products for export as well as to domestic customers. Delivery by sea is cheaper and safer than road transport. Refined products for the Montego Bay Terminal and supplies to large volume customers such as the light and power plants and bauxite companies are delivered by sea using Petrojam owned and chartered vessels, operating from the company’s berth in Kingston Harbour.

The next task is to update the FEED report to base it on more up-to-date figures than those available in 2008. Once that is done the real work can progress, and, as Mr Paulwell says: “It will enable us to produce those things that we use in Jamaica — LPG, gasoline, and low sulphur diesel — so that we will be almost selfsufficient, and be able to export some of it,” he said, pointing out that the by-product, petcoke, will enable the generation of 100 megawatts of cheap electricity. Upgrading of the refinery will ensure its viability in the long term and allow for the installation of treatment facilities to meet new environmental specifications for diesel oil and gasoline.

One of the many outstanding programmes of personal development that Petrojam pursues is its youth development programme.

In particular its Summer Employment

Programme, which each year selects 100 or more secondary and tertiary level students to undertake paid work and training during their long vacation. The objective is to give these students a taste of what it is like to do a real job in an industrial enterprise, and how they can gain satisfaction from adding real value to Petrojam by working on active projects.

Some of them subsequently join the company explains Production Manager Telroy Morgan, a

“If our upgrade is done in short order, Jamaica would be the only Caribbean country using and selling ULSD fuel, apart from the French countries” 36 | be weekly

Petrojam

key motivator for the students, but that is not by any means the sole object of the programme. “A number of students come back after the Summer Employment Programme and grow into key roles with Petrojam: the others get invaluable experience here and go on to contribute to the growth of the nation as a whole.”

Telroy Morgan should know: he himself came into Petrojam via this route and now occupies an important management position.

He is not alone, and the enthusiasm of the student cohort for the scheme is palpable: they are exposed to a variety of different disciplines from highly technical roles and engineering to admin and management experience that will stand them in good stead in any business.

The target date for competing the refinery upgrade project has now been set for January

2016, giving Jamaica a world class facility capable not only of producing the quantity the island needs but of supplying it with new and improved products such as the ultra low sulphur diesel (ULSD) fuel that was launched in Jamaica on June 25. “If our upgrade is done in short order, Jamaica would be the only Caribbean country using and selling ULSD fuel, apart from the French countries,” said Phillip Paulwell – this is important as only countries that can supply USDL are able to import diesel vehicles equipped with advanced emission control.

For more information about Petrojam visit: www.petrojam.com

be weekly | 37

38 | Be weekly

Argex Titanium

On the path to production The Canadian junior exploration company completes its transformation into a top quality supplier to the pigment industry

written by: JOhn O’Hanlon research by: James Boyle

Be weekly | 39

J

unior mining companies are feeling the chill these days, and have been under pressure for over a year, so it is heartening to find one whose neat footwork has turned the situation to its advantage. Over the past year Argex has advanced its plan to convert its focus from mining to production of Titanium Dioxide (TiO2), a commodity that is sure to grow in demand as the world emerges from recession, because its sales in any particular market shadow GDP with uncanny accuracy. It is a key ingredient in paint, as well as in many pharmaceuticals, plastics and paper, having unique properties of opacity and whiteness.

Wearing its mining hat, Argex accumulated a portfolio of properties in Quebec that provide it with a source of ilmenite, the ore from which TiO2 is derived. In 2009, it acquired La Blache together with an iron ore project called Mouchelange on the north shore of the St. Lawrence River, and in 2012 added another interesting property called Lac Br没l茅. These properties, it was thought, would provide feedstock for a process of beneficiation if a suitable technology could be found to produce high grade TiO2 from ore containing contaminants, or penalty metals as they are known, that are intractable in the traditional processes the industry is used to.

The company accordingly worked in partnership with Process Research Ortech (PRO) to develop a proprietary mineral extraction process that allows for the production of 99.8 percent pure pigmentgrade TiO2, which can be sold to the end-users in the paint, plastic and coating industries.

The CTL process has significant advantages

40 | Be weekly

Argex Titanium

over current processing methods: it has a very low environmental impact, operates at atmospheric pressure, does not require high temperatures and produces saleable by-products. “The comparative risk-profile for scale up with this technology is really very low,” says Roy Bonnell, Argex Titanium’s president and CEO. The last year has been a busy and a productive one for Argex. The raw material for the process, ilmenite, is readily available and Argex has been exploring the idea of treating commercially available ore bodies in addition to that from its own properties.

One of the things that makes Argex different, and endears it to shareholders and analysts alike, is its approach to risk. “Commercial sourcing was attractive because it meant that in starting our plant we wouldn’t have to have two different capital projects going on at the same time. Here in Quebec, developing a mine can be a lengthy process so to be able to have cash flow earlier in the economic model creates a lot of present value for our shareholders.”

The deposits treatable with Argex technology may contain penalty metals such as vanadium, or magnesium oxide that make them undesirable for other producers. With the CTL process all by-products are saleable,

and as many of the sources Argex has identified contain levels of ilmenite that can yield up to three times as much product per tonne than that from La Blache, taking this route made a lot of sense. “We have taken a risk mitigation approach to management. And as a result, in a difficult market for juniors, we performed relatively well last year.”

Argex Titanium’s business model was given additional support in July 2013 when

“By this time in 2015 we expect to be reporting on the plant in production, shipping its high quality product into an expanding market” 42 | Be weekly

Argex Titanium

it announced a $10 million infrastructure, is crucial, Bonnell says. private placement with 2 Investissement Québec, and Valleyfield is an ideal a US-based investment fund location, an industrial site The size of the recently manager which already already occupied by major acquired Salaberry-deholds Argex shares. “The chemicals companies that Valleyfield plant Quebec government is proud can support Argex’s supply to support this strategic chain. It is well served by air, road and shipping links, investment project, which will have substantial economic spin-offs is close to gas and electricity supplies, and for the Montérégie region,” said Québec’s has a pool of experienced workers. “Even the Minister for Industrial Policy Élaine Zakaïb. community college is focused on producing The funds will go towards developing the chemical technicians,” he enthuses. “We feel 235,000 square foot plant it has acquired at we fit in there.” Getting Valleyfield up and Salaberry-de-Valleyfield that will be home running is now a priority. The first step is to to its first full-scale TiO2 plant. And it’s not move the pilot plant, which has tested the new just the money: government support for a process on a variety of differing ore bodies, project like this, which depends heavily on from Mississauga just outside Toronto to the

235,000 FT

Be weekly | 43

“In the coming year, you will see our further evolution to becoming an emerging producer of a speciality chemical and more an engineering company than a miner” Valleyfield site. This is important because it will mean this vital research facility will be on-site, able to train the people who will be working on the full size plant.

At the same time, the company is working with its engineering partner Genivar on a bankable feasibility study (BFS) that will make the economic case for the plant, as well as outlining the engineering aspects including plant layout, equipment required

44 | Be weekly

and workflow. The results of the BFS should be available in September, demonstrating the potential game-changing nature of the CTL process, and placing Argex in a position to evaluate partnership opportunities, engage in detailed construction engineering work and start hiring suppliers. Bring it on, says Roy Bonnell, who wants to see first production in the first quarter of 2015. I am doing my best to hold the engineers’ feet to the fire!”

Argex Titanium

There will always be bumps in the road, but the scalability of the company’s process, compared to many other metallurgical processes, is not particularly difficult. Indeed this was why the company chose to occupy an existing building, already laid out as a chemical facility, rather than build from scratch. It is another risk-reducing factor, he says, not least because you don’t want to be waiting for concrete to set in Canada’s winter! The process itself is hardly action packed, consisting mainly of leach tanks and settlers: it can be described as – well, boring.

But that gladdens his heart. Boring means low risk. “We tested around ten different feedstocks, and found we could use any one of them. One that we have been using and will probably start with is high in only

one penalty metal.” Yet another prudent approach – having to deal with just one rather than three or four limits the risk of problems in the startup phase, he says.

By this time in 2015 we expect to be reporting on the plant in production, shipping its high quality product into an expanding market. The market fundamentals are promising, he points out, with the US economy rising out of recession and construction readying itself for activity following a period where projects were put on hold. It will be pigment’s day again and prices are predicted to rise with demand, which as we have noted tracks GDP. An interesting statistic is that annual per capita consumption of TiO2 in the USA is eight pounds: in China and India it is two. The global market for the higher

Be weekly | 45

Argex Titanium quality CTL product with its outstanding light reflection qualities, as opposed to the lower performance chemical resulting from the sulphate process, will inevitably grow alongside living standards.

In that case, Valleyfield will come on stream just at the right moment. “In the coming year, you will see our further evolution to becoming an emerging producer of a speciality chemical and more an engineering company than a miner.” The R&D centre will be up and running at Valleyfield well ahead of the main plant, which will employ around 100-150 people. It will be a showcase facility, Bonnell says, and a model for other plants Argex might build in the future in locations that have lower energy costs.

However for the time being, his policy of cutting risk to the bone is paying off.

Appropriately, at the end of June 2013, the company signed a purchase agreement with the company it has collaborated with since 2011. PPG is the largest paint company in the world, and its confidence not only in the process but in Argex’s strategy and ability to deliver is as important as the deal itself. It establishes Argex in the market as a company that is doing real cutting edge work. “We will continue to align ourselves with blue chip companies like that. You are judged by the company you keep, and I think it is important as we establish ourselves that we are seen in alliance with people like PPG.” For more information about Argex Titanium visit: www.argex.ca

Be weekly | 47

The electrica experts Commercial manager, Claudio Qui単ones discusses the rich history of Dartel Electricidad, its support of the mining sector and its plans for the future

written by: Will Daynes research by: Louisa Adcock

48 | Be weekly

Dartel Electricidad

al

Be weekly | 49

Dartel Electricidad

W

ith a total of eleven possesses, thanks to the length of time that branches spanning the it has been around in Chile, is an unrivalled length and breadth degree of knowledge and experience that its of Chile, Dartel competitors can only dream of having. It is Electricidad is dedicated this expertise that has seen it take on the role to the distribution and marketing of some of of product distributor for all manner of vital the most famous and prestigious national and projects including industrial illumination, international electrical brands. These brands automation and power distribution. and solutions meet the high, medium and low “The mining and construction sectors are voltage needs of Dartel’s customers within the the two principle markets that we have grown industrial, fishing, construction, engineering, with most significantly in recent times and we telecommunications and mining sectors. have no doubt that this trend will continue,” “We have been present in the Chilean Quiñones explains. “In the last year alone market since 1970 and were the first company the mining industry experienced exponential of its kind to set itself up to growth here in Chile and this service the growing mining too we expect to remain the market in this country,” case. What this often results states commercial manager, in as well is the growth Claudio Quiñones. “Through on the construction sector the distribution of brands and both are intrinsically The year Dartel first like Legrand, Siemens, linked to the expansion of became established the country as a whole.”

3M, Lovato Electric, Parker in Chile With copper accounting for and Schneider we are more than 40 percent of all today involved throughout the entire mining process, specialising of Chile’s annually exported goods it stands in a number of specialised fields such as to reason that a company like Dartel would automation solutions.” continue to target the mining sector will all According to Quiñones, the principle its available resources and strengths, and strength that has served Dartel so well over as Quiñones highlights this is undoubtedly more than four decades of existence is the the plan. “All the signs point to the fact high quality service it delivers to its customers. that the mining market in the country will Dartel’s commitment to providing its customers continue to expand and will do so for at least with the required products and solutions the next five years or more.”

That is not to say that the market is not quickly and expeditiously is one that exists throughout the company and is ingrained in without it challenges. “The unfortunate the minds of its almost 400 employees. reality,” Quiñones continues, “is that with In addition to a strong desire to meet the the cost of copper today being relatively low consumer needs of its clients what Dartel also we have had to begin looking towards other

1970

Be weekly | 51

potential fields of growth, for example the industrial markets that exist in the South of Chile. When we have low copper prices that result is usually that mine operators

scale back on certain high-cost projects and clearly this has an effect on us. Where we prosper is in the fact that our knowledge and experience allows us to be present in a mix

“The principle strength that has served Dartel so well over more than four decades of existence is the high quality service it delivers to its customers�

52 | Be weekly

Dartel Electricidad

of industry sectors all at one, meaning that we can weather any negative trends in one sector by focusing on others.”

Being willing and able to develop the way it operates in Chile is clearly a hugely important trait for Dartel to possess. It is also one that will be of great use as the company looks to the next stage of its growth.

“One of the things we are examining,” Quiñones concludes, “is the possibility of expanding our presence into another country at some point in the future. While we are a

national company, and are hugely proud of that, we are not blind to the opportunities that exist in sectors like mining in neighbouring countries such as Peru and Bolivia. While such talks are at a very, very early stage we are definitely laying down the groundwork for what is our long-term vision for Dartel.”

For more information about Dartel Electricidad visit: www.dartel.cl

Be weekly | 53

Excellent Minerals Solutions

Weir Minerals has a long history in mining and engineering

T

he Weir Engineering firm was established in 1871 by brothers, George and James Weir. In 1996 the Weir Group expanded their Weir Minerals division’s offering, to the African market with the acquisition of Envirotech, which originally opened their doors in 1909 as Denver Machinery and again in 2008 with the acquisition of the CH Warman Pump Group, which was established in 1958.

Today, Weir Minerals is a specialist in delivering and supporting equipment

“ Weir Minerals have over 20 years’ experience in Ghana and across West Africa” 54 | be directory

solutions which includes slurry and mine dewatering equipment solutions, namely pumps, hydrocyclones, valves, screens, rubber, hoses and wearresistant linings for global mining and mineral processing, the power sector and general industry. Weir Minerals’ business is driven by our purpose and values and all of this is supported by a comprehensive aftermarket services team.

Our purpose is to work together to create engineering solutions, which help our customers deliver processes vital to society.

Forming part of a strong global company, Weir Minerals Africa has an unrivalled footprint across the African continent with a presence in Mozambique, Zimbabwe, Namibia, Botswana, the Democratic Republic of Congo, Zambia, Tanzania and Ghana and also extending to the Middle East.

Weir Minerals

With the current economic climate preventing customers from investing in big capital expenditure, we work closely with customers to devise solutions to their problems and plan ahead to add benefit to the customers’ growth and development requirements.

Our focus on offering the lowest cost of ownership and equipment rental options, support this philosophy.

Having over 20 years’ experience in Ghana and across West Africa, Weir Minerals have been partners to Golden Star Resources, Gold

Fields, AngloGoldAshanti, Iam Gold Corporation (Essakane SA), Randgold Resources, etc in mineral processing.

Weir Minerals West Africa Limited No. 4, 3rd Close, Airport Residential Area P. O. Box CT 3170, Cantonments, Accra, Ghana T +233 (0) 302 785105-6 www.weirminerals.com

be directory | 55

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

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

To find out how to get involved contact: vincent@bus-ex.com