BE.Weekly

ISSUE No. 85 | www.bus-ex.com

Why Excel is costing you millions Innovation to reach new markets and tap value pools

WEEKLY EDITION

Luis Muñoz Marín International Airport

Destination Puerto Rico Puerto Rico’s largest airport and gateway to the Caribbean Barrick South America:

CONCIEL:

KGHM Polska Miedź Sierra Gorda Project:

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contents 6

In brief

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Operations

The week that was In this section you’ll find news, views and comments as we take a look back at the last seven days.

Why Excel is costing you millions Why, by continuing to use static reports instead of a data discovery solution, companies aren’t able to see the larger trends.

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strategy

Innovation to reach new markets and tap value pools

Innovation will create the foundation for many manufacturers’ future success - but innovative thinking is just the first step in creating an innovation portfolio.

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IOS

64

Pyhäsalmi Mine Oy

COver story

Bringing ore to the surface The Pyhäsalmi mine is one of the deepest and oldest mines in Europe and has been producing vast amounts of copper and zinc for over 50 years.

20 Luis Muñoz Marín International Airport

Destination Puerto Rico Luis Muñoz Marín International Airport is Puerto Rico’s largest airport and is fast on its way to becoming a gateway to the entire Caribbean region.

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KGHM Polska Miedź - Sierra Gorda Project

Strength in numbers Senior Vice President of the project, Joseph Tis reflects on how the collective efforts and achievements of its workforce made 2013 such an important year.

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Surfing the booms and busts of the mining industry Serving the Canadian mineral exploration industry since 1992, IOS integrates consulting services, contracting field work and operating a mineralogical laboratory.

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CONCIEL

Tailor made success Managing Director, Michel Maalouf discusses how a passion for creativity and a drive to deliver results have contributed to the success of CONCIEL.

Barrick South America

The jewel in the crown Barrick had a significant investment programme for South America in 2013, much of which was targeted to advance the construction of the world’s first bi-national mine.

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Winners & losers

Ups and downs in the week that was...

World Gold Council Estimates 20 percent rise in Chinese gold demand

Reports Q1 profits of $1.45 billion compared with $981m a year ago

Yahoo

Candy Crush

Shares climb nine percent after better than expected first quarter results despite a 20 percent fall in first-quarter earnings

Tencent bringing world’s most downloaded game to China

Boeing China’s Shangdong Airlines places $4.6 billion order with Boeing

Nestle Reports worst Q1 sales growth since 2009 with an overall drop of 5.1 percent

Remy Cointreau Warns of 40 percent operating profit fall for 2013

Japan Trade deficit quadruples as export growth slows and energy imports continue to rise

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Morgan Stanley

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Netflix Reports rise in Q1 profits, driven by exclusive programming

Coca-Cola Worldwide sales fall for first time in 15 years, volumes of carbonated drinks fell by 1 percent in Q1

Co-Op Group Announces £2.5 billion loss for 2013, the worst results in the group’s 150-year history

Kraft Forced to recall 96,000lbs of hotdogs in the US because they may have been sold in the wrong packaging

in brief

Mining

Chinese gold demand set to continue its meteoric rise The council believes that private sector demand for gold in China will rise to at least 1,350 tonnes by 2017 as the population becomes wealthier. The

forecast also comes as China overtakes India to become the world’s largest gold-consuming nation.

The World Gold Council says China is at the “centre of the global gold eco-system”, as rapid urbanisation creates a rising middle class. Chinese customers bought 1,132 tonnes of gold last year, in jewellery as well as gold bars and coins for investment.

Albert Cheng, from the World Gold Council, said: “The cultural affinity for gold runs deep in China and when this is combined with an increasingly affluent population and a supportive government, there is significant room for the market to grow even further.

Whilst China faces important challenges as it seeks to sustain economic growth and liberalise its financial system, growth in personal incomes and the public’s pool of savings should support a medium term increase in the demand for gold, in both jewellery and investment.”

According to the council, consumers bought a record amount of gold last year, with Asia’s economic heavyweights China and India in the top two spots. Meanwhile in Western markets demand for the precious metal remained strong, particularly in the US, where people bought a lot of gold jewellery as well as gold bars and coins.

business

Cable to clean up companies The Secretary of State for Business, Innovation and Skills Vince Cable has his sights set on what he calls ‘the darker side of capitalism’. He has announced his intention to create a new public register of company ownership that will reveal the ultimate owners of UK companies, thus making it harder for firms to evade tax or funnel corrupt funds.

Companies will be forced to declare who their ultimate owners are. Shareholders with more than a 25 percent stake in a UK-registered company will have to supply personal details to Companies House, he says. Companies will be required to supply these details when starting up, and update them at least once every 12 months. The

government will also abolish so-called bearer shares that allow an individual or group anonymously to own a company and to transfer control without that transfer being traceable.

Ministers argue that the rules changes will help the authorities clamp down on tax evaders, money launderers, and terrorists who can currently use the law to evade the reach of the government. “For consumers, investors and the wider public to really trust a company they need to know who is really in charge,” said Mr Cable. “This is why I’m making sure we take tough action tackling the darker side of capitalism ... no longer will UK companies be able to use complex structures and trails of paperwork to hide information and keep the public in the dark.’’.

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review

Sir George By: Joseph Kulwa Kahama

A

ny company looking to do business in an emerging territory needs to understand rather more than the basic economic facts. Agencies like the CIA, the UK’s FCO and the BBC do their best to give the low-down in their country profiling, but frankly they have their own axe to grind and tend to miss the mark.

The problem is that there is often very little in the way of authoritative sources from the target territories themselves.

Histories may be academic or partisan: government information seriously spun and journalism idiosyncratic.

That’s why it is refreshing to be able to recommend a book that avoids all these pitfalls. Tanzania is not very well understood in Africa itself, let alone beyond, yet it has slipped to the front as a tiger (or should one say lion?) economy, and not merely because it has resources to exploit. What makes Tanzania tick? By approaching his country’s post independence history through the engagement of his father, still active at 85 as Chairman of SEACOM, Joe Kahama has given us a unique perspective on the way Tanzanians think and act.

By taking us through Sir George Kahama’s youthful commitment to the cooperative movement, his career as a cabinet minister and diplomat and the triumphs and frustrations (many of the latter) as leader of the National Development Corporation and the Capital Development Corporation, Joe unfolds the vision that built modern Tanzania.

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It used to be fashionable to scoff at African socialism, or to be suspicious of it: the fact remains that despite having all the elements that have led to conflict in other African c o u n t r i e s Tanzania has maintained peace for 60 years, allowing overseas nations to participate in its development but never compromising its independence.

That could never have happened without leaders like Julius Nyerere, his friend George Kahama and others whose names will be found in these pages.

Joe Kahama’s cogent digressions into relations with Europe and China and his dispassionate analysis add much value for the business reader – read it, seeking to know not what you can bring to Africa, rather what Tanzania’s example can do for you!

Joseph Kulwa Kahama, is Chairman of Tanzania Royalty Exploration Corporation and a recent Chairman of Tanzania Chamber of Minerals and Energy (TCME). In 2006 he was appointed as a member and advisor to the China Africa Business Council (CABC) which is headquartered in Beijing.

in brief

Best from the web this week

We’ve done the searching, so you don’t have to!

BBC

Methane hydrate: Dirty fuel or energy saviour?

Richard Anderson The world is addicted to hydrocarbons, and it’s easy to see why - cheap, plentiful and easy to mine, they represent an abundant energy source to fuel industrial development the world over.

The side-effects, however, are potentially devastating; burning fossil fuels emits the CO2 linked to global warming.

Read the rest

Youtube

ted talks

How public spaces make cities work

Built For It Trials - Stack: Largest JENGA® Game Played with Cat® Excavators Watch it now

Amanda Burden More than 8 million people are crowded together to live in New York City. Amanda Burden helped plan some of the city’s newest public spaces, drawing on her experience as, surprisingly, an animal behaviorist. She shares the unexpected challenges of planning parks people love — and why it’s important.

Watch it now

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Why Excel is costing you millions Why, by continuing to use static reports instead of a data discovery solution, companies arenâ&#x20AC;&#x2122;t able to see the larger trends Words by

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Gayle Ryan

A

few years ago, the ability to capture and manipulate data was an exciting possibility. Organizations often pulled information from databases, which they would then export into Excel to manipulate and analyze. Today, however, static reporting is no longer enough.

Recently there has been a shift in Information Technology from traditional Business Intelligence (BI), where reports are static, to data discovery, where the reports are focused on users, and are dynamic and easy to use. Organizations now need to be able to explore their information and visualize the data in order to stay competitive.

Organizations have more data than ever before, and companies that have developed a way to harness and explore their data have an advantage in the market. Excel has its place for certain functions, but spreadsheets don’t allow decision makers to see the big picture as effectively as a dashboard. In fact, even Microsoft has noticed the shift away from static reporting and realized that Excel isn’t enough, which is why there are more data discovery capabilities in newer versions of Excel and in Microsoft Power View. Still, even the added capabilities in Microsoft Power View still do not allow users to fully monitor, analyze, and explore their data. In order to remain agile and recognize opportunities, organizations need to invest in BI tools that include data discovery and dashboards.

Gartner predicts that more and more devices will be connected with the internet, calling it the “Internet of Everything”. Gartner

“spreadsheets don’t allow decision makers to see the big picture as effectively as a dashboard”

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named this one of the top 10 strategic technology trends for 2014, predicting that this trend will drive an enormous increase in information available. With this massive expansion in available information, the potential for exploration and analysis also grows, requiring the need for more sophisticated and proactive information management and analytical models. Is Excel up to the task?

Excel reports are static, and take time to produce. By the time the decision makers receive their report, the information is already out of date. With a real-time dashboard, people receive updates as soon as the information is available. Dashboards are also interactive, unlike Excel, which means that if a certain data point is troubling, dashboard users can drill down to get more information. Dashboards even provide alerts and updates when something is amiss.

Excel spreadsheets do not provide alerts or updates, and, they are actually hindering our ability to understand critical information by being difficult to read. Finally, Excel spreadsheets are prone to error. One typo can skew all of the data, and it may take time to notice and correct the mistake. Data discovery tools are automated, and much of the room for human error is eliminated.

With more and more information available through a growing number of devices connected to the internet, there are more opportunities for companies to develop new business models, products, marketing strategies, and engagement models for customers, employees, and partners. However, this will only be possible for the organizations that are able to use their information quickly and effectively.

Excel spreadsheets are not a reliable way to manage BI, reporting, and data discovery in order to compete in the quickly changing market. Companies need a comprehensive solution, including BI infrastructure, data discovery tools, dashboards, and effective

operations

data visualizations that will allow them to analyze and explore large sets of data.

Gartner makes the bold statement that “No business can afford to ignore or underplay the impact of technology-driven disruptions that are even transforming what it means to be a business in a digital world.” Traditional BI is no longer enough; data discovery is now necessary to remain competitive.

Comprehensive BI solutions that include data discovery and dashboards, however, can require a large investment of both time and money. Depending on the organization’s requirements and existing IT infrastructure, investments in servers, storage, clients, and networking may be necessary. Implementation, training, and administration also add to the upfront costs.

It is possible, however, to reduce the capital expenditure needed for deployment with cloud services.

In addition to the up-front costs, BI tools will incur maintenance costs and costs associated with enhancing and extending the application. These costs usually far outweigh the up-front investment. In fact, Gartner estimates that, for a business application that is used for 15 years, the average cost to go live is 8% of the total lifetime cost of ownership. It is important to note that the Total Cost of Ownership (TCO) is highly dependent on design decisions, and so it is important for organizations to design the BI solution according to their needs from the beginning, as this will affect, and could drastically reduce, the maintenance and enhancing costs.

However, a BI solution will actually reduce operational costs. Manual reporting can be almost eliminated or greatly reduced with a comprehensive BI and dashboard solution.

Each organization’s reporting needs and subsequent savings will vary; however, organizations that assign one analyst to each team can likely reduce the number of analysts to one or just a few for the

“Traditional BI is no longer enough; data discovery is now necessary to remain competitive”

entire organization. Neo@Ogilvy, a Dundas Data Visualization customer, used Excel to analyze and report on its customers’ data. After implementing a BI solution, including a Dundas powered dashboard, the organization saw their reporting time decrease by 90%.

There is mounting research that indicates organizations need a BI solution that includes data discovery, dashboards, and data visualization tools in order to use the ever-increasing amount of data available and remain competitive in the market. With this evidence, the question is, can you afford not to invest in BI? The opportunity costs of avoiding a BI solution and continuing to use Excel for reporting and data exploration will soon become apparent, if they aren’t already.

By continuing to use traditional BI tools including static Excel reports instead of a data discovery solution, companies aren’t able to aggregate all of their data and see the larger trends. Managers and executives aren’t able to understand their data easily and make fact-based decisions quickly.

Organizations aren’t able to harness and use data, an element that has, and will continue to disrupt the way businesses run.

About the author

Gayle Ryan Dundas Data Visualization. www.dundas.com

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to reach ne and tap va

Innovation will create the found future success - but innovative t creating an inno Words by

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George

ew markets alue pools

dation for many manufacturersâ&#x20AC;&#x2122; thinking is just the first step in ovation portfolio F. Brown, Jr.

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I

t is almost impossible to avoid the messages about the importance of innovation that dominate business magazines, web sites, and conferences. At a most recent Annual Meeting of the Institute for the Study of Business Markets, innovation joined “Big Data” and channel disruption as the three themes cited by CEOs, CMOs, and academic experts as most critical to the future success of business-to-business manufacturing firms. That emphasis is nothing new. Peter Drucker said “Innovation is the specific instrument of entrepreneurship, the act that endows resources with a new capacity to create wealth.” Michael Porter similarly observed that “Innovation is the central issue in economic prosperity.” And Steve Jobs believed that “Innovation distinguishes between a leader and a follower.”

I agree with the emphasis on innovation as central to the future growth and profitability of our companies. There are far too many success stories rooted in innovation to credibly argue otherwise, and, unfortunately, far too many stories of firms that deteriorated from great to second rate by failing to keep pace with innovative competitors. But, at the same time, I believe our firms far too often have tunnel vision with respect to the ways in which they think about innovation.

An example supports that conclusion.

Over a breakfast meeting recently with a number of business executives, I asked for their favorite example of an innovation success story, one drawn either from their

“I agree with the emphasis on innovation as central to the future growth and profitability of our companies”

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own experience or from other firms with which they were familiar. Each individual easily offered an example, and in every case, described a situation in which success was achieved by raising the bar – identifying a way to enhance products with new features, improved performance, superior design, or along some other dimension. A few involved success stories familiar to many of us, but most reflected something that was known mostly by participants in the industry in question.

There was no question that all of these examples were in fact innovation success stories, ones that any firm would have been proud to claim. In fact, innovations that “raise the bar” are those that we most frequently celebrate, those that we invest scarce technical resources and R&D dollars to achieve.

And should there be any question, there are good reasons for investing in raising the bar. A number of years ago, I worked with a client to estimate the relative shares of the “Good”, “Better”, and “Best” segments of their market. With some modest rounding, we found that the split was about 40%, 30%, and 30%. While acknowledging that all generalizations are false, that rule of thumb has been remarkable in terms of being a good approximation in other markets that I’ve studied since then. The finding is also good news in terms of “raise the bar” innovations – 60% of customers are looking for, and willing to pay for, products that go beyond the bare bones “Good” offering. And it is in fact the firms that raise the bar most successfully that are likely to win the customers in the “Best” segment, the customers most likely to pay a price premium for those features and attributes that distinguish each generation of “Best”. Those firms that can raise the bar should raise the bar. They are likely to be rewarded for doing so.

But raising the bar is not the only option for innovation strategies. There are two

strategy

very different innovation strategies that should be considered, ones that have the potential for creating value that can be captured. And, like raising the bar, they are demanding in terms of creativity and out-of-the-box thinking. In my experience, western firms are far less likely to assign resources to innovations that fall into these two categories, preferring to focus their attention on opportunities to raise the bar.

My perspective on the first of these opportunities for innovation was recently motivated by the work I have done along with my colleague David Hartman on the changing competitive environment. In a series of articles, we have argued that the future competitive landscape will be changed in fundamental ways by firms from emerging markets like China that have learned how to produce “almost-as-good products at a great price point”. What these firms have done is dramatically expand their markets, reaching the large middle markets of countries like China and India with innovative products that retained the key features of the highend “Best” offerings from the west, at a price point affordable to the much larger middle market segments of their home countries. These firms have found innovative ways to preserve the key product features critical to customer acceptance while at the same time identifying economies that allow them to reach a much lower price point.

Often their innovations involve strategies to remove costly features that are not critical to the customers in their targeted markets. In other instances, their innovations involve creative approaches to

manufacturing, sourcing, service, and other elements of their cost base.

For those that aren’t yet studying the success stories of emerging market firms like Huawei, Mindray, Sany, Haier, and others that have innovated through this “expand the market” strategy, I point to the much more familiar success story of Henry Ford, another creative executive that figured out the “almost-as-good product at a great price point” formula. In his autobiography, Ford wrote: “I will build a car for the great multitude. It will be large enough for the family, but small enough for the individual to run and care for. It will be constructed of the best materials, by the best men to be hired, after the simplest designs that modern engineering can devise. But it will be so low in price that no man making a good salary will be unable to own one.” His vision required many innovative concepts, not the least of which was the assembly line, but it not only created value for his company, but in fact a whole industry, by expanding the market.

This approach to innovation is particularly important today. Many of the same firms that tout innovation as key to their future cite the middle markets of emerging countries as their growth markets of the future. Success in those segments will only come from the firms that figure out the strategy of creating “almost-as-good products at a great price point”. Without attention and focus on innovations that “expand the market”, it is a good bet that it will be firms from countries like China that are the eventual winners in those huge markets of the future.

Today, firms from those countries are probably as far ahead along

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this dimension of innovation as western firms are in terms of innovations that raise the bar. Unless success can be achieved in the increasingly squeezed “Best” segments, investments that can yield success stories in the “Better” and “Good” market segments must be part of the innovation portfolio of western manufacturing companies.

Almost every business firm with which I work puts considerable importance on strategies that enable them to reach new markets. And, as mentioned above, today, the broad middle markets of the emerging economies are high on the list of targets that have scale and growth potential. But it is rare that I hear innovation linked to the discussion of strategies through which these markets can be reached. And in fact too often I hear executives sadly dismiss the potential of serving these markets, making statements like “at the price points that exist in that market, we could never hope to make any money”. Innovation is potentially the answer to that problem. Finding creative ways to take costs out while retaining the critical features of products is a possibility, one that can yield major dividends in terms of growth in new markets.

There is a third innovation strategy that can yield dividends in some markets. Many manufacturers sell through complex customer chains. Ingredient and component suppliers sell to OEMs and other manufacturers that incorporate their ingredients and components

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into their own products, eventually reaching end customers. Other manufacturers sell to distributors who sell to contractors, installers, and VARs who themselves serve end customers. In many of these situations, the end customers involved are price buyers, giving considerable weight to price in their purchase decisions. The suppliers in such situations frequently report an inability to gain traction from traditional “raise the bar” innovations, as the intermediaries between them and the end customer are unwilling to agree to improvements that carry with them a higher price tag. In numerous instances, I have heard the frustration of suppliers involved in such markets, as their innovations are met with a cold shoulder by their direct customer.

What has been far more successful in many of these situations have been innovations that “change the game”, that create value by creative approaches to profitably transform the economic and business relationship between the supplier and their direct customer. The opportunity to “change the game” in this way builds upon the fact that there are significant adjacency costs associated with most products that are sold through the types of complex customer chains described above.

Some of those adjacency costs involve the manufacturing process, others are more subtle like those associated with warranty costs. But adjacency costs are always there, and are frequently much larger than the product costs per se. I have seen many instances in which the adjacency costs linked to a product are an order of magnitude larger than the product cost itself.

Working recently with a manufacturing firm that supplied an important component to its business customers, we went through a systematic process to identify and quantify these adjacency costs. A few of their strategic accounts provided on-site access to allow the teams working on this initiative to identify

strategy

all of the cost elements that were linked to the use of this firm’s component. The results were shocking to all involved, as it turned out that the “value pool” that emerged from this work was many multiples of the cost of the component itself. As one executive noted, “we’ve not created the opportunity for value creation and capture that goes dramatically beyond the price of our product”.

It is such value pools that create the opportunity for innovations that “change the game”, ones that take costs out of the system through creative approaches to product design, through changes in the roles and the boundaries between suppliers and customers, and through other strategies that enable value creation and capture. Such innovations respect the reality of the price pressures of end customers, and enable margin improvements centered in the business processes within and between the manufacturing partners at earlier stages of the customer chain. In interviews with OEMs and other manufacturers, many of the success stories that they tell about their favorite suppliers involve innovations that “change the game”. In some markets, those are in fact about the only opportunities for innovation that are available to suppliers.

There is no question that innovation will create the foundation for future success

“Almost every business firm with which I work puts considerable importance on strategies that enable them to reach new markets”

stories for many manufacturing firms. The focus on innovation correctly belongs high on the agenda. But innovative thinking about innovation is the first step in the process.

The three flavors of innovation described here – ones that can raise the bar, ones that can expand the market, and ones that change the game by tapping into available value pools – all have the potential to be the foundations of those future success stories.

Thinking through your firm’s opportunities within each of these categories, in the context of the markets targeted, the customers along the customer chain, and the competitors against whom you must win can allow the creation of an innovation portfolio that draws appropriately on all three possibilities and allocates resources to those opportunities most likely to yield future success.

About the author

George F. Brown, Jr George consults with industrial firms on growth strategy through his firm B-to-B Advisors, Inc. He is the coauthor of CoDestiny: Overcome Your Growth Challenges by Helping Your Customers Overcome Theirs and the cofounder of and a Senior Advisor to Blue Canyon Partners, Inc., which he served as CEO for fifteen years. 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. gfb@BtoBAdvisors.com

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Luis Muñoz Marín In

Destination P

Luis Muñoz Marín International Airport i on its way to becoming a gatewa words by

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Will Daynes

nternational Airport

Puerto Rico

is Puerto Ricoâ&#x20AC;&#x2122;s largest airport and is fast ay to the entire Caribbean region research by

Abi Abagun BE Weekly [ Issue 85 ]

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he name José Luis Alberto Muñoz Marín is one that is revered in Puerto Rico. Born in February 1898, he was a poet, journalist, politician and statesman, and to this day remains regarded as both the “Father of Modern Puerto Rico” and the “Architect of the Commonwealth”. In 1948 Marín became the first democratically elected Governor of Puerto Rico and went on to spearhead an administration that would become lauded internationally for engineering significant

T

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economic, political and social reforms that immensely benefited the territory.

Today the name Luis Muñoz Marín adorns Puerto Rico’s largest international airport. Located in the area known as Isla Verde, construction of the airport was authorised by Marín himself in 1951. The decision to build it came in response to the changes occurring in the aviation sector at time, with many of the airlines that served Puerto Rico at the time upgrading their fleets from propelled to jet aircraft.

Luis Muñoz Marín International Airport

“The airport is today the busiest in the Caribbean by passenger traffic with over four million people boarding a plane there per year”

As well as ensuring the Caribbean nation would now possess a modern airport with a runway long enough to land jet aircraft, it would also become a major meeting point for tourism in Latin America as well as being a hub for air cargo. Furthermore, in addition to serving as an international airport it was also to become the home of the Puerto Rico Air National Guard.

The airport officially opened for business on 22 May 1955, taking its current name in 1985. In the three decades between the

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Atkins has been the lead designer of all airfield projects at Luis Muñoz Marín International Airport in San Juan, Puerto Rico for the past 13 years.

Atkins knows aviation.

Today, more than 200 million passengers safely arrive or depart from runways constructed from Atkins’ designs.

With full-service capabilities in airside, landside, terminal and environmental permitting, combined with community and airport master planning, Atkins is prepared to develop the airports of the future.

Our aviation projects range from major air carrier runways to small turf runways, from large hub terminal designs to general aviation T-hangars, and from new greenfield airports to renovations of existing facilities.

Whether you’re looking for technical solutions or project innovation, let Atkins’ global experience take you to new heights.

1.787.294.2010 carlos.arboleda@atkinsglobal.com

www.atkinsglobal.com/northamerica

As part of the CIP program for Luis Muñoz Marin International Airport, Atkins designed state-of-the-art Aircraft Rescue and Firefighting Facilities (ARFF). Atkins also provided services for the Reconstruction of Runway 10-28 and associated taxiway system, including the development of the South General Aviation complex.

Luis Muñoz Marín International Airport

“Over the years the airport has been the hub for numerous Caribbean airlines”

airport grew steadily to include three terminal buildings, a 200 space car park and a second runway, which was finished in 1972. Over the years the airport has been the hub for numerous Caribbean airlines, including Pan Am, Trans Caribbean Airways and Eastern Air Lines. It also acted as the headquarters of the first Puerto Rican international airline, Prinair, from 1966 until its demise in 1984.

Owned by the Puerto Rico Ports Authority, Luis Muñoz Marín International Airport is

atkins Atkins Caribe, LLP, is a Puerto Rico-based business unit of Atkins—one of the world’s leading engineering, design, and project management consultancies. Atkins Caribe blends the strength of Atkins’ worldwide expertise in engineering complex infrastructure projects with highly skilled local and North American resources to provide state-of-the art engineering, design, and project management services within the Commonwealth of Puerto Rico and throughout the Caribbean region.

Atkins has a decades-long history of successfully completing a broad spectrum of projects in Puerto Rico, including serving as the general airport consultant to the San Juan Luis Muñoz Marin International Airport since 1997. Working with the airport’s management company, Aerostar Airport Holdings, LLC, Atkins has successfully supported the airport’s capital improvement program, providing airport planning and airfield

design services, pavement studies, environmental assessments, construction management services, runway improvements, and much more. For example, Atkins recently completed a major runway safety area (RSA) improvement project for Runway 8-26, the airport’s longest runway.

Atkins effectively leverages the expertise of nearly 100 experienced technical and business professionals in North America and the Caribbean region who specialize in airfield and pavement engineering, planning, project management, and administrative support—a multidisciplinary team that works effectively across geographic boundaries to design, plan, and enable some of the largest and most complex aviation-related projects in the western hemisphere. The Atkins Caribe office is strategically located in the San Juan metro area, just minutes away from the Commonwealth’s federal and state governmental agencies. www.atkinsglobal.com/northamerica

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Luis Muñoz Marín International Airport

managed by Aerostar Airport Holdings, a public-private partnership awarded a lease by the government to operate and manage the airport for 40 years: the airport is today the busiest in the Caribbean by passenger traffic with over four million people boarding a plane there per year according to the Federal Aviation Administration. Today dozens of airlines continue to operate out of the airport.

These include the likes of American Airlines, Air America, Air Canada, United Airlines, WestJet, JetBlue Airways and Delta Air Lines.

“On a typical day more than 100 flights take off and land at Luis Muñoz Marín International Airport where we service around 80 percent of Puerto Rican’s that travel back and forth from the US mainland or indeed further afield,” states Manuel Gutierrez, Commercial Director of Grupo Aeroportuario del Sureste, the Mexican company that holds a 50 percent stake in Aerostar Airport Holdings alongside Highstar Capital. “Meanwhile, those visiting Puerto Rico are predominantly tourists coming to enjoy the yearlong good weather,

Gramaslindas Landscape Established in the 1950’s Gramaslindas is the oldest and largest business in Puerto Rico dedicated to sod cultivation and related activities. Our experience in developing and maintaining an inventory of over 500 acres of sod makes us the leading supplier/ contractor for any large scale sodding job and business relation on the island. Gramaslindas has been consistently ranked as one of Puerto Rico’s top five largest landscape contractors in the Caribbean Business Book of Lists.

Our business is divided into three major operations: Gramaslindas Sod Farming, Gramaslindas Landscape, Inc. and Tropigardens; a Wholesale Business that Grows ornamental plants, palms and trees.

Gramaslindas Landscape, Inc., the division in wich Yamir E. Rodríguez had been involved as a Landscape Manager for the past 11 years; have

a consecutive business growth trend offering different services such as: Landscape Maintenance, Grounds Keeping, Pesticide Application, Tree Care, Planting, Interiorscape, Landscape Design, and others. We are a proud contractor of 48 projects as Home Owners Association, Hotels, Shopping Centers, Commercial Spaces, Federal Projects and the International Airport Luis Muñoz Marín.

Gramaslindas is the company contracted by AEROSTAR AIRPORT HOLDING, LLC to provide hand to hand services in this International Airport. Some of the services provided inside and outside of the runways are Landscape Design, Landscape Maintenance and Tree Care on more than 400 acre around the property. This operation was directly supervised by Mr. Rodríguez in coordination with AEROSTAR. www.gramaslindas.com

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Seen

Contact us today and put your company in the spotlight!

vincent@bus-ex.com 28

[ Issue 85 ] BE Weekly

Luis Muñoz Marín International Airport

our wonderful beaches and generally to get away and relax.”

Puerto Rico’s desire to capitalise on growth within the tourist sector, and also the business sector for that matter, can be felt throughout the territory and this includes Luis Muñoz Marín International Airport itself. The publicprivate partnership deal that formed part of the agreement for Aerostar Airport Holdings taking managerial control of the airport in February 2013 included a call for the company to invest approximately $1.4 billion over the 40-year life of the lease in order to solidify it as a world-class aviation gateway. It is hoped that this level of investment will not only consolidate the airport as the principal facility serving the Caribbean but also allow Puerto Rico to compete with the 30-odd islands in the region that offer tourism.

This past October Aerostar Airport Holdings announced its intention to invest $240 million on renovations to its terminal buildings, with upgrades to terminals B and C marking the first large-scale works to the airport since the company took over operations. These works follow on from other improvements made since 2008, which include the introduction of terminal A and the installation of new light systems, press conference rooms and various new retail and food outlets.

“We are currently hard at work implementing a lot of changes throughout the airport,

Power Engineering Do you have millions of dollars allocated in your budget to deal with business disruptions? If not, it is crucial to adapt and adopt Power Engineering’s SPP Model to prevent high voltage electrical failures: Safety: Perform coordination, short circuit, and arc flash study.

Predictive: Schedule testing of equipment to create trending and act before it reacts.

Preventive: Performing annual shutdown of equipment found to have unsafe trending.

Indeed, according to Eng. Agustin Arellano, CEO of AEROSTAR Airport Holdings operators in Puerto Rico, “Power Engineering has become our allies implementing energy strategies and ensuring the reliability of our high voltage electrical system. They have been vital to make our airport safe for our employees and millions of passengers visiting our facilities.” www.powerengineeringpr.com

“We are currently hard at work implementing a lot of changes throughout the airport, particularly when it comes to terminals B and C”

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Did you know?

22 May, 1955 The date the airport opened for business 1985 Year Luis Muñoz Marín International Airport took its name $1.4 billion The amount to be invested in the airport during Aerostar Airport Holdings’ 40 year lease 100+ Number of flights which take off and land at Luis Muñoz Marín International Airport during a typical day

“What we are focused on doing is challenging those ... airports that are handling anywhere up to twelve million people per year, in the not too distant future” particularly when it comes to terminals B and C where we are doing things like increasing the size of check in areas, making parts of the building that were previously too narrow wider in order to increase accessibility for passengers,” Gutierrez continues. “Meanwhile we are also constructing a new security

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checkpoint that will have as many as twelve access points, which we expect to have up and running by the end of this year.”

There is unquestionably much work to be done, what with countless supplementary tasks needing completing as well, from re-flooring the terminal buildings to

Luis Muñoz Marín International Airport

installing air conditioning units, electrical systems, lighting and scanning technology.

Nevertheless, Gutierrez recognises that the results of this work will be of massive benefit to all concerned.

“While the aforementioned tasks involve a great deal of time, effort and investment, what it will mean is that we end up with what will almost be a whole new airport, one fit for the modern world,” he concludes. “In terms of passenger volumes and traffic we are rated at around number twelve in Latin America.

What we are focused on doing is challenging those at the top of the list, airports that are handling anywhere up to twelve million people per year, in the not too distant future.

We realise that to do that we need to achieve that is increase our capacity, which means increasing expenditure, and we feel that is something we can make happen, while at the same time establishing this as the best airport in the Caribbean in terms of service, quality and passenger satisfaction.”

Luis Muñoz Marín Intenational Airport

(787) 289-7240 info@aerostarairports.com www.aeropuertosju.com

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KGHM Polska Miedz -

Strength i

As the Sierra Gorda Project enters an exciting new phase reflects on how the collective efforts and achievement words by

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[ Issue 85 ] BE Weekly

Will Daynes

- Sierra Gorda Project

in numbers

e of its life, Senior Vice President of the project, Joseph Tis ts of its workforce made 2013 such an important year research by

Abi Abagun BE Weekly [ Issue 85 ]

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Secondary crusher & HPGR

s Joseph Tis, Senior Vice President, explains, 2013 was an important year for the Sierra Gorda open pit copper mine project. “In February of last year the project budget, valued at $4,000 million was updated. In the months that followed the project went on to complete a consolidated advance of 52.9 percent, reaching 91.2 percent in February 2014.”

A

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Located within Northern Chile’s Atacama Desert, the Sierra Gorda Project is a joint venture between KGHM International Ltd., Sumitomo Metal Mining and Sumitomo Corporation, and possesses deposits that total up to 2.2 billion tonnes of measured and indicated resources, and reserves amounting to some 1.3 billion tonnes.

In addition to completing detailed

KGHM Polska Miedź - Sierra Gorda Project

“We have made a number of great advances in the construction plant over the last year or more”

engineering and locking down the purchasing of equipment, 2013 also saw Sierra Gorda benefit from the completion of infrastructure works designed to supply the site with electricity and water. Both 110Kv and 220kV electricity lines are now positioned on site, with the 110kV line going live during March of this year and the 220kV being brought into action the following month. In addition

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We work with the

BEST! With over 400 knife gate valves in Sierra Gorda, Scancontrols with our partner RF Valves keeps providing high quality for the mining industry.

RF Valves for Heavy Duty operations, are designed to control abrasive fluids, specially for adverse conditions where common valves are no good.

Scancontrols is also in other large mining projects in Chile, continuing contributing to the quality of the processes with our represented brands.

Email: info@scancontrols.cl www.scancontrols.cl

KGHM Polska Miedź - Sierra Gorda Project

“Particular milestones achieved during 2013 included the delivery of the Truck Shop to operations” to the completion of these power lines, the assembly and welding of the project’s sea water aqueduct has also been finished.

A particularly striking example of the progress made at Sierra Gorda over the last 12-18 months comes in the form of the project’s processing plant. “We have made a number of great advances in the construction plant over the last year or more,” Tis agrees, “going from eight to twelve percentage points during the months between August and December 2013 alone. Particular milestones achieved during 2013 included the delivery of the Truck Shop to operations, delivery of shovels 4 and 5, and the delivery of 17 haul trucks for use in Prestripping extraction operations.

Conveyor belts

scancontrols Scancontrols, control valve specialists, provides and advise our clients in Chile, on all matters relating to valves and fluid control.

This, seen as the core of our development, has made us leaders in the industry, thanks to our fast response, performance and reliability.

Founded in 2001 with the aim of providing the market with the best solutions for handling fluids via control valves, including engineering for selecting the type and size of valve, actuators and materials for each case.

Our company has a full line of control valves and on / off valves, as well as manual valves for all types of processes. Also we offer diagnostic, maintenance and repair services of the valves in the city of Antofagasta. This service has allowed Scancontrols

to make a difference and obtain a good position in the local market as one of the few companies able to offer integral solutions for fluid handling with valves.

Scancontrols represents in Chile top brands such as SOMAS (Sweden), RF VALVES (USA) and Ringo Válvulas (Spain), which added to our Help Desk, Maintenance and Repair Team, leads to excellence and guaranteed results.

Our services cover all industries including Mining, Pulp & Paper, Refineries, Petrochemicals, Power Plants, and others.

“With a sustained growth in over 10 years of existence, Scancontrols is in a very strong position to continue expanding the services and products to new projects and markets” www.scancontrols.cl

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What makes that a certain company has been selected as a support in the development of a great mining project in Chile?

SCM Sierra Gorda

has chosen Ingeniería de Transportes Javier Cortés S.A. as his support for the transport of all their necessary supplies for the construction and start up of the SIERRA GORDA project located in the Antofagasta region.

No doubt this is a great recognition for Ingeniería de Transportes Javier Cortés S.A. a company of a large and historical trajectory in the movement of oversize and overweight transport in the Chilean mining.

The history of the company is certainly confusing with the growth of the Chilean mining after it started as a transport company for general cargo it is now specialized in the transport and operation of special cargo according to the development of the Chilean mining beyond of the 70’s.

Ingeniería de Transportes Javier Cortés S.A., with more than 50 years in this business, has been stand out to transport the most heaviest and difficult cargoes in Chile, and that the transport on off-road trails to locations at 5,000 m.o.s.l. hasn´t been an obstacle to his successful career.

For the construction of the Sierra Gorda project it was necessary to perform more than 5.000 voyages with import cargoes and domestic supplies.

In order to address adequately this project, Ingeniería de Transportes Javier Cortés S.A. increased its fleet of modular equipments and trucks in order to fully meet the expectations of the client.

With the result of this project we are very optimistic to keep and strengthen a long-term relationship with Sierra Gorda in order to participate in their upcoming projects in Chile.

We take this opportunity to wish Sierra Gorda the best of success in the start up of the mine.

Ingeniería de Transportes Javier Cortés S.A. is also actively involved in the development of wind farm, photovoltaic, thermoelectric, hydroelectric, cellulose, refineries and others projects as well in the consulting prior to project implementation phases.

www.javiercortes.com

KGHM Polska Miedź - Sierra Gorda Project

Sea water pond

“As of January 2014, we have calculated that more than 44,000 people have directly contributed to the construction of the project and its various elements”

Furthermore, 2013 saw the installation of all critical plant equipment.”

Tis is keen to add that all of the achievements already mentioned have been as a result of the tireless work of the project’s workforce performed in the field. During the month of October, 2013, employment activity on site reached a peak of 9500 workers, while 2013 as a whole saw a total of 11,236,934 man hours earned.

“As of January 2014, we have calculated that more than 44,000 people have directly

contributed to the construction of the project and its various elements,” Tis states. “Each and every one of these people have at all times remained committed to our “Zero Harm” ethos, our most fundamental value which enforces our commitment to the health and safety of our employees and the communities in which we operate, and in doing so have not only met, but often exceeded expectations.”

As a company KGHM has long been proud of the fact that it acts as a major contributor towards employment generation, regardless

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KGHM Polska Miedź - Sierra Gorda Project

of where it is based. This is very much the case with the Sierra Gorda Project, what with a great many of the 44,000 people who have contributed to its development coming from regions surrounding it. The largest contributor to date has been the VIII Biobío Region, from which the project has employed some 9,557 people, or 21.6 percent of the 44,000. Other major contributors have been the II Antofagasta Region, the Santiago Metropolitan Region XIII and the V Valparaíso Region, with 7,505, 7,085 and 6,306 residents employed on the project respectively. On top of these figures, no fewer than eleven other regions, from the XV Region of Arica and Parinacota, through to the XII Region of Magallanes have also contributed employees to the project.

In addition to the creation of jobs, the Sierra Gorda Project has also contributed in

Stock pile

“In addition to the creation of jobs, the Sierra Gorda Project has also contributed in other vital ways to the local and national economies of Chile”

hatch Hatch supporting Sierra Gorda from the beginning Sierra Gorda retained Hatch since mid 2012 to develop the detail engineering of their Molybdenum plant. The project has been a success from the engineering and procurement stand point and is currently well under way in construction. Hatch has not only done detail engineering to the Sierra Gorda Molybdenum plant but has supported Sierra Gorda as a key client and continued helping Sierra Gorda with the Moly plant Field Engineering Services, Pre-Commissioning & Commissioning support services for the entire Copper-Moly Concentrator,

procurement support services and has as well reviewed the Basic Engineering of their concentrator future expansion. For Hatch, Sierra Gorda has been an excellent client, and one very good example of client engagement and commitment of our core values, all required to create and enhance a long term relationship adding the best possible value to our clients. The multidiscipline capabilities available at Hatch and the global availability of our experts have given us the strength to commit with Sierra Gorda in one of the largest mining projects of the continent. www.hatch.cl

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Instruvalve Ltda

Quality at your disposal

“Instruvalve”, a Chilean Company with ten years of experience when it comes to the control of fluids and automation, supplied a package of electric actuators from Limitorque USA to the Sierra Gorda Mine project. The Limitorque actuators are used to operate ball and gate valves in the raw water sea pumping stations of the mine’s plant. Instruvalve also assisted in the implementation of the system.

Instruvalve is grateful and thankful for the confidence shown by Sierra Gorda and is

proud of be a technological partner of the mine, wishing it great success in its future operations.

In its portfolio of products, “Instruvalve” also offer hydraulic/electric actuators, valve positioners, field instrumentation and heat exchangers.

(55) 2944 369 ventas@instruvalve.cl www.instruvalve.cl

Valves – Automation – Instrumentation • Control Valves • Positioners • Hydraulic / Electric Actuators • Field Instrumentation • Heat Exchangers

QUALITY AT YOUR DISPOSAL

Instruvalve, dedicated to providing quality products and services to the Mining, Energy, Oil & Gas, and general processes industries, provides its clients with world-class brands, excellent after-sales service and a highly qualified team.

POST-SALES SERVICES: Technical Services: Branch offices with highly qualified workshops for the maintenance and configuration of equipment.

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Field Services: Visits projects to make preventive check-ups to avoid halts in the productive processes.

Technical Consultancies: Highly qualified professionals who advise and guide the purchase of equipment and/or services.

Training: Technical and usage training orientated to obtain better performance of the equipment.

KGHM Polska Miedź - Sierra Gorda Project

Primary crusher

“The existence of this project has not only helped strengthen the local mining industry, but also will contribute to the increased supply of copper on a national and international scale”

other vital ways to the local and national economies of Chile. “The existence of this project has not only helped strengthen the local mining industry, but also will contribute to the increased supply of copper on a national and international scale,” Tis says. “In doing so we have also played our part in ensuring that the country remains a leading global player when it comes to the production of copper, and in showcasing

the professional quality and expertise of workforce, taking a massive development project from start to finish, we have helped send out a message to investors that Chile is a country worth taking notice of.”

Giving back to the community is a trait that in many ways has characterised the project since its inception. To this day it arguable remains best reflected in the development, construction and

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â&#x20AC;&#x153;In the short term our efforts are very much focused on completing the construction and pre-commissioning phases of the processing plantâ&#x20AC;?

Did you know?

Progress on construction (at 31 December 2013) Project will be completed on time, planned completion of construction and commissioning in mid-2014 Total project progress is 86% complete Construction of sea water pipeline 94% complete, final hydraulic testing in progress Construction of tailings pond approx.

86% complete and processing plant approx.

80% complete Pre-stripping at 81% of the amount required before commissioning Around 96% of the CAPEX committed

Process plant

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Around USD 3.4B of the committed amount has been incurred

KGHM Polska Miedź - Sierra Gorda Project

Tailings thickener

implementation of numerous infrastructure projects that have helped improve quality of life within the region. Such projects include the construction of a wastewater treatment plant, the expansion of security checkpoints and the installation of CCTV to provide a safer environment, and the implementation of programmes designed to protect native flora and fauna.

While 2013 was certainly an important year for the Sierra Gorda, 2014 could prove to be an even greater milestone, what with production at its processing plant due to commence this year, thus ushering in a new phase for the project. “In the short term our efforts are very much focused on completing the construction and pre-commissioning phases of the processing plant, and

subsequently bringing it online, all the while fulfilling our Zero Harm commitments” Tis concludes. “Throughout the remainder of the year we will be bringing several other projects online and by December 2014 we expect to have completed the ramping up of production to bring it up to 110,000 tonnes per day.”

KGHM Polska Miedź Sierra Gorda Project

562-336-5200 info@kghminternational.com www.quadrafnx.com www.kghminternational.com

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Barrick Sou

The jewel in

Barrick had a significant investment programme for South A construction of Pascua-Lama, the worldâ&#x20AC;&#x2122;s first bi-national m edited by

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Will Daynes

research

uth America

n the crown

America in 2013, much of which was targeted to advance the mine, expected to be operational in the second half of 2014

research by

Robert Hodgson BE Weekly [ Issue 85 ]

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Barrick Goldâ&#x20AC;&#x2122;s Veladero mine in San Juan province, Argentina

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Barrick South America

ith the acquisition of Placer Dome in 2006, Barrick Gold Corporation became the largest gold mining company in the world.

Barrick’s holdings in South America include the Pierina and Lagunas Norte gold mines in Peru, the Veladero gold mine in Argentina, the Cerro Casale project in Chile, and the world class Pascua-Lama project on the Chile/ Argentina border.

With a mine life estimated at 25 years, Pascua-Lama is the current jewel in the crown, but as the world’s first bi-national mine it has required a complex series of negotiations with two national governments. At an elevation of up to 5,200 meters, this is also the highest altitude project Barrick has ever tackled, and it raises many unique logistical challenges.

W

that currently stand at a massive 23.2 million ounces, but exploration is still in progress and there may be even more.

Cerro Casale was originally a 50/50 exploratory joint venture between Barrick and Kinross Gold Corporation, but early in 2010, Barrick acquired an additional 25 percent interest from Kinross, increasing its interest in the project to 75 percent. The construction phase will last about three years and the life of the mine is estimated at approximately 20 years, with average annual production expected to reach one million ounces of gold and 110,000 tonnes of copper.

Now with a controlling interest, Barrick is keen to use the lessons learned in PascuaLama to good effect and where possible, leverage synergies in the design and

“Construction has advanced steadily, with production expected to commence in the second half of 2014” Nevertheless, it is destined to become one of the most important mines in Barrick’s global portfolio, with proven and probable reserves of 17.8 million ounces of gold, and an additional prize of 671 million ounces of silver. Construction has advanced steadily, with production expected to commence in the second half of 2014. At the end of November 2012 the tunnel to transport the ore between Argentina and Chile was approximately 60 percent complete, and 90 percent of the materials and equipment required for the process plant had already been committed.

During the first five years of production, Barrick expects an average of 800,000 and 850,000 ounces of gold per annum.

Another project in development is Cerro Casale, 130 kilometres north of the PascuaLama project in the Maricunga district of Chile.

This project holds estimated gold reserves

construction of Cerro Casale. This is one of the largest undeveloped gold-copper deposits in the world and it is envisaged that it will one day exceed the production anticipated at Pascua-Lama.

As well as these two stellar development projects, Barrick can also count on a solid portfolio of mines already in production.

The Veladero mine, located in the San Juan Province of Argentina, is immediately south of the Pascua-Lama property in the highly prospective Frontera District. Veladero has two open pits, Filo Federico and Friendly and has an estimated life of 14 years. The mine has been in production since 2005 and in 2011 produced 957,000 ounces of gold at a total cash cost of $353 an ounce.

The proven and probable mineral reserves at 31 December, 2011 were 10.6 million ounces of gold.

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corplab For those of us in charge of managing ALS Corplab in the region, it is a satisfaction to be considered Barrick Gold´s “strategic partners” in Latin America. On this concept, today we have the possibility of providing our environmental services in different countries of the region.

In Argentina, we started performing specific services back in 2001. Since 2004, we have provided services in Chile, being the first relevant contract the Veladero and Pascua Lama, done in 2008. From San Juan, Argentina and since 2010, from Chile, we have serviced Casale and Zaldívar projects. Later, in 2011, we had the opportunity of replicating our service standards in Peru, in Lagunas Norte and Pierina facilities.

Since 2013, we are participating with Barrick in the Pueblo Viejo Project in Dominican Republic.

On a more than ten years continuous interaction, we have succeeded in identifying the mystic of their work style, interpreting the required excellence standards to meet their needs that enable Barrick´s operations in Latin America to be environmentally sustainable. We pride ourselves on this. www.corplab.net

Moving to Peru, Barrick has the Pierina mine, located in the Andean Cordillera in the Department of Ancash. This mine has proven and probable mineral reserves of 791,000 ounces of gold, and although it is relatively more expensive to produce than in other mines, rising gold prices have recently seen the mine’s life extended to the end of 2014.

This is a standard open-pit, truck-and-loader operation, similar to Veladero.

Also in Peru is the Lagunas Norte mine, located on the Alto Chicama property in north-central Peru and 175 kilometers north of Pierina. The property lies on the western flank of the Peruvian Andes at an elevation of 4,200 meters above sea level. The open pit mine began operations in the second quarter of 2005, ahead of schedule, and involved an investment in construction of $340 million.

In 2011, Lagunas Norte produced 763,000 ounces of gold at an attractive total cash

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Barrick South America

The Pierina mine is located in the Andean Cordillera

â&#x20AC;&#x153;Barrick is guided by a vision to lead the industry in finding, acquiring, developing and producing quality reserves in a safe and socially responsible mannerâ&#x20AC;? cost of $269 per ounce, and had proven and probable reserves of 6.2 million ounces of gold at 31 December 2011.

In all its operations in South America, Barrick is guided by a vision to lead the industry in finding, acquiring, developing and producing quality reserves in a safe, profitable and socially responsible manner.

The company wants to see the regionâ&#x20AC;&#x2122;s natural resources play a key role in supporting longterm sustainable economic development and facilitating this process is a corporate priority.

Barrick is already a signatory to a number of voluntary codes and initiatives that address a range of economic, social and environmental issues. These include the Carbon Disclosure Project, the International Cyanide Management Code, Transparency International (Canada) and the Voluntary Principles on Security and Human Rights.

The company has also been an active member of the UN Global Compact (UNGC) since 2005. This is an initiative which directly involves business in tackling some of the

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“Although its primary focus is on gold, Barrick also has significant interests in copper in South America”

Jamie C. Sokalsky President & Chief Executive Officer

The Pascua-Lama project zone

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Jamie C. Sokalsky was appointed President and Chief Executive Officer of Barrick Gold Corporation on June 5, 2012. He is also a member of the company’s Board of Directors.

Mr. Sokalsky joined Barrick as Vice President and Treasurer, rising to Senior Vice President and Chief Financial Of ficer in 1999, and Executive Vice President and CFO in 2004, leading Treasury, Tax, Controllership and Financial Reporting, Internal Audit, Investor Relations and I n fo r m a ti o n Technology.

Barrick South America

Lagunas Norte is located on the Alto Chicama

major social and environmental challenges that arise from globalization.

Barrickâ&#x20AC;&#x2122;s achievements were publicly acknowledged yet again in 2012 when it was ranked as a global leader in corporate social responsibility for the fifth consecutive year by the Dow Jones Sustainability World Index. The DJSI World Index independently evaluates 2,500 companies using rigorous criteria in the areas of corporate, economic, environmental, and social performance to identify the top 10 per cent of performers.

Although its primary focus is on gold, Barrick also has significant interests in copper in South America. The Atacama desert has some of the largest porphyry copper deposits ever found, a geological

legacy that has made Chile and Peru the first and second largest exporters of copper in the world.

In 2011, Barrickâ&#x20AC;&#x2122;s ZaldĂ­var copper mine in Chile produced 292 million pounds of copper at a total cash cost of $1.50 per pound. The proven and probable mineral reserves at 31 December 2011 were 6.6 billion pounds.

Barrick South America

(56 2) 340 2022 info@barrick.com @minerabarrick www.barricksudamerica.com

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IO

Surfing the bo of the mining

IOS Service GĂŠoscientifiques Inc is a geologic the Canadian mineral exploration industry contracting field work and opera words by

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John Oâ&#x20AC;&#x2122;Hanlon

OS

ooms and busts mining industry

cal consulting firm with a difference: Serving since 1992, it integrates consulting services, ating a mineralogical laboratory research by

Stuart Platt BE Weekly [ Issue 85 ]

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Drill core logging

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IOS

ince founding IOS 22 years ago at Chicoutimi in Québec, Réjean Girard has seen no fewer than four recessions and it’s an achievement in itself that, as a service provider to the notoriously cyclic mining industry, the firm has managed to grow through each of them. It has forged a reputation well beyond Québec and Canada as an efficient and innovative operator.

Canada has a reputation for leadership in mining investment, as evidenced by the success of the TSX in listing companies.

However the mining industry is very conservative, and nowhere more so than in Canada itself. Girard notes, and regrets, the fact that investment in technology has been allowed to lag behind field operations.

“Exploration is risky and expensive, and to

S

boom and bust and their consequent cost to the industry.

There’s equally no arguing with the fundamental demographics. To fully industrialise the BRIC nations will take more mineral resources than mankind has already produced. With 30 million people in China moving every year off the land and into the cities, that country alone will need to build the equivalent of Canada’s infrastructure every year! They and the mining industry are being done no favours – investors need to take a longer view and the industry needs to iron out its peaks and troughs.

It could do worse than look at the example of IOS. Plan for the boom when you are in the doldrums, and for the bust when things are good. And be ready; the boom is coming! In

“This is an industry driven either by greed or passion – two behaviours that are very difficult to manage!” give it a better chance of success we need to constantly renew our toolbox,” he says.

“But minimal incentives are made available for doing that.”

Drilling cost are humongous – up to 60 percent of all investments – and improved targeting approaches are a must. We have too much tolerance of poor planning, he believes. Marginal projects shall be abandoned earlier, saving large sums for viable ventures. “Overall exploration costs are too high compared to the revenue of the industry. It is a structural problem.”

This he thinks is due to investors’ tendency to consider exploration as a goal, not as a means. “This is an industry driven either by greed or passion – two behaviours that are very difficult to manage!” Whatever the cause, there’s no arguing with the fact of

a downturn, budgets are slashed, research gets hit and innovation dries up, but that is just the time when the seed corn should take priority because the current trough has to end soon – he thinks the upturn will be established by the end of this year.

The mines will not be ready though – during 2012, some $800 million was invested in exploration in Québec alone, in 2013 less than a twelfth of that. Is this any way to run a business as essential as mining, he asks. No wonder so many companies go to the wall – but not IOS! “It needs a lot of experience to level the field. In the good times we act like squirrels hiding nuts everywhere! Then when the lean times come, we have resources to back our human resources onto scientific research and development processes. That allows them to carry on working when there

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Rock sampling tundra

are no clients, and the company to conceive and develop new product to be ready when the next boom comes.”

Something rather remarkable came out of the latest recession – something that looks like an engineering project, despite the fact that IOS is not an engineering firm. Mining in Canada (and right around the tundra belt) is made difficult, slow and expensive by the terrain and the climate. Canadian swamps are endless! The favoured way to get about is by helicopter, which doubles the exploration costs. So IOS got together with its neighbour L’Équipe Fabconcept to develop an all-terrain vehicle (ATV) capable to partly replace helicopters and drastically reduce operating costs. The prototype and the first production Kaskoo-X04 were successfully tested over a variety of unimaginable terrains. Girard believes this vehicle will be outperforming during the harsh Canadian winter, when access roads are closed and the lakes frozen.

“This incredible ATV has definitely proved that it can deliver the job.”

The Kaskoo-X04’s innovative technology makes it the best all-terrain vehicle on the market today, according to the manufacturer.

It’s quite fast, reaching up to 40 kph due to its superior suspension and a comfortable passenger compartment. It floats despite its 1.5 tons cargo; it crawls effortlessly in deep mud and snow – Canada’s lakes and swamps are no obstacle. Fabconcept needed IOS to test the machine and make sure it fits the market requirements. Everyone in Canada knows IOS and that its evaluation of the savings over helicopter usage can be

“We can get a camp running with a single generator burning one drum of fuel a day instead of 20 or so a week”

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IOS

Drilling in Northern Québec

“A boom is the wrong time to invest because everything costs more, and staff become available during the lean time” depended on. L’Équipe Fabconcept is now tooling up to start production – in small numbers at first but ready to meet demand from Canada and beyond. It’s simple, cost reduction relies upon innovation.

The next big thing from IOS neatly complements the Kaskoo-X04. Another huge cost up-country is heating the camps.

Heating fuel easily costs $1,200 a drum in the Canadian north, as it needs to be brought in by seaplane or helicopter. IOS developed a geothermal system for the camps that works on the heat differential between the lakes and the atmosphere. “We can get a camp running with a single generator burning one drum of fuel a day instead of 20 or so a week.” The system is modular, can be installed in two days, and provides air conditioning in the

summer and heating in the Canadian winter.

“That is the kind of technology that keeps us ahead of the competition. If you do not have it, you are left to compete on price alone!”

Remember the analogy of the squirrels?

Being canny with its ‘nuts’ in good times has helped IOS through the rough. Rather than keep large sums in the operation attracting the taxman, part of surplus funds are invested in a foundation set up with local universities.

This allows it to take staff through higher degrees and funds the research. “I simply set money aside to train the staff. Anyway a boom is the wrong time to invest because everything costs more, and staff become available during the lean time.”

As an example, a research project conducted with Sherbrooke University, is

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placing IOS well ahead of the field. The university has no mining department, he explains, but is reputed in environmental engineering – by tapping into this expertise the company has developed a new way to analyse soil samples for their metal in order to trace back the origins of the metals.

The method uses an automated electron microscope of the QEMSCAN (quantitative evaluation of minerals by scanning electron microscope) type, which IOS purchased last year at a cost of $1 million. “If you want to know where the metals are coming from, you

have to know how they were precipitated and that is an exercise nobody did before, at least on a commercial basis. We are at the cutting edge of geochemistry here.” A geochemical survey can easily cost $500,000, he says, and lead to further campaigns costing millions. There is a huge amount of money to be saved by better understanding the metal dispersion processes. “Metal assemblages are dissociated in the secondary environment, so you cannot rely on what you see in a mineral deposit to extrapolate their signal. The relation of uranium and thorium is notorious,

“If you want to know where the metals are coming from, you have to know how they were precipitated and that is an exercise nobody did before”

Kaskoo in the snow

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IOS

Valerie operating the electron microscope

yet, even the big laboratory. That and using the association seen Did you know? is why our mineralogy service in deposit at the exploration is still busy after the worst level can be misleading, recession for years!” thus money wasting.”

1992 Innovation also drives Another technique that the Year IOS was IOS’s business approach. 90 company developed seven founded percent of IOS’s work is in years ago with an investment Canada, though even in its of $250,000 perhaps explains $1 million home province 40 percent is it better than any other. Heavy Invested by IOS for outside companies. “We minerals are separated from in its QEMSCAN open the door for external light minerals by using a dense electron companies to invest in Québec, liquor to ‘float’ off the latter. The microscope which has a mining-friendly medium used has traditionally reputation,” he says, pointing been organic-halogen liquor, a out that Québec is not merely carcinogenic mixture of bromine French-speaking but the only province to be and iodine with organics. IOS developed regulated under French-legacy civil law. The and commercialised an alternative based on mining law is quite unique in North America, tungsten salt. It is safer, cheaper, more flexible and unfamiliar to outside companies. and faster, and proved so successful that it “We’ve helped a lot of small companies to paid back its development costs in a year, at come in. We know the rules and how the the same time securing the future of 15 lab systems work as well as being their guide jobs. “Part of it is a top secret process and to the best service providers or community no competitor has been able to reproduce it

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“Our work goes beyond geotechnology into logistical support for projects, administrative support – we even help companies to do their fundraising on the stock exchange”

Lucie and her microscope

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IOS

Sampling in Taiga

relations. We offer turnkey services based upon integrity”. Its francophony is also a help when IOS is working in countries like Burkina Faso, Cote D’Ivoire, Mauritania or Congo, where trust for a Canadian partner is strong – after all they share a common colonial inheritance!

A good example of this work is the geological lab that IOS helped Mauritania’s Société Nationale Industrielle et Minière (SNIM) to set up. An iron ore miner, SNIM wanted to develop diamond production. IOS personnel established the laboratory, and have overseen management while at the same time training Mauritanian staff to run it. In another current project in Sudan, IOS geologists work with a local company training local crews. In every case IOS is teaching not just the techniques of exploration but about how it relates to the business as a whole, financing, logistics and how the mining business works. “Our work goes beyond geotechnology into logistical support

for projects, administrative support – we even help companies to do their fundraising on the stock exchange.” Broadening their expertise, he believes, helps his clients to manage the cycles for themselves.

All of this accounts for IOS having a healthy order book in the final days of a deep recession. “The industry will bounce back next year and we have to be ready,” says Réjean Girard. “When the bubble bursts, too many companies panic and lay people off. This is not the time to do that: rather get everything in good order and the machinery oiled ready for the next boom!”

IOS

(418) 698-4498 ios@iosgeo.com www.iosgeo.com

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Bringing ore to the surface Pyh채salmi Mine Oy The Pyh채salmi mine is one of the deepest and oldest mines in Europe and has been producing vast amounts of copper and zinc for over 50 years.

As Managing Director, Kimmo Luukkonen explains, even as it approaches the end of its life the mine has much still to give words by

Will Daynes

research by

Abi Abagun

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View of the Pyhäsalmi Mine Oy from the east

ocated in the town of Pyhäjärvi in the south of Oulu province, in central Finland, the Pyhäsalmi mine is an underground copper and zinc mine, owned by Canadian mining corporation First Quantum Minerals.

With a depth measuring 1,444 metres, or 4,738 feet, it is the deepest metal mine in Europe and among the continents oldest.

It origins date back to 1958, when a local farmer came across gossan ore during a well construction. A sample of this ore was soon

L

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delivered to Outokumpu Corporation, which, following analysis of the sample ordered a more thorough geological survey to be conducted on the area. Said survey revealed a rich volcanogenic massive sulphide (VMS) deposit rich in copper and zinc, and come 1959 the decision was taken to open up a new mine at the site of the ore discovery.

The Pyhäsalmi mine opened on 1 March 1962. For the first five years it existed as an open cast pit, before underground mining operations commenced in 1967. Outokumpu

Pyhäsalmi Mine Oy

was responsible for designing an underground development plan for the mine and in 2001 completed the construction of a 1,450 metre deep automated hoisting shaft. A year later the mine was acquired by Inmet Mining, who continued forward with the underground development plan. Fast forward to 2013 and the company found itself being acquired by First Quantum Minerals as part of its purchase of the Inmet Mining group.

“Throughout the history of operations here more than 50 million tonnes of ore has been

successfully mined,” states Managing Director, Kimmo Luukkonen. “Based on the most up to date information available we estimated that we have approximately five years of mine life ahead of us which will take our mining operations into 2019. During this time we anticipate an additional seven million tonnes of ore will be mined, taking the recovered ore from the deposit to around 60 million tonnes in total.”

Pyhäsalmi Mine Oy, a fully owned subsidiary of First Quantum Minerals, charged with operating the mine, today uses non-entry,

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

www.bus-ex.com/mining

Nordkalk and Pyhäsalmi Mine have co-operated for a number of decades. Nordkalk provides Pyhäsalmi with special quicklime, matched to the requirements of existing equipment.

Lime is used in: • underground mine filling • ore dressing to adjust pH • water treatment to neutralize and reduce metal content Nordkalk is the leading producer of high quality limestone-based products in Northern Europe.

The products are used in the metals and mining, paper, and building materials industries as well as in environmental care and agriculture.

www.nordkalk.com

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bulk open-stope mining methods in a primarysecondary sequence. On average, stope size varies from 50,000 tonnes for narrow primary stopes to over 100,000 tonnes for wider secondary stopes. Meanwhile, milling at the mine involves crushing, three-stage grinding, conventional flotation using three separate circuits, and water removal to produce copper, zinc and pyrite concentrates.

“Looking back over the history of the mine one can clearly see that it is a development that has always prospered from the use of the latest technologies, and best practices and processes,” Luukkonen continues. “For its part, Outokumpu has always been recognised for employing cutting-edge technologies, many of which originated from its own in-house research and development division, which was a rare thing to have during the 1970s and 80s. What we have done since taking over operations at the mine is continue to utilise

Pyhäsalmi Mine Oy

Mill control room

“Throughout the history of operations here more than 50 million tonnes of ore has been successfully mined”

new techniques and tools to get the most from the mine, an approach which extends to every area of operation. For instance, years ago the mine employed what was the first Sandvik cable bolter. Today we continue to strengthen our partnership with suppliers and contractors like Sandvik in order to retain our leading position in areas such as automated production drilling and automated loading.”

During 2013, the mine was responsible for producing 14,900 tonnes of copper at an average grade of 1.1 percent, and 21,700 tonnes of zinc at an average grade of 1.9 percent. “Our

figures for last year were very much in line with what we would consider normal for the mine,” Luukkonen says. “Annual tonnage figures have remained fairly stable for the better part of decade now, averaging some 1.4 million tonnes in total per year. Of course, when it comes down to it, you can only mine what you have in front of you, however our processes and methods of operating have always been strong and we feel this is reflected in our results.”

In the 52 years that the mine has been in operation it has been has a massive impact on the region in which it operates, an impact

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Did you know?

1,444 metres The depth of the Pyhäsalmi mine 14,900 tonnes Of copper produced by the mine in 2013 21,700 tonnes Of zinc produced by the mine in 2013 1.1% Average grade of copper Mine surveyor

1.9% Average grade of zinc

“Our job from here on out is to utilise the time we have left here to get the most out of an incredible asset which has already delivered so much”

driven by the fact that when it comes to the town of Pyhäjärvi’s tax income alone, the mine is responsible for contributing one third through the payment of corporate taxes and other associated costs. Meanwhile, it is estimated that another third of the municipality’s tax income comes as a result of indirect effects of the mine. This of course poses a question as to how the municipality will adapt when operations at the Pyhäsalmi mine does come to an end.

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6 years Current estimated mine life 210 Number of employees

Understandably, the end of the mine’s life is an event that the operators are well prepared for, perhaps all the more so as the mine faced a similar scenario in the mid1990s when, faced with only a few years of operations remaining, a new ore body below one kilometre in depth was discovered.

“When it comes to the end of mining operations here, we have to consider the fact that what we have here is an extraordinary asset which is not only among the deepest

Pyhäsalmi Mine Oy

Workers consult manual

mines in Europe, but also one of the only ones to possess access ramps that all vehicles can use to reach the very bottom of the shaft,” Luukkonen explains.

The unique size of the asset and its logistical strengths has already seen it earmarked as the potential base for a number of exciting future ventures. These include being a candidate for future pan-European particle physics research projects. Another potential future use of the mine could be to support pumped-storage hydroelectricity projects.

“While talk of what the future may hold for the mine site is interesting, it is equally as important to consider the future of our skilled, experienced and dedicated work force,” Luukkonen enthuses. “They are the individuals who have contributed most to the success of the mine and as such we are hard at work developing a retention plan.

Although we have no doubt that there will be no shortage of opportunities offer

to our employees once the mine ceases operations, we want to do all we can to recognise their contributions and retain their skills and knowledge.”

Turning back to today and the mine’s outlook for 2014 looks bright, what with production levels of copper, zinc and pyrite all looking to remain in line with previous years. “We are certainly on the right path when it comes to this year,” Luukkonen concludes. “Our job from here on out is utilise the time we have left here to get the most out of an incredible asset which has already delivered so much.”

Pyhäsalmi Mine Oy

+1 416 361 6400 info@fqml.com www.first-quantum.com

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CON

Tailor mad

Managing Director, Michel Maalouf d and a drive to deliver results have co words by

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Will Daynes

research by

NCIEL

de success

discusses how a passion for creativity ontributed to the success of CONCIEL

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ounded in 2005, its focus being to provide clients with management consulting and IT solutions, CONCIEL has expanded over the subsequent years to become a business tasked with solving its customers’ mission-critical problems through the innovative application of technology and expertise.

Driven forward by a team of people, who together are empowered to go the extra mile for its clients by delivering outstanding value and productivity, CONCIEL has always believed that its success has been built upon the fact that it creates fundamental and tangible results in all of its competence areas, as opposed to quick fixes.

“The last year has been one of exponential growth for the company as we have expanded into new areas of business and new countries,” explains Managing Director, Michel Maalouf. The expansion that he speaks of has seen CONCIEL spread its wings in recent years into telecommunication services and more recently data centres.

“Up until 2013, I was working for another business in parallel to CONCIEL which specialised in the telecommunications side of the business. Since that company was sold we have brought all of core services, both old and new, under one umbrella, that being CONCIEL.” The work that CONCIEL in its new,

F

“The last year has been one of exponential growth for the company as we have expanded into new areas of business and new countries”

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CONCIEL

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consolidated form carries out can be broadly separated into two categories, one being solutions and the other services.

“The products and solutions that we sell and implement for our clients themselves fall under three headings, software, data centres and telecommunications,” Maalouf continues. “Particular software products that we see continue to see strong demand for include Electronic Document Management Systems (EDMS), Computerised Maintenance Management Systems (CMMS) and Risk Business Inspection (RBI) tools. However,

as some will know, software on its own is of little or no use without data, which is why we work to provide a full turnkey service that encompasses all of our solutions.”

Turning to the types of service CONCIEL is able to provide, these fall into the categories of consulting, training and engineering. “Our consulting services are primarily targeted towards management consulting and are often tied to a client’s desire to attain certain certifications, typically ISO:9001,” Maalouf explains. “From a training perspective our efforts tend to centre on management

“We have at our disposal vast experience and a range of services and solutions, and we want to be able to offer them remotely to anyone who wants them”

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CONCIEL

and IT support, while our out its expertise and its ability Did you know? engineering services are very to provide a one-stop-shop for much focused towards the their needs. In addition to those telecommunications and data from the telecommunications 2005 centre aspects of our business. sector CONCIEL also lists The year that When it comes to the latter we clients from the oil and gas, CONCIEL was are able to design data centres facility management, food founded from the ground up, from the and beverage, manufacturing, building of the structure to logistics and water industries. the installation of electronic A diverse mix indeed, but and electrical requirements, through the they all share the fact that they identify supply of relevant products and equipment CONCIEL as the best provider for their needs. and their implementation. It is essentially a “I would say our greatest strength is that we case of starting with a blank sheet of paper believe in creativity and that we never look to and an idea, and ending with a tailor made impose an idea or a particular product upon solution.” a client,” Maalouf enthuses. “If a particular Across the markets that CONCIEL operates solution doesn’t fit the specification of the in, which today include Nigeria, Sierra Leone, client we will work to find one that does. It all Ghana and the Congo, a number of clients comes back to delivering tailored solutions from a variety of different industries seek that are individually relevant to each client.

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CONCIEL

“The other thing we want to improve upon is the way we utilise remote application tools, so things like cloud technology”

We are not the type of business looking to sell the same product to hundreds of clients; rather we are driven by the desire to sell them exactly what they need, which in turn provides them with the best end result.”

This is an exciting time for CONCIEL, one that sees the company continue to build on the growth experience in 2013. In doing so it has brought to market several new solutions and services that the market has begun demanding. The first of these comes in the form of hosted application outsourcing.

“This is where we actually outsource a particular application and instead of the client having to then support that by setting up the servers and infrastructure needed to house the application we offer to host it ourselves on our own servers, providing access to the client in question,” Maalouf says. “The first thing this means is that months do not have to be spent implementing a top to bottom solution for certain clients, rather what we can implement the application remotely.

It also means that the support service we provide can be delivered faster as our team can gain immediate access to the server in question. So any client, based anywhere in the world, is able to gain easy access to our solutions without us having to travel miles to set them up.”

Another area of excitement for Maalouf and his staff has been the introduction of the company’s Data Centre Information Management (DCIM) solution. “In the last decade the concept of data centres has picked up considerable steam and as such there is an increasing demand for related

software and solutions,” he says. “What we have developed here is a solution that is very new for the industry and is a one that we look forward to being able to provide as an added value offering to both our existing and new data centre clients.”

For the time being Maalouf has a clear strategy that he intends to follow through with in the months ahead, one which revolves around continuing to service CONCIEL’s existing clientele, while at the same time seeking out potential new customers.

“The other thing we want to improve upon is the way we utilise remote application tools, so things like cloud technology,” he concludes. “I want to get our business to the point where even management consulting is something we can provide remotely. This would allow us to provide a more efficient and less time consuming service to our clients.

We have at our disposal vast experience and a range of services and solutions, and we want to be able to offer them remotely to anyone who wants them. This is something that is all the more vital considering our own location, that of our clients and of course their ever-evolving needs.”

CONCIEL

+337 8248 8844 info@conciel.com @CONCIELT www.conciel.com

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