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DECEMBER 2010 www.bus-ex.com
Business Excellence Online
Know
who
yourfriends are
If you treat your customers as your friends, you will benefit from their success
EXCELLENCE BUSINESSEXCELLENCE
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Editor’s letter
Mad
dogs
EDITORIAL
Managing Editor Becky Done bdone@bus-ex.com Editor In Chief Martin Ashcroft mashcroft@bus-ex.com
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andCanadians According to Noel Coward, mad dogs and Englishmen go out in the midday sun. I’m not sure about the dogs, but who but a Canadian would venture into some of the coldest, remotest places on Earth, braving the most challenging and dangerous conditions to supply the rest of us with resources we tend to take for granted? It takes some guts, and not a little ingenuity, too. Margaret “Peggy” Kent has built an entrepreneurial career by taking over other people’s failures and managing them carefully back to health. Her current project, Tamerlane Ventures, is employing some interesting technologies to return the Pine Point Mine near Yellowknife in Canada’s Northwest Territories to full production. When the mine was closed by Cominco in 1987, the town closed with it, but the growth of air transport means that modern mines no longer need permanent towns to support the workforce. Summit Air is a charter air service which exists to take clients to remote places like this. With an innovative approach to business, one of its most impressive credentials is the way it compensates its pilots. Rejecting the industry norm of rewarding pilots according to the hours they fly, Summit Air pays them a salary, removing the temptation for pilots to make critical decisions based on financial returns. You don’t take safety risks in regions like this. President and chief pilot Dave Mathieson describes what it’s like to operate in the NWT. “It’s one of the most extreme places you could be flying on the planet. You are unsupported, you’re thousands of miles away from anyone or any help, and you’ve got to depend on your training and your ability to keep the passengers and crew safe.” Check out these and the other articles we have about Canadian industries in this issue, including the equally remote mines being developed by Selwyn Resources in Yukon Territory, and Baffinland Iron Mines in Nunavut. They all have fascinating accounts of human endeavor in inhospitable surroundings. The content of this magazine is copyright of Infinity Business Media Ltd. Redistribution or reproduction of any content is prohibited other than: - You may print or download to a local hard disk extracts for your personal and noncommercial use only. - You may copy the content to individual third parties for their personal use, but only if you acknowledge the magazine as the source of the material. You must obtain our written permission to commercially exploit any content.
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SUPPLY CHAIN: Customer service Know who your friends are Suppliers who treat customers as their friends, helping them to grow their businesses, will benefit from their success. STRATEGY: The role of the CFO The great escape The CFO has changed from a day-to-day manager into a strategic thinker, shaping company value and exit strategy.
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OPERATIONS: Information technology Candy, cakes and PLM Which way should you go when you arrive at a technology crossroads? Thomas R. Cutler has some tips for the food industry.
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Permasteelisa North America Ready for the storm This innovative construction supplier has refreshed its factory and refurbished equipment, ready for the upturn.
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LXD LLC A display of confidence From screens for digital watches to one of the biggest players in high reliability displays for use in industry.
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Severn Trent De Nora Water magic A leading provider of innovative water disinfection systems to the marine and offshore industries.
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Summit Air Rare air A charter air service operating out of two locations in Canada, taking its clients to the remotest places.
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Tamerlane Ventures Riding the metals wave Using some innovative technologies to return the Pine Point mine in Canada’s Northwest Territories to full production.
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AIDEA On top of the world Constructing the DeLong Mountain Transportation System made the development of the world’s second-largest zinc mine possible.
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Contents Deep Down Inc. On the acquisition trail A Texas-based company playing a key role in consolidating services for the worldwide offshore oil and gas industry.
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Selwyn Resources Visionary steps A Canadian junior exploration company developing the world’s largest undeveloped zinc-lead deposit.
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Alexco Resource Corp. Sparkling opportunities A precious metals exploration company with its first active mining project gearing up for commercial production.
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Baffinland Iron Mines Worth waiting for The history of the iron ore deposits at Mary River in Nunavut, Canada, is a tale of politics, perseverance and hope.
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Timmins Gold Adding up the ounces With its San Francisco Gold Mine in Mexico coming online early in 2010, production is on its way to reaching 100,000 ounces per year.
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Odebrecht USA Crescent City credentials Playing a major role in the construction of flood defences for New Orleans with its work on the Kenner Floodwall project.
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Schunk Graphite Technology Brushing up Developing and producing the carbon products so vital to many of our everyday appliances.
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Hansgrohe Inc Quality on tap The group’s US operations reflect the quality of a washroom design icon with double the standard industry warranty period.
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Aqua America An acquiring mind Growing through more than 130 water and wastewater treatment acquisitions since the 1990s.
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Know
who yourfrien If you treat your customers as your friends, says George F. Brown, Jr,
I
n 1970, Walt Kelly had his famous comic strip character Pogo use the phrase “We have met the enemy and he is us” in an Earth Day poster. Since then, we’ve seen it applied in diverse settings, from discussions of information overload to the road system to our nation’s challenges in Afghanistan. It is one of the universally applicable truths, and it applies to the most difficult leadership challenges faced in many companies.
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ondsare you will benefit from their success
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Every year, the Conference Board surveys CEOs to rank their most important challenges. In 2010—and in many earlier years—the challenge on the top of the list was “sustained and steady top-line growth”. We believe Pogo’s message provides an insight relative to this challenge. “We” aren’t going to provide the answer, at least not the whole answer. The firms that try to address their growth challenges on their own aren’t going to be successful. The firms and leaders that look outside of their walls for solutions are the ones that we will read about in a few years in articles about companies that “get it” and are rewarding their shareholders.
“It is critical to see your customers as your friends. They are the ones that will de by telling you what challenges need to be overcome in order to become the subje We recently published a book on growth strategy with a simple and explicit message: overcome your growth strategy by helping your customers overcome theirs. The title of the book, CoDestiny, reflects that message. And we’ve seen it in practice over and over. We’ve interviewed thousands of executives over the years about their suppliers and in the process, asked them to tell us a “success story” involving a supplier. Almost every one of them had a success story ready to share—and most of them had many. None of these success stories involved suppliers that cut their prices by a nickel or figured out how to quit showing up late with deliveries. What they involved were suppliers that helped them to grow their own business, to reach new customers, to deliver a superior product, to move up the “GoodBetter-Best” spectrum, or to get to a critical competitive price point by taking costs out of manufacturing or logistics or warranty or some other costly process. In other words, the success stories involved suppliers that helped their customers grow. They created value, and in the process captured some of it for themselves. The solution is with “them”, not just with “us”. At a recent off-site meeting with one of our clients, we provided their executive team a short quiz. We gave them the following descriptions of “supplier success stories” by three customers of a supplier in a different industry and asked them to characterize the supplier about which these customers were speaking: 1. “As you know, we’re in an industry defined by short product life cycles. And if the customer looks at our catalog
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efine the route to success, ect of success stories�
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and doesn’t see anything new, it motivates them to see if our competitors have leapfrogged us. This supplier came to us with an idea that would allow us to update the product as often as we wanted, reducing to next to nothing the typical time required by our suppliers to adjust to a new release. We are always cited in the surveys for new product innovation and our engineers now can implement a modest upgrade without the organization having to go through hoops to implement it. At this point, supplier x gets all of our business.” 2. “We all had a lot at stake with this new product and were surprised when a performance issue surfaced. We had two suppliers at this point, and expected supplier y to say “What can we do to help?” Instead they said “We recommend you go back to the drawing boards.” This was communicated at upper management levels first, which really caused havoc with our technical team. Money was on the table and
“The success stories involved su process capture
careers were at stake—they just didn’t understand the seriousness of what we needed to have done. One of our engineers talked to supplier x. It turned out that they had faced a very similar problem with one of their customers in Europe, and they flew in two engineers who spent a month with us and got the problem resolved.” 3. “They provided us with one of the great surprises of the year. One day, they brought a team into a meeting, demonstrated a new approach, and showed us how we could eliminate a significant amount of materials—which we were buying from them, by the way—and eliminate two steps in the manufacturing process. It has saved us a lot of money and put them in a great competitive position in terms of costs.” The executive team members at this meeting concluded that the supplier being described was a high technology firm, probably supplying the cell phone or computer market. Their descriptions of this supplier brought forward images of laboratories, teams of scientists and engineers, and a very busy team of patent lawyers. In fact, the company being described was a packaging supplier, one whose products were, by the company’s own description, “pretty darn basic” and their unit costs were measured in cents and fractions of cents. While this packaging firm did own a few patents, by and large their business would be characterized by most observers as a commodity business. Nonetheless, this company’s customers considered this firm to be one that could bring substantial value into their relationships. There are three approaches to value creation that can form the basis for success in business markets, and it is a firm’s
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customers that can provide the details on these routes to success. First are innovations that make a contribution to merchandising and marketing for the supplier’s customer, ones that enable them to gain market share or command premium prices or both. Often, the end customers in such markets are looking for “something new,” a step-out offering from the manufacturers and their suppliers. The first success story in the case study fell within this category. The packaging innovation brought by this supplier to its direct customer was a significant contributor to the merchandising
minor process changes, at the price point that had been targeted. The third example in the case study involved the concept of “taking costs out of the system” or otherwise improving the processes and competitiveness of the supplier’s customers. Often, these types of value contributions are invisible further along the customer chain, only involving process changes, material substitution, or shifts in the roles and boundaries between the supplier and its direct customer. The supplier in this case study, understanding how its customer used its
uppliers that helped their customers grow. They created value, and in the ed some of it for themselves. The solution is with ‘them’, not just with ‘us’”
strategy for the products involved, helping the firm to establish its position as an innovator, constantly bringing enhancements to their product line. The packaging firm’s contributions eliminated one of the firm’s barriers to fast product introduction, enabling a near-instant ability to evolve the packaging in concert with the products’ evolution. The second example involved an initiative that helped the supplier’s customer resolve “technical” challenges. In every industry, there are important technical challenges facing each supplier’s customers. Often, end customer purchase decisions depend upon the manufacturer’s success in meeting these technical challenges, which will be among the ways in which the manufacturer differentiates itself from its competition. Technical challenges can involve virtually any dimension— product safety, performance, reliability, shelf life, etc—that matters to the end customers. The problem faced by the supplier’s customer in the case study was one of leakage, with a host of “bad implications”—significant returns and wastage, end customer dissatisfaction, etc. While the cause of this problem involved a change in the chemistry of the product from its previous generation to the new one, the solution involved a modest change in the packaging materials and filling process. The solution enabled the firm to launch its new product on time and, after a few
packaging to protect its own product, reengineered their offering to achieve the same level of protection with a simpler packaging solution. While it’s not critical to see your own company and employees as the enemy, it is critical to see your customers as your friends. They are the ones that will define the route to success, by telling you what challenges need to be overcome in order to become the subject of success stories. Get your firm to focus on CoDestiny relationships, solving your customers’ growth challenges. In the process, you’ll find the solutions to your own growth challenges. George F. Brown, Jr., is CEO and co-founder of Blue Canyon Partners, where his practice allows him to contribute to solving clients’ business-tobusiness growth challenges. He has held senior leadership roles in a number of organizations, including DRI/McGraw-Hill and ICF Kaiser International, Inc., and served as the Theodore Roosevelt Professor of Economics at the US Naval War College. He has published extensively in academic and business journals and testified frequently before Congress. He is co-author of CoDestiny: Overcome Your Growth Challenges by Helping Your Customers Overcome Theirs (Austin, TX: Greenleaf Book Group Press, © 2010)
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Candy,
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Which way should you go when you arrive at a technology crossroads? Thomas R. Cutler highlights the experience of a few companies in the food industry
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eadquartered in Stamford, Connecticut, DeMet’s Candy Company makes TURTLES and FLIPZ products. DeMet’s is dedicated to using the highest-quality manufacturing processes and working with cutting-edge technology to maintain its brands. DeMet’s Candy products are distributed through supermarkets, drug stores and virtually all channels of trade. DeMet’s Candy purchased the US portion of the TURTLES business from Nestlé along with the facility that produced TURTLES. This facility was using SAP to run its operations and DeMet’s was required to move off the Nestlé SAP system. What was especially challenging for DeMet’s was the tight implementation schedule imposed by their purchase agreement with Nestlé: they had three months to get off SAP before they were liable to pay for their use of the SAP system.
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DeMet’s other existing facilities were using Sage MAS 500 but DeMet’s had a limited degree of confidence that Sage was up to the task of managing this new facility on top of the existing facilities. After two attempts, they were not able to get accurate inventory tracking even after working with two different Sage resellers. They decided to invest in a completely new ERP (Enterprise Resource Planning) system. With an outsourced IT department, DeMet’s was looking for a solution that did not require dedicated IT resources. After working with MAS 500 and not having easy access to Excel and Word they decided they wanted everything to integrate into Microsoft Office. The decision was made to
associate the product in question to a specific lot number. With this information, the company can analyze quality issues on a lot-by-lot basis. The Original Cakerie began in 1979 as a small industrial bakery producing high quality food service desserts for the local restaurants in British Columbia. Guided by the concept of creating delicious desserts with a homemade taste, The Original Cakerie has grown to be the largest privately owned dessert manufacturer in Canada with North American distribution coast to coast. The Original Cakerie sees a direct link between technology and the ability to anticipate and adapt to growth. Eric Murphy, manager of IT for The Original Cakery, sets the scene. “We did not have one
“The three month implementation goal was met and we rolled out the software to all three facilities progressively and on time” standardize on a Microsoft platform for ERP too. DeMet’s sister company, Stella D’oro, was already using Microsoft Dynamics NAV successfully but this implementation had a high degree of customization. With the tight implementation schedule, DeMet’s needed a Dynamics NAV partner who had already developed the functionality most food companies require as part of an out-of-the-box solution. The choice was to work with JustFoodERP. “Flexible enough to meet our needs, we changed a few of our procedures that the new software addressed with better industry practices,” noted Jim Gerbo, vice-president of marketing for DeMet’s. “Aside from having accurate data and a fast implementation, we were up and running, live, on time and on-budget. The three month implementation goal was met and we rolled out the software to all three facilities progressively and on time,” said Gerbo. With three facilities all needing to go live, DeMet’s utilized the adaptability and scalability of the new ERP system. The company also plans to integrate its consumer affairs into the new ERP system, because it will allow it to respond to consumer inquiries much more easily. Consumer representatives will be able to take a call from a consumer and instantly
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integrated system in place, which created data silos and a lack of data visibility.” The Original Cakerie was using many internally built applications backed by Great Plains on the financials side. These homegrown systems were not able to sustain the challenge of business growth and it was time for The Original Cakerie to adopt an Enterprise Relationship Management system. Having a history for raising the bar on product innovation in the plant, the management team was already open to working with new technologies. They began their search by going through an extensive evaluation, as Murphy explained. “We evaluated thirty different solutions, sent an RFI to twenty of them, and from there we sent an RFP outlining our business requirements to those companies that we thought might be a fit. We brought in three companies for a demo. It came down to two solutions that were a possible fit to work with; IFS and JustFoodERP.” Like DeMet’s Candy Company, The Original Cakery team chose JustFoodERP, a solution for the food industry powered by Microsoft Dynamics NAV. They too thought the advantages included a user friendly and extremely adaptable system. Since The Original Cakerie had already been
Operations
using Microsoft Great Plains for ten years as its financial system, Microsoft credited them in full on what they had already purchased through the Transformational Assurance program. “This was a great gesture and showed that Microsoft valued our partnership in making this investment,” said Murphy. With eighty users going live simultaneously, the implementation was for a configuration of all of Dynamics NAV modules from financials, payroll, human resources, fixed assets, and TargIT; to the JustFoodERP modules of manufacturing, quality control, and preventive maintenance. One enhancement developed to meet a specialized need of The Original Cakerie was a labor scheduling granule. The company wanted its employees to have the ability to pick the days they wanted to work and the hours they wanted to work. “Systematically this was a very complex solution, but it was also an incredible opportunity for employees,” said Murphy. After a successful implementation that took approximately nine months, The Original Cakerie had the benefit of a company wide integrated system that centralized all of its business processes and eliminated redundancy. Though the technology was in place, there were some small growing pains. These had to do with a change management challenge. “After twenty seven years of the organization working one way, having the system integrated creates some impacts to the rest of the business units,” explained Murphy. The Original Cakerie has been building a set of new procedures so that each business unit sees how it affects each other. The benefit of working through these growing pains is that they have greatly enhanced the overall business framework. The anticipated benefits are positive financial gains. The company is already getting a very deep insight into its financial health. Product lifecycle management in the food industry Responding quickly to market trends with profitable, successful new products is the only way to achieve success in the hyper-competitive, margin-thin food and beverage marketplace. Candy, cakes, or other foods, new products that drive revenue and meet customer and retailer demands are essential (while complying with stringent regulations.) Even one failed product
development initiative is too costly. PLM (product lifecycle management) for food and beverage must seamlessly integrate all aspects of product development within a food organization and across the supply chain from formulas to labeling and packaging to compliance validation. Streamlined product development, accelerated revenue, reduced costs, ensure quality and compliance, and increase the chances of a “hit” food product. Dan Rowe, product manager at JustFoodERP explains: “It is essential that full electronic lab notebook functionality incorporates all internal and customer communication, workflow, and document management. Food companies must incorporate lab versions to track changes in nutritionals and ingredient declaration as well as track all R&D costs associated to their work for the purposes of tax credits.” PLM features capture for the food industry must include: Opportunity management and tracking. Track all custom projects on the go. Analyze winrate by customer; a vital tool for weekly update with R&D. Fully integrated documentation management. Retain all records associated to the R&D process from concept to production ramp-up. Manage customer communication. Record all interactions with customers (in the event they change their mind on version 41 and want to revert to version 14.) Full approval workflow. If a food company uses a formal stage/gate process, record approvals on documents electronically. Track recipe versions. Track changes in recipe versions, incorporating all elements of costing, ingredient declaration, and nutritional analysis. Track R&D costs. R&D teams record costs and time effort against each project allowing full visibility on investment return, also useful for making R&D claims for tax credits. Thomas R. Cutler is president & CEO of Fort Lauderdale, Florida-based, TR Cutler, Inc., and founder of the Manufacturing Media Consortium of journalists and editors writing about trends in manufacturing. www.trcutlerinc.com
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Strategy
The
great
escape
Bob O’Hara describes how the role of the CFO has changed from day-to-day management into that of a strategic thinker, shaping company value and exit plan strategy
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he conventional definition of the chief financial officer may be “manager of the day-to-day financial risks of a corporation;” however, in recent years this description has expanded with an increasing number of CFOs playing a pivotal role in building an organization’s business value toward an exit strategy. And with good reason; business value is a corporate component that should never be underestimated, and no one understands this better than a company’s CFO.
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While “increase sales” is far too often the primary mantra of business owners—particularly during tough economic times—what is forgotten is the attention that should consistently be paid to the future. The eventual need or desire for the “great escape” will occur and this is one area where the talents of a professional CFO come to the fore. As a company moves toward an exit or succession goal, a strong strategic planning process is a must; here is where guidance from the CFO can be crucial to the targeted outcome. Elements of the exit planning process include the
“An organization that is wholly dependent upon the owner creates a weak link to the future as all responsibility rests there; however a business overseen by a team of key management players, including the CFO, has a process in place that can better build productivity and cash flow” company’s strengths, weaknesses, opportunities and threats, aspects that the CFO can assist a company’s owner/CEO to identify. Implementation of an exit strategy can be led by the CFO as he/she has the ability to develop effective financial controls that monitor and minimize expenses, and maximize profits and cash flow. However, capitalizing on enterprise value for the long-term is not a solo endeavor. An organization that is wholly dependent upon the owner creates a weak link to the future as all responsibility rests there; however a business overseen by a team of key management players, including the CFO, has a process in place that can better build productivity and cash flow—in addition to adding value to the table when the time comes to sell the business. Developing plans that provide incentives for key employees to assist senior management in building business value is an area where today’s CFO can take an active role. CFOs can assist in identifying employees’ specific talents and recommending how these skills can be utilized and amplified. Employees who are allowed to explore their talents find increased meaning in their work, embrace an “ownership mentality” and create broadened parameters not only for their success, but also for that of the company. Assisting in the increase of company efficiencies also comes under the auspices of today’s CFO.
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By connecting key employee incentives to a company’s broad mission and scope of values, an organization can create an environment that fosters success for today and in the future when an exit plan takes action. The responsibility of the CFO also includes the review and adjustment of business strategies to minimize taxes upon an eventual sale or transfer of the business. It is imperative of the CFO to review the company’s corporate tax structure on an ongoing basis in order to maximize the amount of proceeds resulting from a future sale. On balance, the functions of the CFO are many— to work with business owners to manage their accounting and finance departments, connect with business sources that can help the company grow, interact with employees to increase efficiencies and provide financial data to help make strategic long-term or day-to-day decisions. Ultimately, however, today’s CFO is a strategic thinker, able to assist in leading not only a company’s executive team but also its entire workforce in adapting to change. Bob O’Hara is president/CEO of O’Hara & Company, PC, founded in 1995 to address the growing need for entrepreneurs to create a comprehensive exit strategy from their businesses. www.oharaco.com
Strategy
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I
t’s perhaps best not to talk about it too loudly but there are signs that the North American construction market is starting to stir once again; at least in the commercial sector where architectural envelope specialist Permasteelisa operates. “More developers are recognizing that the timing is good to get the best value for money,” says Carlo Eisner, VP operations. “Construction costs are presently less than they were two years ago and certainly less than they will be in three years time.” It seems that’s exactly what architects and clients are trying to do. Where once the bidding process for a new building might have taken several weeks, it’s now counted in months as requests and counter suggestions are batted back and forth in order to give the architect the most economical combination of desired look versus minimum cost. It’s here where Permasteelisa’s credentials really come into play. It’s not yet the largest contractor of its kind in North America but on the global stage, Permasteelisa is a force to be reckoned with. Some of the most iconic buildings in the world are on its list of achievements: the Guggenheim Museum in Bilbao, the European Parliament Building in Brussels and even the Opera House in Sydney all wear Permasteelisa’s products. But for every new signature building, there are a dozen or more ‘make do and mend’ projects that are causing new techniques to be developed. “Our feeling is,” says Eisner, “that instead of pulling down ‘old’ buildings, re-cladding will be with us for years to come. Not only that, but developers don’t want to forgo rent revenue so we are being asked to put up new curtain walls while buildings remain occupied, making the job much more difficult.” On an empty shell, part of the work is performed from the inside and certainly interiors are used for storage. But when the building is occupied, none of that is possible. With available space minimal at best, planning and scheduling of materials to the site becomes critical. New erection techniques have to be developed and new erection tools created. “On this type of project,” says Eisner, “it would be easy to
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Rea
However c Alan Swab
Permasteelisa North America
for
ady the storm
clever the internals might be, a building is judged from the outside. by talks to one of construction industry’s most innovative suppliers
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waste time unless the planning and timing were precise. We are looking to shave minutes off every panel we erect by using the right equipment.” Architects are always looking for ways of expressing their individuality and Permasteelisa is more than willing to help. Working with long standing suppliers of marble based in the Carrara district of Italy, Permasteelisa has collaborated on the design of a new lightweight option to conventional marble. “Normally,” explains Eisner, “façades are clad with sections 1.25 inches thick. We now have a new material made from two 3/8 inch thicknesses of stone laminated together to provide higher strength and less weight. We are using this for the first time on a New York project where the composite slabs are being decorated by water jet etching. In this particular case, the architect has opted for a tree motif so panels have to be decorated individually so that once in place, the tree trunk and branches become apparent.” It’s a bit of a paradox that the straightforward jobs are less attractive to those working on them than those that create challenges. A new 80 storey residential project in New York is a case in point. Curved glass is, in itself, nothing new but it’s usually convex and located at the corner of buildings. Here, the design calls for concave curves along the façade. Technically, bending the glass is not the problem. It’s how best to maintain the aesthetic continuity of the glass. “The coating used on straight glass,” explains Eisner, “can’t be applied to curved glass. So the search is on to find a bendable coating that will give the thermal performance specified while matching as closely as possible the straight glass.”
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Permasteelisa’s R&D engineers are at the heart of questions such as this on a daily basis, but even more so in the longer term search for sustainability in the design of modern buildings. Considerable work is being carried out, particularly in the home country Italy as well as the US, with university departments to develop new products for a design trend known as dynamic buildings. The 1987 Bruntland report identified buildings as the
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major source of the pollution that compromises urban air quality and produces the pollutants that contribute to climate change, making the need for sustainability a high priority. Permasteelisa has developed a number of systems designed to enhance the comfort and working conditions for tenants—particularly for buildings with all glass façades. In an approach they have dubbed Blue Technology the aim
Permasteelisa North America
“Construction costs are presently less than they were two years ago and certainly less than they will be in three years time” is to integrate the façade with the building’s environmental system rather than treating them as individual components. This way a more sustainable approach to resource conservation becomes possible, including energy efficiency, renewable energy and water conservation. On a less grand scale is the question of how aluminum frames should be coated. In Europe the switch to powder coating took place decades ago but North America has been slower to adopt. However, as every little green contribution is now being considered, solvent based wet coatings are gradually being superseded by electro-statically applied polyester powder. Such coatings are said to be more economical and durable and have the
added advantage that surplus material can be collected from spray booths and re-used. Permasteelisa has also gone green in the way it works. Instead of thousands of individual detail drawings being printed, the factories have now gone digital, just in time for a surge in business. Already, the machine shops are working double shifts and soon it will move to three shifts. “We have used the last couple of years to clean up the factory and refurbish equipment, ready for the storm as the industry gets up to speed once more,” says Eisner. “The difference this time though, is that margins are going to remain tight for some time so there will be absolutely no margin for error.” www.permasteelisagroup.com
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Todd Bolanz, president of LCD manufacturer LXD LLC, tells Jane Bordenave how the company grew from producing screens for digital watches to being one of the biggest players in high reliability displays for use in industry
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ounded in 1971 by Dr. Jim Fergason, LXD LLC was one of the first producers of LCD technology in the world. While the firm originally produced LCDs for digital watches, it now manufactures and distributes specialist screens for industrial applications. It is a private company headed up by president Todd Bolanz, a trained electronic engineer.
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“Our customers want a complete, fully integrated solution that they can just plug in and use in their unit” Where LXD has really made a name for itself is in the manufacture of displays that can withstand extreme temperature ranges—from -67ºF to +252ºF. Because of these capabilities, LXD products are used extensively in outdoor applications such as on oil platforms, in mines and in fuel pumps, the company’s largest market. One of the ways that it has fostered this reputation is by responding effectively to evolving customer needs. “In the early days of LXD, we provided what was really just glass or glass with pins on it. It was then up to the customer to take it beyond that with their own controllers and their own methods of development,” says Bolanz. “Today we now offer our clients more of an integrated solution and provide more value add. For example, we now have greater demand for flexible solutions in terms of circuitry interfacing, or what we call ‘controller ICS’. What this means is that our customers want a complete, fully integrated solution that they can just plug in and use in their unit.” To keep up with demand for new and innovative products, the organization is investing heavily in technological advances. An increased demand among customers for full color displays, rather than the traditional monochrome that LXD is known
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for, is an important area for development and sales are already taking off. Aside from demand led innovation, the company is also committed to providing improved products to its customers independent of their requests. “Currently, we are focusing on improving response times,” says Bolanz. “That is to say that we are working to ensure that the displays work as effectively and as rapidly at very low and very high temperatures as they do in normal conditions.” A high degree of customization is also a cornerstone of the LXD business philosophy. The company does not dictate specifications to the customer, but encourages the customer to present its exact specifications. “We actually tell our clients ‘do not design your packaging around the LCD screen—we will make the display work around you’,” explains Bolanz, “What this means is that their finished product is exactly the way they want it to be; they can design their packaging to be sleeker, more high-tech and generally more appealing for their own customers.” In order to carry out its research and development activities, LXD has established a facility in Research Triangle, Raleigh, North Carolina. The 30,000 square foot facility, which
LXD LLC
opened in September, will be used exclusively by the engineering and research division. In addition to providing cutting-edge developments, the new facility will enhance the company’s sales and distribution efforts in the east of the country. When it comes to competition, undercutting is a problem for many companies, especially in the high-tech arena. However, Bolanz is fairly philosophical about this challenge and confident in the firm’s pricing strategy. “Our products are clearly not the cheapest in the market place, but when you buy from us it is an investment. We will provide you with a very high quality product. Our strategy is to be as competitive as possible, while still meeting the performance needs of our
customers; that is what is important.” As part of its strategy to remain competitive and offer its clients better service, the company has taken the decision to bring production in-house with its own manufacturing plant in China. “This is something that really does separate us from the competition. Customers do not have to deal directly with a manufacturer in China in order to get their product—they can work with us here in the United States and we will take care of that whole side of the supply chain for them,” he says. Part of the company’s success in being a major player in the LCD market has been its consistent approach in treating each customer as an individual. “Because of the amount of custom
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LXD LLC
“Within the next five years we will be growing the range of solutions we provide even beyond just the LCD display screen” work we do, we try to work as closely as possible with the client,” explains Bolanz, “and every one of them is different in terms of what customization they will require. We work to give them exactly what they want at the same time as providing them with the most cost competitive and best performance unit out there.” For the future, LXD’s focus is on providing its customers with an increased level of value add in its products. “The new facility in North Carolina will really enable us to better meet our
clients’ needs and offer them products that are even more integrated than those that we have on offer currently,” says Bolanz. “Within the next five years we will be growing the range of solutions we provide even beyond just the LCD display screen.” These are ambitious plans, but when looking back over the forty year history of the company, from watch screen maker to one of the biggest names for high reliability displays in the LCD industry, there is no reason to doubt that the five-year-plan will become a reality. www.lxdinc.com
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Wat Rob Harris talks to Severn Trent De Nora, a leading provider of innovative water disinfection systems to the marine and offshore industries
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ater is undoubtedly our most precious natural resource—we can’t live without it, yet only three percent of the world’s water resources are fit for human consumption and almost 97 percent are in the oceans. As a result, protecting our waterways is an important part of being environmentally conscious, even if it attracts rather less publicity than climate change and reducing carbon footprint or greenhouse gas emissions. The International Maritime Organization (IMO), a specialized agency of the United Nations, exists to develop and maintain a comprehensive regulatory framework to reduce pollution and protect our global waterways. As IMO regulations for marine sewage discharge and ballast water treatment become more stringent, Severn Trent De Nora is leading the charge to provide clean water, with a clear conscience. For more than thirty years, the company has been offering innovative electrochlorination disinfection treatment solutions for marine sewage and ballast water treatment.
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Severn Trent De Nora
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“Both of ou equivalent
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Severn Trent De Nora
At its facility in Sugar Land, Texas, Severn Trent De Nora manufactures marine and offshore industrial water disinfection products. “The hub of the oil and gas industry worldwide is in Houston, Texas,” explains director of operations Frank Martin. “Sugar Land is a suburb of Houston. We started here primarily to be close to the oil and gas industry.” Severn Trent De Nora manufactures marine sewage treatment systems in sizes ranging from small complement systems for yachts, work boats and vessels up to large complement systems for offshore platforms and FPSOs. The company also manufactures electrochlorination disinfection systems ranging from small offshore installations to large power and desalination plants as well as ballast water treatment systems for oceangoing vessels.
r products incorporate seawater electrochlorination to generate a chlorine disinfection solution onsite, using common and readily available materials” Two of the premier products manufactured at the Sugar Land facility are the OMNIPURE™ marine sewage treatment system and the BALPURE® ballast water treatment system. Both products use the company’s proprietary electrochemical disinfection process. David Hill, the company’s engineering manager, explains the process. “Both of our products incorporate seawater electrochlorination to generate a chlorine equivalent disinfection solution onsite, using common and readily available materials,” he says. “Seawater, roughly 3 percent salt, is used with electricity to generate a sodium hypochlorite solution for disinfection purposes. In simplest terms, it’s bleach, but instead of it being 5
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percent, as household bleach is, our products are down to one percent or less.” Both OMNIPURE and BALPURE are designed to meet and exceed the current IMO regulations while offering treatment solutions that are safe to operate and maintain. Dana Casbeer, product line manager for the OMNIPURE sewage treatment system, explains. “The OMNIPURE treatment system meets the stringent MEPC.159(55) regulations and can be custom built to fit anything from a stationary platform or rig to smaller passenger vessels and work boats. The system produces an effluent that is clean and clear, while presenting customers with a proven, safe method of handling solids. “The solids we discharge from the OMNIPURE unit have been sanitized,” he continues. “They have been treated to a degree to where they are safer to handle than those from our competitors’ units. We differentiate ourselves by presenting our customers a treatment solution that treats solids meeting a Class B Sludge Rating,” he adds, “and that means it is a landfillable waste. Our solids can be incinerated onboard a ship; since there is no active biological mass we can retain them outside the system longer than someone who is taking the solids out of the raw sewage inlet stream. So we don’t have the same issues as far as odor, biological matter, or going septic.” Maintaining the proper ballast can keep a ship stable in heavy seas. It is a necessary part of the function and balance of the ship. One of the most pressing environmental challenges facing the shipping industry today, however, is that marine life, in many different forms, is being carried around the world in ballast systems, disrupting local ecologies. The problem of contamination from non-indigenous species is producing major environmental changes in ecosystems around the world. As a result, international, national, state and local environmental agencies worldwide are taking action to regulate the discharge of ballast water arriving in ships coming from overseas ports. Severn Trent De Nora’s BALPURE ballast treatment system delivers tomorrow’s performance standards today, as Bill Burroughs, product line manager for BALPURE, explains. “The fear is that a ballast water system can actually transport the organism,” he says. “You essentially have the opportunity to set up a salt water aquarium in your ballast tank. In San Francisco harbor, for example, there are no indigenous species left. Non-indigenous species
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“The fear is that a ballast water system transport the organism. You essentially to set up a salt water aquarium in your
have out-competed all the others.” The BALPURE system safely and effectively eliminates all biological organisms from the ballast system on a ship, meeting all SOLAS regulations (Safety of Life at Sea). “In California, for example, they have a zero tolerance policy that means you can’t discharge any viable organism,” adds David Hill. “The BALPURE ballast water treatment system meets that requirement.” The future of regulations is difficult to predict exactly, but there can be little doubt that they will tighten, rather than relax. Severn Trent De Nora is ready to meet the needs of its customers, whatever they might be. “From a global perspective,” concludes Frank Martin, “we can react very quickly to any specification or demand that might arise.” www.sever ntrentservices.com/en_us/denora/ index.aspx
Severn Trent De Nora
m can actually y have the opportunity ballast tank�
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a
Rar E
xploration is part of human nature. For some it is the pursuit of wealth, while for others it is the quest for knowledge and enlightenment, and for a few it is the journey itself that brings excitement and fulfillment. While the unknown corners of the Earth become smaller every day, these dwindling wilderness areas are the new frontier of the modern era. One such area is Canada’s Northwest Territories (NWT), where the abundant natural resources and beauty are a magnet for explorers. In these inaccessible locations, transportation can be especially challenging due to weather, lack of roads, and distance.
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While adven cost e chief appro
Summit Air
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e mankind continues to search the corners of the earth for nture or resources, there will always be a need for safe, effective transportation. Dave Mathieson, president and pilot of Summit Air, tells Rob Harris about the innovative oach that has underpinned the company’s growth
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“For the faster, a
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Summit Air
Summit Air, a charter air service operating out of two locations in Canada, exists to take its clients to these remote places. The company’s main operation is headquartered in Yellowknife, NWT, and it has a second operational base in the city of Iqaluit on the southern coast of Baffin Island in Nunavut. The company started out with small float planes in British Columbia and then later moved to its current location in Yellowknife.
e client it’s really a no-brainer. They’re getting an aircraft that carries more, goes and costs a lot less on a price per pound basis. The aircraft really sells itself”
After moving, the company upgraded its aircraft to the Dornier 228 and the Shorts Skyvan. Chief pilot and president of Summit Air Dave Mathieson describes when he started with the company. “I was the ninth employee when I started in 2005. I could see the business potential was there, and they had two perfect aircraft types that filled a niche that’s unmatched.” The Dornier 228 cruises at 200 knots, which is 50 knots faster than any comparable aircraft in its class. With fuel burned at the rate of 600 lbs/hour, the increased speed of the Dornier reduces the client’s fuel bill by nearly 25 percent and clients get to their destination faster, safer, and in greater comfort. “Our low turnover rate reduces training costs and keeps experience levels high which then allows us to operate the aircraft at a lower cost per mile. So for the client it’s really a no-brainer,” Mathieson continues. “They’re getting an aircraft that carries more, goes faster, and costs a lot less on a price per pound basis. The aircraft really sells itself.” The other aircraft in Summit Air’s fleet is the Shorts Skyvan, which can carry nine passengers and up to 4500 pounds of cargo. The plane is equipped with a massive rear door that opens up wide enough to allow it to accommodate a mid-sized truck. Today the company has five Dornier 228s, with two more to be delivered this winter, and three Skyvans. It has also grown from nine employees to its current level of fifty. So what lies behind this remarkable growth? “The reason is our people,” says Mathieson. “We hand pick them, we treat
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Summit Air
at a time all over the North Pole and still make it back safely. By using the Dornier we can do this more cost effectively than any other aircraft. “We also do what is called ACMI leases, where we provide an aircraft anywhere the client needs it,” he continues. “It comes with a crew, engineer, and a full spares package and that’s a total mobile unit. So you could send an aircraft anywhere in the world. We’ve just started a survey contract in South America for a large research company; we’re surveying the jungles of South America. They are quite happy with this aircraft because of reliability, range and the length of time the aircraft can remain in the air without the need to re-fuel.” Another unique concept that Summit Air has brought to the charter air business is the way the company compensates its pilots. Traditionally in the charter air market, pilots are paid a base salary with the majority of their pay depending on how many miles they fly. The negative aspect of this model is that you can have pilots making critical decisions based on personal financial concerns. The difference in Summit Air’s policy is that it pays all of its pilots a salary.
“The key to our success is our people. I think a lot of businesses miss that; they see their payroll as an expense rather than an investment. To me that is the most valuable investment you can make in any company” them with respect, and we pay them above the industry standard, so we have a real positive team feeling at this company. It’s a real family feel.” The company services the entire northern part of Canada from coast to coast, as Mathieson explains. “Our larger clients are the Department of National Defence, and the mining industry. We go as far north as Alert and Eureka, which is the very top of Canada.” In the future, he says, “we plan to continue to grow the company, adding more experts to our team, more aircraft, new types of aircraft and continuing to open new bases across Canada.” Any successful business is always developing new goods and services, and Summit Air is no exception. Mathieson explains two new services that the company is offering. “We do Polar re-supply parachute drops now, for people that are hiking to the North Pole. We fly over and parachute gear in for them. This is something we started last year, and it has worked out to be amazing because with the aircraft’s range, we can service five different groups
This new system was ridiculed by the competition when it was first started, but the change has led to great results. Summit Air’s pilots make decisions based on safety first at all times, and give the company 100 percent effort all the time. Mathieson explains why this works. “The key to our success is our people. I think a lot of businesses miss that; they see their payroll as an expense rather than an investment. To me that is the most valuable investment you can make in any company.” The mystery of the unknown and the lure of riches has always compelled explorers to reach for the uncharted regions of the world. Mathieson describes what it’s like to operate in the NWT. “It’s one of the most extreme places you could be flying on the planet. You might as well be flying on the moon when you’re operating up here. You are unsupported, you’re thousands of miles away from anyone or any help, and you’ve got to depend on your training and your ability to keep the passengers and crew safe.” www.summitair.net
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Under the guidance of a new executive chairman with extensive mining experience, Tamerlane Ventures is raising the $120 million it will need to return the Pine Point mine to full production. Keith Regan learns how leveraging novel technologies and other operational improvements have altered the economics of the project
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or almost a quarter century, Pine Point Mine was the largest and most profitable zinc-lead mine in Canadian history. Between 1964 and 1987, the mine produced more than 64 million tons of ore that yielded 7 percent zinc and 3 percent lead. The mine served as an economic engine that created hundreds of jobs and an entire community in a remote part of the Northwest Territories. By the time metals markets swooned in the mid-1980s, the economics of the project began to change. Mining activity moved further away from the mill site, boosting trucking costs at a time when demand for the metals being produced was waning. The cost of maintaining Pine Point as a viable community was a factor in the project being shut down in 1987 by thenowner TeckCominco. “In the 1960s, when this mine first went into production, they didn’t have the fly-in, fly-out approaches that are used today,” says Margaret “Peggy” Kent, executive chairman of Tamerlane Ventures, which has owned Pine Point and adjacent lands since 2004. “When companies went into the wild west frontier to establish remote mining sites, they basically had to build a town and keep that town going to make it work.”
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Ridi
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Tamerlane Ventures
In the fall of 2010, Kent, who has helped found two publicly traded mining concerns and arranged for $1 billion in public and private equity financing for companies in the US and Canada over her career, began looking to line up backers for the revival of Pine Point. The mine had been shuttered by Cominco in the late 1980s, with at least 70 million tons of ore grade material still in the ground. Tamerlane bought that property as well as a piece of land across the Buffalo River, known as the Westmin claims, and over the course of four years, completed a feasibility study and has been awarded all the necessary permits to bring the legendary mine back online. By bringing technologies borrowed from other types of mining to bear on the project, and having access to workers and supplies from the area communities of Hay River and Fort Resolution, Tamerlane hopes to make the mine even more profitable, Kent notes. Tamerlane may also benefit from the fact that infrastructure in the area makes it unnecessary to build a large-scale mining encampment. “There is a hydro power line, a rail-head and a paved road leading straight to the mine site,
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but there are no houses that we have to support,” Kent says. Instead, workers will be drawn from and commute from Hay River, which is 40 kilometers away by roads that the provincial government keeps cleared and passable 365 days a year. “It’s a fairly thriving community,” Kent says, with an airport and scheduled flights to and from Yellowknife/Edmonton several times a day, as well as a Canadian National railhead and a regional hospital. The operation of the mine will also bring technology from the potash industry and help produce strong cash flow and enhanced profitability. For instance, because some of the underground deposits left behind in the original mining areas are in an aquifer, they are subjected to groundwater
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intrusion. Tamerlane plans to use a freezering technique to address this problem. The environmentally friendly freezing process uses brine as a refrigerant to freeze the ground adjacent to drill holes which are arranged in a circle around the deposit. This frozen ground prevents water from entering the mine. Elsewhere, Tamerlane plans to deploy vertical conveyor systems to help bring ore up to the surface, borrowing from technology used to build subways in New York City and salt mines in Louisiana. The company also plans to use dense media separation, or DMS, on the property, an approach brought into the zinc-lead industry about 15 years ago, after Pine Point was taken offline. In early November, Tamerlane announced it had obtained $10 million in financing, an amount meant to bridge the venture to a larger closing. “We just started the process of lining up the funding in the
Tamerlane Ventures
last month and a half and we already expect that by the end of the first quarter of 2011, we’ll have a plan in place,” says Kent. Assuming a closing later in the year, the mine could be up and running 18 to 24 months later, or in early 2013. That timing could be another competitive advantage for the mine project, Kent argues. “What’s interesting about 2013 and onward is during the time that Pine Point is being built and brought online about 20 percent of the world’s production will be depleted. There are many mines that are looking at reserves that are running out and some are quite large.” Mining companies are moving to address that production decline, but much planned new capacity will not be coming online until 2015 to 2020. “That leaves a window where we believe, and there are reports on the street that show, that zinc prices could approach the $2 level, and lead $1.30-$1.40. That sets our project up to be spinning off cash and enabling us to pay down our debt rapidly.”
Already, the timing is right to move the project forward. “We completed our feasibility study in 2008 right as the base metals markets began to fall apart at the seams,” she says—a blow then followed by the credit crisis. “We knew that was not the time to be seeking to finance the project. The market started to come back at the end of 2009 and is gaining momentum.” The project’s revival will mean a win not just for Tamerlane, but the entire region near Great Slave Lake as well. “The communities in the area are very excited with our project’s 220 high paying jobs being created,” Kent says. “It’s a situation where we could make a positive economic impact over the long term. We’ve got nine years of reserves ahead of us now and we are continually adding reserves and resources and we are looking to get up to 15 to 20 years of mine life. I came to Tamerlane for one reason, and that’s because I think it’s an extremely exciting project,” she concludes. www.tamerlaneventures.com
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Ontop
By financing the construction of the DeLong Mountain Transpor System in the icy Northwest, the Alaska Industrial Developmen Export Authority made the development of the world’s second-larges mine possible. Karsten Rodvik and Jim Hemsath talk to Gay Sutton how the project has boosted the region’s economic develop 50
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Alaska Industrial Development and Export Authority: DMTS Project
poftheworld
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nation’s transportation infrastructure can be thought of as its vascular system and backbone—not only transporting commodities and people in a timely way to the desired destination but also firmly supporting and holding together businesses and communities. But for the remote vastness of Northwest Alaska, where the majority of communities lie offroad and isolated for large parts of the year, the transport infrastructure is absolutely critical. Well above the Arctic Circle in the area known as the Northwest Arctic Borough, the construction of the DeLong Mountain Transportation System (DMTS) for the proposed Red Dog Mine some 20 years ago enabled the development of the world’s second-largest zinc mine. The mine, in turn, has significantly improved the economic prosperity of the local area, and indeed of Alaska as a whole.
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While the mine was jointly developed by Cominco (now Teck Alaska Inc.) and the NANA Regional Corporation, the native Inupiat people upon whose land it sits, the DMTS was financed and built by the Alaska Industrial Development and Export Authority (AIDEA). A statutory corporation of the State of Alaska, AIDEA’s mission is to promote, develop and advance economic growth and diversification in Alaska by providing various means of financing and investment. AIDEA’s vision is to actively partner with Alaskans as a dynamic resource in statewide economic development. The result has been the creation of many employment opportunities throughout the state. Since AIDEA is a public corporation rather than a traditional state agency dependent on state funding, AIDEA is able to operate more like the private sector rather than the public. “We are not funded by the state,” explains external affairs executive Karsten Rodvik. “Our revenues come from financing large projects like Red Dog, from our highly successful loan programs with Alaska businesses, and from our investments. These revenues not only cover our operational expenditure; we also pay an annual dividend of up to 50 percent of our revolving fund net income to the State of Alaska general fund.”
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Alaska Industrial Development and Export Authority: DMTS Project
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The costs of the construction of DMTS and its subsequent expansion have largely been raised through the sale of bonds, an overall investment totaling approximately $267 million. “This is essentially a long-term, patient capital investment program of 40 to 50 years,” explains deputy director Jim Hemsath. The investment is repaid through a toll on the road and port use. “Therefore, this time frame for payback can shift depending on the amount of ore that is moved. This was one of the risks associated with the construction of the DMTS. We were working on the assumption that further deposits would be developed at Red Dog and that ore would continue to be transported via the road to the port.” This decision to invest in the long-term future of the mine appears to be a good one. As exploitation of the original Red Dog pit nears completion, the development of the directly adjacent Aqqaluq deposit is ramping up, and the first load of ore has been shipped from the port. Over the past few years, AIDEA has been working closely with Teck through the various phases of feasibility study and permitting. “This year, for example, we have written a letter to the Environmental Protection Agency supporting Teck’s application for the expansion,” Hemsath says. And the expansion will have obvious benefits for AIDEA. “We believe the Aqqaluq deposit is likely to extend the life of the mine to 2031, and therefore revenues for the use of the road.” Today, the DMTS consists of a combination of a 52-mile-long, 30-foot-wide all-weather industrial haul road and a shallow-water dock and storage facilities located on the Chukchi Sea about 12 miles south of the small community of Kivalina. At these latitudes ship movements are only possible for three months of the year when the sea is ice-free. Equipped with an offshore conveyor concentrate loading facility, the port therefore operates for a short period of intense activity
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Alaska Industrial Development and Export Authority: DMTS Project
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between June and early September, when the entire annual output of the mine—some 1.2 million tonnes (metric tons) of ore—is shipped out. Traffic on the road continues throughout the year, though, as ore concentrate is transported from the mine to the port and stored in two of the world’s largest ore concentrate storage buildings. The port is also an essential import route for the mine’s supply of fuel for the year, and this is shipped in at the beginning and end of the shipping season and stored at the port’s fuel storage and distribution system. For the delivery of essential fresh food supplies and staff arriving and departing for their six-week shift pattern, however, the mine relies on a purpose-built airstrip capable of handling Boeing 737s throughout the year, weather permitting. The benefits of AIDEA’s investment in Red Dog have been enormous and amply fulfill the organization’s remit. “During financial year 2009, for example, more than 550 people were employed by Teck at the mine and port. Some 60 percent of those were NANA shareholders, and 20 percent were local Borough residents,” Rodvik says. “We’re talking about highly skilled, high-paying stable jobs, and they have given a tremendous economic boost to a very remote region of Alaska.” The wider Alaskan economy has also benefited to the tune of more than $274 million in annual dividends from AIDEA since the dividend program’s inception, while a percentage of the dividends received by the NANA Corporation are also shared with other native Alaskan corporations, spreading the wealth. Further expansion of the DMTS looks likely over the next two to five years. Teck is in the process of studying the feasibility of installing a water line parallel to the road for the disposal of treated water, while AIDEA is currently working closely with Zazu Metals Corporation, a mining company in the early stages of developing the Lik zinc deposit some 40 miles northwest of Red Dog. “If the development goes ahead,” Hemsath says, “we’ll construct another 50 miles of road to connect the new mine to the existing haul road. We will also need to construct a third ore concentrate storage facility and install extra materials-handling equipment.” Looking to the future, AIDEA continues to look for suitable public-private partnerships with industry to develop the natural resources in Alaska. “We’re also looking for opportunities for production and manufacturing,” Hemsath says. “Alaska has a lot to offer, our location being a major one; we’re on the Arctic shipping route. As the ice patterns change, some of the heaviest shipping traffic is likely to come right by Alaska. We believe that as our world changes and the global market changes, Alaska can become a larger participant.” And undoubtedly AIDEA will play a significant role in financing and developing that change. www.aidea.org
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“The time fram This was one of on the assumptio
Alaska Industrial Development and Export Authority: DMTS Project
me for payback can shift depending on the amount of ore that is moved. the risks associated with the construction of the DMTS. We were working on that further deposits would be developed at Red Dog and that ore would continue to be transported via the road to the port�
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Onthe
acquisitio trail
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ion
Deep Down Inc.
Texas-based Deep Down Inc has been playing a key role in consolidating service provision for the worldwide offshore oil and gas industry. Ben Sansom reports
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ccording to the latest reports from Quest Offshore Resources (a leading provider of market intelligence for subsea, deepwater and marine construction sectors within the oil and gas industry), capital expenditure for subsea development worldwide is likely to undergo considerable growth between 2009 and 2014 and will ultimately reach an all time high of $81.1 billion. One company systematically expanding its product and service offering to meet the needs of this sector growth is Houston-based Deep Down Inc. Since its launch in 1997 the company has established its position as a trusted services and technological solutions provider for the offshore oil and gas exploration and production industry. Providing specialised management and engineering teams for deepwater subsea developments, and a wide range of specifically designed and manufactured products, the company operates around the globe for a portfolio of clients that include major oil companies such as Royal Dutch Schell, Exxon/Mobil, Chevron, BP, Anadarko, Marathon Oil, BHP, Amerada Hess, Helix, Subsea 7, Acergy, Aker Kvaerner and Cameron. With a considerable presence in the Gulf
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Deep Down Inc.
PT Welding and Fabrication PTWF has fabricated a wide variety of work from 20’ seismic boat cable reels with level winding assemblies, turnkey mud systems for land based drilling, to ROV underwater stations for offshore. We are very proud of our work with Boeing for the space station on two nitrogen bottle transport systems fabricated out of aluminum. We are capable of many forms of fabrication from small one-off parts, sheet metal work, high pressure piping, ASME Code vessels, light to heavy structural steel fabrication. We also do large and small machining for our customers. We have always kept our customers interests in mind on all of our jobs to produce the best manufactured products possible.
of Mexico, the company has been expanding its global horizons, with a particular emphasis on the lucrative deepwater projects off the coasts of Brazil and Ghana. The past two and a half years has been a period of intense expansion for Deep Down. Intent on leveraging the record growth which is forecast for the next five years, the company has engaged in an aggressive acquisition strategy aimed at bringing under one roof a comprehensive portfolio of industry service providers, including designers and manufacturers of subsea, surface and offshore rig equipment in deepwater exploration and production of oil and gas worldwide. Today, the company operates through four business units: Deep Down Inc, Flotation Technologies, Deep Down Marine Technologies, and Mako Technologies. Among its early acquisitions was ElectroWave USA, a company that brought with it the ability to manufacture advanced automation for the marine industry. The acquisition of Mako Technologies, which operates today as a subsidiary, gave the company the capacity to manufacture remotely operated vehicles (ROVs) along with ROV tooling and crews, and offshore equipment rentals. Meanwhile, the addition of Flotation Technologies, another separate business unit within the Deep Down portfolio, adds the capacity to develop and manufacture specialised
offshore flotation technology such as drill riser buoyancy and other marine flotation solutions. The acquisition strategy has continued through 2010, with the announcement on 3 May that the company had entered into a conditional purchase agreement to acquire the Cuming Corporation for $48.25 million. A world leader in the design and manufacture of technologically advanced syntactic foam flotation products and insulation materials for the offshore oil and gas industry, Cuming has been enjoying record sales and an order backlog, and has recently quadrupled its production capacity in order to meet the huge demand for its products. The acquisition is expected to benefit both companies. Beyond expanding through acquisition, Deep Down also believes that innovation is key to success in such a highly technological and physically challenging operating environment. To maintain its position at the forefront of the market, the company is continuously improving and updating its service offering and its product portfolio, which includes custom engineered subsea distribution system hardware and drill raiser buoyancy solutions, offshore innovations such as loose-tube steel flying-leads, Morays, installation carousels, pipeline terminations, launch and retrieval systems (LARS), marine automation, monitoring and control systems. And where a development has proven to be an effective addition to the product portfolio and a recognised technological advancement, the product is protected with a patent. One such recent development is a new subsea umbilical-splicing technology which enables users to create flexible environmentally sealed joints or splices between two or more existing umbilicals, thereby quickly and efficiently achieving new configurations and reducing turnaround time on subsea operations. The product was successfully patented in the US in May this year. Another recent innovation is a drilling riser buoyancy module developed by the Flotation Technologies division and patented in December 2009, which incorporates a ToughSkin outer shell moulded from high strength polymer enabling it to withstand the rough handling that such modules usually receive both in storage and in service. Investment is also being made to increase
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“There will undoubtedly be greate
manufacturing capacity in Flotation Technologies fac originally engineered to m 40,000 sq ft, and employin Technologies. “We believe applications beyond flotati The predicted increase and the company’s revenu disastrous oil spill in the G and Smith is expecting tha greater regulatory scrutiny of Mexico,” he said. Looking to the future, t Deep Down to play a sig going forward as we co remains one of the best to supply services and www.deepdowncorp.com
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er regulatory scrutiny and higher costs associated with finding and developing hydrocarbon reserves in deep water, particularly in the Gulf of Mexico”
preparation for future growth. In September this year, a new 20,000 sq ft rotational moulding facility was opened at the cility at Biddeford, Maine. This state of the art facility houses a custom designed rotational moulding machine that was manufacture the patented CoreTec drilling riser buoyancy module external shell. With expansion capabilities to nearly ng more than 25 workers at full capacity, the new facility is also being put to use on a range of products for Flotation e the rotational moulding technology will play a key role in our ultra deepwater strategy as we apply this technology to ion buoyancy,” commented Ronald E Smith, CEO of Deep Down. in activity in the market place is already showing positive results for Deep Down, in spite of the global recession, ues for the second quarter of 2010 were 55 percent up on the revenues for the same quarter last year. Moreover, the Gulf of Mexico has resulted in increased spending on cleanup operations, subsea monitoring, inspection and safety, at the subsequent improvements in operational standards will continue to drive spending. “There will undoubtedly be y and higher costs associated with finding and developing hydrocarbon reserves in deep water, particularly in the Gulf
there are plenty of opportunities on the horizon, and the rapid expansion of the past three years has positioned gnificant role in the sector. “We believe that the international markets will be more important to our operations ontinue our focus on Brazil and West Africa deepwater projects,” Smith commented. “The deepwater market frontiers for adding large hydrocarbon reserves with high production flow rates. And we are well positioned products required to support safe offshore and deepwater projects of our customers,” he concluded.
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st
Visionary
Selwyn Resources, undeveloped zinc-lead depos
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Selwyn Resources
teps
a Canadian junior exploration company developing the world’s largest sit, is looking to China for the financial support it requires. Gay Sutton talks to Dr. Harlan Meade about stepping beyond normal conventions
T
here are essentially two types of exploration company in the mining sector. There are those that thrive on making new discoveries and then selling them for development by somebody else, and then there are those that plan to build their company into a multiple-asset midtier mining company, searching for new discoveries and following through to develop them. This second type is very rare. The transition is difficult, and for most the thrill is in the exploration. Selwyn Resources is one of this second, very rare breed. The company has achieved what many only dream of. It has discovered what could become the world’s largest zinc-lead mine, in eastern Yukon, Canada. And it looks as though the timing is exactly right. Over the past 20 years most Western mining companies have been exiting from zinc mining. But with the recent explosion of construction in developing countries, zinc—essential to galvanized steel manufacture—is becoming more highly sought after, and the lack of supply is causing some concern. “At the time I acquired the asset, the thinking was that there were three fairly large zones of mineralization in the Howard’s Pass district. The original owner, Placer Dome, had published figures indicating 300 to 400 million metric tons at around 7 percent combined zinc and lead,” explains
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Selwyn’s CEO, Harlan Meade. “However, my view as a geologist was that these deposits always have a high-grade core, so where was it and how big was it? My view and that of others was that there could be as much as 2 billion metric tons of mineralization in this deposit, which would dwarf anything we know today.” Meade acquired the asset in 2005 from Placer Dome and a subsidiary of US Steel. “We then staked the entire mineral belt, all 68 kilometers of it, to get 100 percent ownership, and we began drilling. Within two years we demonstrated that this was one single deposit 38 kilometers long, and there’s nothing else like that in the world. Today we believe it has a high-grade core that may have a strike length of up to 20 kilometers, but it’s been cut by faults and the pieces shuffled, a little like a pane of glass that’s been shattered and moved around.” Now called the Selwyn Project, it’s a giant undertaking and will probably stretch into a number of phases. Feasibility studies based on just 10 percent of the resources predict 10 to 15 years of mining. The last few years have been occupied establishing the reserves and evaluating and modeling them to understand how best to approach the first phase of development on what will be a complex project. So far, $100 million has been spent, 90 percent of it on drilling and infrastructure, the remaining 10 percent on environmental and engineering work. But to take the mine to the next phase significant investment was required. To obtain it, Selwyn took something of a visionary step. About five years ago Selwyn began approaching the Chinese. “Everyone laughed at us. Most Chinese transactions are outright purchases, and we had no interest in doing that. This was the largest undeveloped zinc-lead deposit in the world today, strategically very important to Canada and very lucrative for our shareholders. Our aim was to retain an equal share in the asset,” Meade says. “We met with dozens of major Chinese mining companies and struggled. Although our exploration had been very successful, our share price was depressed.” They came up with a formula whereby, as Selwyn had already invested $100 million, a Chinese partner would be asked to match that investment in return for a 50 percent share in the
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“We staked the entire mineral belt, all 68 kilometers of it, to get 100 percent that this was one single deposit 38 kilometers long, and there’s nothing else l
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project. The assets would then be transferred to a new joint venture company, creating the basis for securing future loans from the Chinese banks. “We believe that access to the debt and equity market in China, which is developing very rapidly, is going to be very important going forward,” says Meade. “And we are way ahead of most other junior mining companies in Canada in doing this.” It turns out that this was a wise move. Debt financing from North American and European sources has become almost impossible to acquire in the current tough economic climate. Meade also explains that Western markets usually demand a 55:45 percent debt-to-equity ratio, most of production to be hedged for seven to eight years, and the production of much time-consuming documentation and consultation. By contrast, Chinese banks are likely to accept a 70:30 percent debt-to-equity ratio, little or no hedging of production at all, and much simpler documentation. Selwyn eventually received three offers from Asian firms and in December 2009 chose Yunnan Chihong Zinc and Germanium Co., Ltd., a Chinese mining company with considerable mining experience. Chinese regulatory approvals were received in July and the JV transaction was completed in August with the creation of Selwyn Chihong. A bankable feasibility study is due for completion by early 2011. Meanwhile, drilling will continue, to upgrade resources to reserves. Looking forward, the company is hoping to begin construction of the mine in early 2012, with a completion date some 18 months later, and it will then transition to full production by the first quarter of 2014. “My prediction is that we will have a wonderful zinc market by that time. There are virtually no other good projects in the development pipeline, and many of our large mines will have been depleted by the time this one starts up.” There are a number of challenges ahead, though, and Selwyn is predictably going for unconventional and ambitious solutions. The mine
is located a considerable distance from rail and ocean transport. “Truck transport is expensive, and nobody knows what diesel will cost 10 years from now, so transport costs are becoming more of an issue.” The company has reviewed all the options and has chosen to pioneer the construction of a concentrate pipeline to carry the zinc/lead slurry from the mine to the nearest major highway, where it will then be dried and transferred to trucks for transport to the port of Skagway in Alaska, and off to the markets in Asia. The seven-inch pipeline will be buried to a depth of 1.5 meters where it won’t freeze, and its operating costs are likely to be a fraction of those of road transport, helping to ensure the mine is viable in bad times as well as good. The location also makes access to power a challenge. Rather than install and rely on diesel generators, which are expensive to run and damaging to the environment, the company is proposing to construct a hydroelectric power plant as its base source of power. This plan includes the construction of a dam upstream to balance flow throughout the year, and the use of diesel generators to provide peak power only. “We believe every problem has a solution,” Meade concludes. “But you have to observe how things are changing and get in front of that change. If you do, you will find you’re not where the crowd is. And that’s tricky. We’ve stood back and looked at the rapidly evolving global community and figured out where we want to be. We believe there will be very significant changes in the amount of equity capital available for resource development coming out of China and its proxy, Hong Kong.” What Selwyn Resources has achieved is gaining early access to these important markets. Selwyn clearly recognizes that its management team requires flexibility and the support of its major investors if it is to develop this into the world’s largest zinc mine and transform itself into a midtier mining company.
t ownership, and we began drilling. Within two years we demonstrated like that in the world”
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Spar
oppo
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rkling
ortunities
Alexco Resource Corp. is a precious metals exploration company with a growing environmental services division. Its first active mining project, the Bellekeno Mine, is gearing up for commercial production
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or decades, the Keno Hill silver district in Canada’s Yukon Territory was a hot spot for precious metal, with mining companies taking some 217 million ounces of silver from the region between 1921 and 1988. Nearly 40 mines populated the territory, which stretches over an area of almost 100 square miles. As prices dropped and those resources became harder to reach, many of the mining companies operating in the region went bankrupt, leaving behind environmental liabilities as well as abundant unexploited resources. Vancouver, BC-based Alexco Resource Corp. saw the situation as a sparkling opportunity. Under a unique agreement with the Canadian government, Alexco secured the rights to conduct additional exploration, and eventually mining, at abandoned properties while also working to help clean the environmental contamination left behind two decades ago. What makes the arrangement feasible for Alexco is that it also operates Alexco Environmental Services, a consulting division that provides environmental services such as clean-up planning and management. The agreement calls for that division to conduct cleanup work over the next several years, addressing
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Gisborne As a general contractor, Gisborne has earned a reputation for self-performing most of the labour associated with its projects. Familiar with all aspects of project construction, Gisborne regularly participates in pre-construction, with constructability reports, preliminary budgets and scheduling. During
the
construction
phase,
Gisborne
constructs building and machinery foundations, erects structural steel, installs precision mechanical components, including large diameter SAG and ball mills. Every type of piping requirement, including design/build fire protection falls under its expertise. With careful attention to safety, quality, budget and timeline, Gisborne is quickly becoming the prime contractor of choice with our world class clients.
the environmental liabilities left behind when the region went quiet. Alexco will only inherit direct liability for the mines it reactivates. Alexco’s environmental wing also provides services beyond the Yukon, and that diversity has helped the company weather the recent economic turmoil and fare better than some competitors. An office was opened in Denver, Colorado in 2007 as Alexco Resource US Corp, where clients include not only the mining industry but industrial clients that turn to it for its patented technology used to treat in-situ metal contamination in water sources. Alexco went public in 2006 and raised an additional $50 million in 2008 through a contract with Silver Wheaton, under which the latter agreed to purchase 25 percent of the silver mined going forward. Its first mining venture in the region is the Bellekeno Mine, where mine and mill construction was completed in September this year. Ancillary facilities are complete, including the installation of a new bridge and haul road, and all permits and licenses are in place to enable commencement of commercial production. Construction of the 400 tonne per day conventional flotation concentrator and preproduction development of the underground mine was completed on schedule and within 3 percent of budget. Mill commissioning is now under way, with the concentrator running at design capacity and
producing silver/lead and zinc concentrates. The current focus of mill operations is to optimize lead/ silver/zinc recovery and to increase efficiency of the milling equipment. “It is notable that from the initiation of Bellekeno’s mine development and mill construction, production has been achieved in less than a year. This success is a testament to the skill and dedication of Alexco’s people and partners,” commented Clynton Nauman, president and chief executive officer of Alexco. The Bellekeno mine will operate initially at 250 tonnes per day supplying feed to a conventional flotation mill, producing up to 12,000 tonnes of lead-silver concentrate and 8,400 tonnes of zinc concentrate annually and generating up to 2.8 million ounces of silver per year. Initial silver grades in calendar 2010 and 2011 are expected to be approximately 1,000 grams per tonne. The mine and mill operations will employ approximately 120 people and are expected to directly invest more than $25 million annually for labor, materials and supplies in the Yukon. The Keno Hill district lies within the traditional lands of the First Nation of Na-Cho Nyak Dun, who support the work because it points to a clean-up while also producing employment and business development opportunities for their nation. At the same time, government can show progress on its obligation to effect long-term clean-up. A Comprehensive Cooperation and Benefits Agreement was signed between the two parties in June 2010, to build on the accord that was reached in 2008. At the Bellekeno Mine, as elsewhere in the district, Alexco believes resources have previously been overlooked in several areas. “They typically stopped mining in areas when they would hit water or where the rock geology made it difficult for them to mine and we have methods that will enable us to revisit those areas,” said chief financial officer David Whittle. “Today’s prices for precious metals also help make mining more economically feasible. Most importantly, Keno Hill is a very high grade mining district. With average historical production grades of 40 ounces of silver per ton, the district would rank in the top three percent by grade of today’s global silver producers.” Alexco has therefore undertaken this year a large exploration program in the Keno Hill District, with approximately 30,000 meters of diamond drilling comprising 25,000 meters of surface drilling
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throughout the district plus an additional 5,000 meters of underground drilling. The aim of the expanded exploration program is to define new and additional high grade minable resources at a number of sites within the district, including the historical Silver King mine, as well as the Lucky Queen mine where drilling in 2009 identified a new high grade zone of mineralization down-plunge of the historical Lucky Queen workings. Underground and surface exploration continues at Bellekeno, and is expected to extend into the first quarter of calendar 2011 with at least 2,000 meters of an expanded drilling program yet to be completed. Exploration drilling at the adjacent Onek zinc-silver deposit is substantially complete, and results are pending. New resource calculations for the Bellekeno and Onek deposits are scheduled to be completed in the second quarter of calendar 2011. http://www.alexcoresource.com
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Worth
wait
f
The history of the iron ore deposits at Mary River is a ta perseverance and hope, as Richard “Bo� McCloskey, chairma CEO and president of Baffinland Iron Mines, reveals to
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Baffinland Iron Mines
iting
for
ale of politics, an and interim o Andrew Pelis
T
he story of the Mary River iron ore deposits is a compelling tale of national pride, split opinions and fluctuating prices, with a splash of political intrigue. For these reasons, the high-grade iron ore reserves remain undeveloped, nearly a half century after they were first discovered by Murray Watts and Ron Sheardown. After much procrastination, that may finally be about to change as the site is now in the ownership of Baffinland Iron Mines. As Richard “Bo� McCloskey, chairman of the board and interim CEO and president, can testify, the desire to begin mining still has several more hurdles to clear, not least of which is the need to secure $4 billion of extra funding. Toronto-based Baffinland Iron Mines Corporation is focused on its 100 percent owned Mary River iron ore deposits located about 160 kilometers south of Pond Inlet, Baffin Island, Nunavut Territory, Canada.
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Baffinland Iron Mines
The high-grade iron ore deposits were discovered in 1962 and taken to lease by Baffinland Iron Mines Limited in 1971. Exploration and development work was re-started by Baffinland Iron Mines Corporation in 2004, which currently owns three mining leases covering approximately 1,600 hectares (about 4,000 acres) in the Mary River area of Baffin Island. Baffinland is a mineral exploration and development company with a sole focus on the advancement of its Mary River Property, which consists of five high-grade iron ore (hematite/magnetite) deposits. Perhaps it was fate that McCloskey would end up running the operation that will finally get to dig in Canada’s pristine north. His career path has been intrinsically linked to Mary River for more than 30 years through his work with a number of mining companies. Who better to explain the history of false dawns and the current optimism that Mary River might finally fulfill its promise? “Part of the problem is that the site is situated on North Baffin Island, well above the treeline, meaning that the terrain is spectacular but remote—we have rolling hills, lakes and seasonal rivers to contend with, and in summer there are 24 hours of daylight and in winter 24 hours of darkness,” McCloskey comments. “Deposit No. 1 is 500 meters above the land and can be seen for miles around,” he continues. “The main handicap to this project has always been shipping. If there is an ideal product coming out of the Arctic, this is it. It’s a quarry at the end of a rail line. This opportunity offers everything a miner could ever want: the highest grade of iron ore on earth and well over a billion tonnes [metric tons] of resources. But it also throws up ice as a challenge.” Back in the days when Mary River had first been discovered, the remote location became
a center of national sovereignty and a pawn in a fierce general election, as McCloskey well remembers. “Mary River became a political asterisk in the 1960s; after two feasibility studies were performed, a political storm ensued over the ‘pristine Canadian North being exploited’ by foreign powers—and given that those powers came from a South Africa-owned Anglo-American company, that did not go down very well. “After those problems came the discovery of iron ore deposits in Australia and Brazil,” he continues, “and the money that could have been spent here was instead used on projects where the logistics were much easier.” McCloskey says that since then a succession of fractured ownerships never gave the Mary River project the impetus to get off the ground. “Like many mining projects, every mine needs a champion for its cause, but there was split ownership; shortly after the discovery Murray Watts promoted the site, and all the base metal companies in Toronto gave money, but the result was a fractured ownership. “I became involved with a private company controlling leases in the mid-70s at a time when iron ore was not of much interest and prices were low. At the bottom of the market a few years ago, the purchase of a northern Australian mine brought Gordon McCreary and I together, and we started to talk about approaching Hudson Bay, which owned 47 percent of Mary River. “After a couple of discussions it became apparent that we could purchase their interest,” McCloskey continues, ”so in 2004 we underwent the conversion of a private company into a public one and the new Baffinland was born. Initially the investment of $5.5 million was raised through friends and business associates.”
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Subsequent feasibility studies indicate that there is over a billion tonnes of high-grade iron ore at the site, leaving Baffinland with the dilemma of transportation and logistics. “I’ve never seen a mining project where grade and tonnage are irrelevant, and to have both elements in place eliminated two of the key challenges,” McCloskey states. Moving the ore across the land to a port where it could be shipped has proven a big stumbling block, however. Given the conditions, heavy ships are needed to break the ice, and improved transportation networks are also an essential element. Baffinland completed a feasibility study in 2008 with robust economics but a price tag of $4 billion for the capital costs. As 2009 changed attitudes toward large development projects everywhere, Baffinland started to look at different alternatives. It recently completed a conceptual study on road haulage using a 100-kilometer road that transports the ore to temporary facilities where it can be loaded onto ships in the 70- to 90-day ice-free period. This would enable the organization to ship up to 3 million tonnes per year via truck to Milne Inlet. The viability of this project alternative is very much dependent on the price of iron ore per tonne. “This has not been looked at before simply because the prices did not make it feasible,” McCloskey explains. Having provided a small sample of the iron ore to Europe, McCloskey is extremely confident that demand will be sky-high when full production begins. “It will be like a sought-after and addictive product, in good times and bad, to the iron ore customers,” he exclaims, “but the infrastructure is not in place, and we have 60 to 70 people currently working on exploration.” Obtaining relevant permits is of course another prerequisite, and McCloskey suggests that this will also take years to accomplish. “We train Inuit people with local knowledge to work with us, and we’re currently negotiating an Inuit Impact and Benefit Agreement as well as conducting an environmental impact study. We expect to obtain the needed permits in about two years. Even though the trucking scenario looks attractive in initial studies, our main focus now is to raise the $4 billion we need to get Mary River into full-scale production. The downturn in the economy came at just the wrong time, as the results of our samples sent to Europe had been spectacular. “The feasibility studies revealed that a $4 billion investment would see a payback in less than four years,” he adds, “but a junior mining company simply cannot raise that kind of sum. We’re talking to major companies all the time, and there are serious discussions taking place.” Maybe finally the Mary River project can truly get under way—under Canadian ownership—and that long wait will have been worthwhile. www.baffinland.com
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Baffinland Iron Mines
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Timmins Gold brought its San Francisco Gold Mine in Mexico online ear the second quarter of production was on its way to producing 100,000 Greg Andrews explains how the mining concern hopes to expand on its mining-friendly Mexico
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es
rly in 2010 and by 0 ounces per year. s early success in
Timmins Gold
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immins Gold Corp. may be based in Vancouver, British Columbia, Canada, but its heart and its future focus clearly lie well to the south. It’s in Mexico that Timmins owns or controls several promising gold properties, including its current flagship, the San Francisco Mine in the state of Sonora. The San Francisco Mine is a past-producing open-pit mine that Timmins brought back into full-scale commercial production early in 2010. When fully ramped up, the mine is expected to produce between 80,000 and 100,000 ounces of gold annually. Timmins has staked its claim in Mexico for a number of reasons, including the presence of a government that recognizes the importance of mining to the country’s long-term financial stability, an existing workforce with mining experience, a favorable tax climate and reasonable environmental regulations. Those factors together have helped Mexico earn a rating as a top mining jurisdiction from the Fraser Institute, a leading Canadian think tank.
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Timmins Gold
In the San Francisco mine, meanwhile, Timmins has 100 percent ownership in a mine that produced more than 300,000 ounces of gold between 1996 and 2001. Timmins controls a 45,000-hectare land package which it purchased in 2007, giving the property additional potential for exploration and growth. The company has already done preliminary drilling along known deposits in a bid to grow the reserve and extend the life of the mine beyond the current expected five-plus years, and possibly well into the future. Currently, Timmins has established a known reserve of 780,000 ounces, resources that are locked up in some 34 million tons of ore. The mine’s location is seen as a strategic and competitive advantage as well. It sits amid welldeveloped infrastructure, some of it built as recently as the late 1990s, with sufficient water rights and concessions and access to power from a modern regional grid. The labor force, too, has long been exposed to a range of mining techniques. Timmins has also built strong community relations on the foundations established by past mining concerns. Because of those factors, the mine took relatively little up-front capital to restart, with Timmins spending around $40 million, including the land purchase. Timmins is also utilizing a mining contractor, Peal of Spain, that has experience and knowledge in the area and is itself well capitalized. That contractor in turn is drawing local employees from a pool that includes many people with experience in the mine during its earlier operational run. Much of the rest of the capital expense was directed at building a new secondary and tertiary crushing system that was intentionally built with expansion capabilities. The resulting heap pile will be made up exclusively of rock under ½-inch in size, allowing recovery rates of up to 70 percent. Timmins also invested in refurbishing a former ADR gold plant on the property that can now handle production rates of up to 120,000 ounces per year. Timmins saw the first gold poured from the San Francisco mine in December of 2009 and began commercial operations in April of 2010. During the first quarter, more than 11,000 ounces of gold were produced, a number that jumped to 15,000 ounces during the second quarter. Timmins has targeted cash costs of $420 per ounce at San Francisco, a cost profile that gives it a strong profit margin potential in the current bull market
for gold and other precious metals. Starting commercial production at San Francisco, and the resulting cash flow, mean Timmins Gold can begin to explore its portfolio of other Mexican gold and silver properties and prospects. Among those holdings are claims in Zacatecas, Mexico, where it controls 45,000 hectares of property that is contiguous to Goldcorp’s Penasquito deposit, which has an estimated 17 million ounces of gold in reserves, and just 20 kilometers from Goldcorp’s Camino Rojo project, where that company believes it will be able to mine 3.4 million ounces of gold and more than 60 million ounces of silver. Elsewhere, Timmins controls the Cocula Property in Jalisco, Mexico, where early exploration drilling has identified a potential bulk tonnage target with a potential low strip ratio. Timmins plans to add to its land holdings in that area and perform additional exploration work as resources permit. Another key land package is Timmins Gold’s additional Sonora, Mexico properties, which are known as the Norma, Patricia and Picacho holdings. The Norma and Patricia claims include 20,000 hectares to the west of the San Francisco claim block and were made to help secure mineralized occurrences in old mines. Those properties are along the trend line that forms the mineralization within the San Francisco block and are expected to be the target of drilling exploration in late 2010 or early 2011. The Picacho holding, meanwhile, has shown high grade surface mineralization and exploration targets will include both metamorphic and sedimentary rock.
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“The mine sits amid well-devel sufficient water
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Timmins Gold
loped infrastructure, some of it built as recently as the late 1990s, with r rights and concessions and access to power from a modern regional grid�
The Timmins management team includes CEO Bruce Bragagnolo, an attorney with extensive regulatory and permitting experience, and president Arturo Bonillas, an engineer with more than 23 years’ experience working on mining projects in Mexico. The successful launch of the San Francisco mine in 2010 is part of a long-range plan to build Timmins into a 5-millionounce per year gold company, rivaling some of the strongest players in the market today. www.timminsgold.com
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Crescent
Odebrecht USA is playing a major role in the construction hurricane-proof flood defences for New Orleans. Ben Sansom take closer look at the Kenner Floodwall proj 88
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Odebrecht USA
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n August 29, 2005, disaster struck New Orleans with an event that is likely to remain a scar on public memory for generations to come. The severity of Hurricane Katrina brought levels of destruction and human suffering not usually associated with the developed world, and these were splashed across newspapers and TV screens around the globe.
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“In a joint venture with Florida-based Johnson Brothers, Od section of a new flood wall in Kenner, which will run alongside
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Odebrecht USA
The storm surge peaked at a massive 28ft, while the waves that overtopped many of the levees and flood walls reached 55ft—both figures being the highest ever recorded in North America. Under this assault, a large portion of the city’s 350 miles of levees and flood walls were simply overwhelmed. Once the immediate rescue effort had been completed, however, the response has been characteristically vigorous. An unprecedented effort has been made to clear up, rebuild and protect this historic city, which is treasured worldwide as the birthplace of jazz and is home to over one and a quarter million people in the metropolitan area alone. By June 2006, 220 miles of levees and walls had been temporarily repaired as a prelude to the construction of more permanent higher levels of protection. Although there is theoretically only a 1 percent chance of such a storm happening in any one year, work is now well advanced on the Army Corps of Engineers’ Hurricane Storm Damage Risk Reduction System (HSDRRS), a program that has been carefully calculated to protect the city from another devastating storm surge.
debrecht USA won the contract for the construction of the northern e the West Return Canal between Lake Pontchartrain and Interstate 10” Coming in at a cost of $15 billion, the work includes strengthening the levees and replacing the old concrete and steel floodwalls of I-wall design with stronger T-wall structures, constructing floodgates at vehicle and railroad access points which can be raised when flooding is expected, and building new and improved pumping stations to pump out rain and flood water. This gargantuan task has been broken down into 250 individual projects and the plan is that the work should be completed by 2011. The US division of Brazil-based global engineering and construction company, Odebrecht USA, has been a significant contributor to this massive engineering challenge. The company first set up its office in New Orleans in 2005, specifically to handle levee reconstruction work for the Army Corps of Engineers, and to establish
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its reputation within the local marketplace. Since that date, the company has undertaken numerous contracts within the HSDRRS programme. This year alone Odebrecht has completed work on the reconstruction and fortification of containment dikes at Cataouatche Lake and in the region of Chalmette. Meanwhile, it has begun work on the construction of extra surge protection for four East Jefferson water pumping stations, and has also signed an agreement to undertake preventive construction work for flood protection. Then finally in July this year the company won one of the last remaining major contracts for construction work in the East Jefferson area, which it will be undertaking in a joint venture with Florida-based Johnson Brothers. Valued at $82.6 million, the contract is for the construction of the northern section of a new flood wall in Kenner, which will run alongside the West Return Canal between Lake Pontchartrain and Interstate 10. A primary line of defence against hurricane driven storm surges that threaten East Jefferson from the west, the canal stretches from Lake Pontchartrain to the Louis Armstrong New Orleans International Airport. The new wall will be laid down just 35ft from the existing wall which protects East Jefferson from the LaBranche Wetlands, and will run parallel to it for most of its 2.2 mile length. Once the work has been completed the old wall is due to be demolished. The T-wall design of the new floodwall will be a significant improvement on the old one. Not only will it be a few feet taller than its predecessor, it will also be much stronger and more stable, largely due to design improvements underground where the foundation supports will in some places be four or five times deeper than the original ones. With some 44,600 cubic yards of concrete and 1.2 million linear feet of sheet piles required for the building work, transportation is being managed to keep the impact to the local community to a minimum. Where increased traffic is expected for truck deliveries, the company is remaining in close contact with the local communities. Meanwhile wherever possible, supplies are being brought to the site by canal barge. Work is being permitted 24 hours a day, but the company has given the assurance that no pile driving will take place between 10pm and 7am, to reduce disturbance to the
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Odebrecht USA
community. Meanwhile, vibration levels are being monitored throughout by the Corps, and Odebrecht is committed to maintaining them within predetermined levels based on industry standards for residential construction. 2010 has been a significant year for Odebrecht USA, which has been celebrating 20 years of operations in the United States. During that period, the company has completed some 55 major projects, working in the states of California, North Carolina, South Carolina, Florida and Louisiana. Among the early projects was a $168 million contract for the construction of the Seven Oaks Dam in California, which began in 1993 and lasted for some 52 months. One of the company’s main clients has been Miami-Dade County, Florida, for whom it has completed both aviation and mass transportation construction work. The company is currently
responsible for the $2.85 billion expansion of Miami International Airport’s north terminal which includes 52 new gates, four train stations, new installations for the US Immigration and Citizenship Services, 123 counters, 119 self-service kiosks, 72 federal inspection service posts and a new luggage system. Odebrecht is also heading the construction of the $256 million MIA Mover, an automatic vehicle that runs on tracks connecting the airport to the Miami Intermodal Centre as well as the $360 Airport Link, a 4 km subway connecting the airport to the Earlington Heights subway station, a job that includes three sub-stations, a bus stop and highway access points. Having firmly established its credentials and built up a strong reputation for quality through the work it has completed over the past 20 years, the future looks bright for Odebrecht in the USA, and for the city of New Orleans, too. www.odebrecht.com
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Brushing
Carbon products are the secret driving force behind so many of our everyday appliances. Andrew Pelis investigates the role Schunk Graphite Technologies has played in developing the products we all take for granted
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hen you start up your car or travel by train, you probably don’t think about the contribution carbon has played in making this possible—but carbon brushes are the hidden force behind motors that power hundreds of everyday appliances, like power tools, washing machines, blenders and hair dryers. Industry has long recognized the multitude of possibilities represented by carbon and its use in today’s manufacturing world is diverse. From industrially manufactured bearings and seals, to brushes and high temperature applications, carbon’s uses have helped to shape today’s industrial landscape.
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Schunk Graphite Technology
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At the forefront of carbon technology for almost one hundred years now, Schunk Graphite Technology (SGT) has developed into one of the world’s leading providers of carbon technology that stretches across the whole gamut of industry. Schunk can engineer and manufacture a complete range of carbon and graphite, fiber composite and silicon carbide ceramic materials for various commercial applications and is also renowned for its ability to solve complicated customer problems. The example of railway technology underlines Schunk’s impact; the company has been developing and manufacturing top quality products for railway technology for over ninety years. Its range of carbon brushes, brush holders, brush rockers, earthing contacts, as well as collector strips, pantographs and third rail systems are today used around the world by operators of high speed trains, people mover systems and those operating electrical trams and traction vehicles. Such know-how has built the Schunk brand and reputation, something that still required ‘brushing up’ across North America in the 1970s. Then in 1978, Schunk Graphite Technology took the strategic decision to open a manufacturing center and distribute Schunk’s world-class products to the vast North American market. The company’s origins were already firmly set before it entered the US market and actually predate the First World War. It was in 1913, in Fulda, Germany, that Ludwig Schunk and technician Karl Ebe, founded the carbon brush factory Schunk & Ebe OHG. Following Ebe’s death in 1918, the company relocated to Heuchelheim near Giessen, Germany, and Schunk began to broaden the production program to include holders for carbon brushes, carbon products for mechanical uses, and sintered metal components. As Schunk’s technologies expanded, so did demand for its products and the Schunk Group is today active in the core markets of carbon technology and ceramics, environmental simulation technology and climate technology, sintered metal technology and ultrasonic welding technology. With a group culture based around the principles of the Ludwig Schunk Foundation (created in 1947 after its founder had passed away), sustainability is a core focus and there is a strong commitment to maintain the business independence by
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Schunk Graphite Technology
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concentrating on profitable growth which has derived from customer trust. Worldwide, the Schunk Group now employs over 8,000 people and has a reach in 26 countries. By the late 1970s Schunk & Ebe GmbH had subsidiaries in most European countries and also in Brazil and Mexico. At the time the Mexican operation was responsible for serving the entire North American market. When the management at that time decided to make an impact in the United States, they purchased a Babbitt bearing company in Milwaukee, that had no relationship or relevance to any of the then Schunk businesses and also bought a plastic molding company in Yonkers, New York, which it called Schunk & Ebe Carbon, but later renamed Schunk Graphite Technology. By early 1979 S+E Carbon was relocated to Milwaukee and occupied space in the Babbit bearing company, immediately making Wisconsin the focal point for SGT’s North American activities. In 1986 the company sold its bearing assets to the Braunschweiger Huettenwerke in Braunschweig and the company was then able to concentrate on its carbon business. The holding company, managed by Schunk in Heuchelheim, made subsequent acquisitions and today the business operates with two sister companies: Xycarb Ceramics in Texas (who manufacture semiconductor engineering products) and Schunk Electrocarbon, based in Toluca, Mexico and responsible for the production of machined, mechanical carbon products. Its venture into North America has proved highly successful and SGT offers its North American clients a complete line of carbon and graphite materials, carbon fiber composites, technical ceramics and specialized processing. The company’s state-of-the-art manufacturing center in Menomonee Falls, Wisconsin, covers 75,000 square feet and has approximately 130 employees. SGT operates to ISO 9002 standards and it primary manufacturing focus has been on carbon, graphite, ceramic and complementary products tailored to meet the demands in the electrical, mechanical and thermal application markets.
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Schunk Graphite Technology
“The North American operation is Schunk’s Center of Competence for resin-bonded mechanical carbon products” The North American operation is Schunk’s Center of Competence for resin-bonded mechanical carbon products. Resin-bonded carbons are ideal for complex pressed-to-size products and for high volume, low duty applications such as seal rings for axial face seals and bearings for pumps and industrial equipment that serve the plants and machinery within the chemical and petrochemical industry, as well as in automotive, HVAC and power plant engineering, pharmaceutical and the food industry. SGT’s technologies can be seen in use in industrial motors, traction motors, tachometers, slip rings, large and small household appliances, power tools and gardening equipment, office equipment, automobile electric motors and even children’s toys.
In addition to its ISO accreditation, the company is TS-16949 compliant. The Menomonee Falls site is set-up for mass-production but equally SGT has made its name by offering technical solutions to customer problems. Its laboratories include technologies designed to measure sound and oscillation levels, in addition to radio interference suppression. Durability testing ensures that each product meets stringent quality and reliability requirements. SGT has made its name in industry by providing the components that power the equipment we take for granted in our everyday lives; it is a legacy that Ludwig Schunk would be proud of. www.schunkgraphite.com
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Hansgrohe Inc
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o associate the Black Forest in southwestern Germany only with cuckoo clocks and cake would be crudely stereotypical, but it is hardly a place one would immediately associate with style and elegance either. Frankly, most people’s washroom facilities are not temples of design perfection: the bathroom is typically the most utilitarian room in the house. What links these two thoughts? In a word, Hansgrohe. In 1901 the German engineer and entrepreneur Hans Grohe started a business that is still headquartered at Schiltach in the Black Forest, and a dynasty that is still very much involved in running the Hansgrohe Group, which today employs more than 3,100 people in its subsidiaries in 37 countries, on all continents. However, though it still owns 32 percent of the equity, control of the group passed in 2002 to the $1.5 billion Masco Group, based in Michigan.
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Hansgrohe Inc
Proseals USA, Inc. We are proud to serve Hansgrohe’s rubber molded and O-ring needs. Proseals provides one rubber compound that meets all of the following global standards: NSF, KTW, WRAS and DVGW, thus eliminating the need for a different compound for each application. In addition to our engineered rubber solutions, we also specialize in inventory management systems to reduce our customers’ inventories and provide “just in time” delivery.
That’s a lot of growth from a business that focuses on a small niche, designing faucets, washbasin and bath systems. Hansgrohe is the premium brand for bathroom and kitchen fixtures, and a market leader in showers and shower
systems, as well as thermostat, pressure balance and ceramic cartridge technology. A winner of numerous awards throughout the world, Hansgrohe is regarded as one of the leading innovators in technology and design, with inventions such as the adjustable wall bar, multiple-spray hand showers and showerheads, the QuickClean function, AIR and water-saving EcoRight technology. These and other original products have helped reinvent the modern bathroom as a more functional, more comfortable and more beautiful living space. The company currently operates 10 manufacturing facilities, including six in Germany, as well as single plants in France, the Netherlands and China. In
addition, the company manufactures and assembles most of its Hansgrohe branded products for North America at its modern manufacturing facility in Alpharetta, Georgia, in the United States. The US operation Hansgrohe Inc. currently accounts for
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“We have a very active kaizen team, as we believe that operational excellence and continuous improvement go hand in hand�
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about a tenth of the global business, both in terms of revenue, at around $80 million a year and people, with 250 employees. The Hansgrohe brands are not by any stretch of the imagination competing with the kind of product you’d buy at a hardware store or find in any but the most exclusive hotels. Axor, the designer brand of Hansgrohe, is regarded as the epitome of quality and design for the luxury bathroom. With a vast number of independent, comprehensive collections, which Axor develops in cooperation with internationally renowned architects and designers such as Philippe Starck, Antonio Citterio, Jean-Marie Massaud, and Patricia Urquiola, the designer brand provides unlimited freedom and so allows the creation of highly individual bathroom solutions and personalized interior designs. Axor collections can be found in the Burj Dubai, the Yoo Apartments in Manhattan, and in the Bulgari Hotels of Milan and Bali. Axor collections are also featured on the Queen Mary II, in the Lufthansa First Class Lounge in Frankfurt, and in the Else Club in Moscow. The Axor brand manager is Philippe Grohe, grandson of the company’s founder. Not surprisingly, the North American market is key to Hansgrohe, though culturally it retains a European (or perhaps one should say international) ethos. The downturn of 2008 and 2009 was particularly pronounced in markets such as Spain, Great Britain and the United States, where the recession coincided with a severe crisis in the property market and the building industry. Fortunately, Hansgrohe is a niche player and not quite so exposed to the vagaries of the market. The Axor brand in particular has been wooing the A&D (architects and designers) community with the launch of the Axor Design Studio Program (ADS), targeted towards a limited network of high end decorative showrooms, which have the expertise to sell designer products to a clientele of architects, designers and consumers. Axor also plans to extend its partnership with industry associations (including ASID and AIA). As Nicolas Grohe, director of marketing and product development for North America explains: “We developed the Axor Design Studio program as a way to further emphasize our commitment to our clients and as another service for the specifier community. We have partnered with
world-renowned designers to help realize our design vision and have, as a result, developed outstanding designer collections. It is only natural to have a merchandizing program reflecting the same level of excellence.” Though the United States manufacturing facilities have not seen investment on the scale put into the German plants (in 2009 the bulk of capital spending, €19 million, went into the six plants in Germany, as these facilities produce about 80 percent of total output as measured in terms of sales) there have been some changes at the Georgia plant. According to vice president of operations Stefan Hammann, the focus has been on efficiency, manufacturing excellence and continuous improvement. Hammann came into Hansgrohe nine years ago as a quality manager before moving into manufacturing and thence into operations; he is a six sigma black belt and has led a number of projects. “We also have a very active kaizen team, as we believe that operational excellence and continuous improvement go hand in hand.” As part of the group strategy to improve its global carbon footprint while saving cost at the same time, Hansgrohe Inc. has achieved a cut of 75 percent in the waste it sends to landfill this year, and in the same period has reduced its consumption of electricity by a quarter. Attention has been paid to procurement as well, says Hammann: “We have been looking at how we can increase the proportion of locally purchased goods; it is a way of cutting our lead times as well as improving our flexibility and cost.” And some strategic investments have been made. Automation yields fairly rapid payback during a downturn, and the allocation of around $300,000 in robotic equipment accordingly went ahead in 2010. Such is the company’s confidence in the quality of its manufactured products, thanks to the work of managers like Hammann, that in September it announced a blanket voluntary guarantee of five years on all its products, far exceeding the legally required two-year guarantee, which applies to hand showers, wash basin mixers or kitchen mixers. “Thanks to strict quality management even during the manufacturing process, we ensure that only premium-quality goods leave our company,” said Hansgrohe CEO Otto Schinle. www.hansgrohe-usa.com
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Ric Larson has seen firsthand the damage bei environment by pollution, toxic chemicals and groundwater supplies. Now he reports on Aqu dedicated to providing its customers with the best 106
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hile serving in the US Navy, I was stationed in the Philippines and was appalled to see the squalid conditions in which some people lived, with raw sewage polluting their rivers and streams and affecting their drinking water supply, and the government unable or unwilling to do anything about it. The Navy base at Subic Bay had clean drinking water, but if you left the base to explore the outlying islands and countryside, you were advised not to drink the water due to the real possibility of nausea, lung irritation, skin rash, vomiting, dizziness, and in extreme cases, even death.
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The US too has had its well-documented share of contaminated water, with people becoming sick after drinking water containing bacteria and swimming in contaminated lakes, resulting in dire warnings and closed beaches. There are companies, however, that are dedicated to providing their customers with the best available water supply, working to eliminate these problems on a daily basis. Bryn Mawr, Pennsylvania-based Aqua America is a leading provider of water and wastewater treatment services in 14 states with over three million customers. It can trace its beginnings back to 1886 when a group of Swarthmore College professors founded the Springfield Water Company in Springfield Township, Pennsylvania, primarily for the purpose of tapping into a nearby spring water supply to provide local residents with naturally filtered, clean drinking water, giving them the opportunity to abandon their wells for a more healthful water supply. Almost 40 years later in 1925, Springfield Water Company grew into a large utility serving the residents of 58 municipalities located in three counties, and the company’s name was changed by a vote of its shareholders to Philadelphia Suburban Water Company (PSW). By 1968 the board of directors voted to establish a holding company, the Philadelphia Suburban Corporation (PSC), and in July 1971 it was listed on the New York Stock Exchange. By the 1980s PSW began to implement a strategy of growth through acquisition—formulated on and stemming from its purchase of three Chester County water systems—resulting from stagnant growth in some of its municipalities. Growth through acquisition was so successful that by 1998 PSW acquired 27 more water systems,
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adding more than 50,000 customers to its growing list. In 1996 the company made a foray into wastewater treatment systems by purchasing a facility in Chester County, and then another in Bucks County the following year. The company changed names again in 2004 to Aqua America, with the 2003 purchase of AquaSource, a water and wastewater treatment utility that served over 400,000 customers in Florida, Texas, Virginia, North Carolina, South Carolina, Indiana and Missouri. Subsequent purchases of utilities and water services companies in North Carolina and Florida in 2004 resulted in almost 200,000 additional customers. Aqua America is constantly reviewing and implementing ways to provide high-quality water for its customers. When water is collected and stored in naturally occurring reservoirs through the force of nature (raw water), it has a tendency to clarify and purify through the actions of oxygen, sunlight and other natural agents. As a result, foreign matter and bacteria are for the most part removed naturally. The company then pumps the water through low-lift pumps (centrifugal pumps that direct water from the raw water source to underground flocculation and settling basins) into its treatment plants where it is treated with chlorine to kill any remaining harmful microorganisms. A coagulant is added (usually liquid alum) that forms a thick, gelatinous substance known as floc (a fine, fluffy mass formed by the aggregation of suspended particles), which acts as a magnet to trap and suspend any impurities in the water. In addition to the coagulant, finely powdered carbon may also be added to remove any unpleasant odors and taste that may occur
Aqua America
Atlantic States Cast Iron Pipe Company American made—green manufacturing For over 150 years, Atlantic States Cast Iron Pipe Company, a subsidiary of McWane Inc., has been dedicated to producing quality water and waste water transfer products, maintaining environmental and public health standards for our nation’s water infrastructure. Providing ductile iron pipes, flanged pipes, restrained joint and specialty pipes; along with the valves, hydrants, fittings, and accessories available from additional McWane Inc. owned and operated entities, Atlantic States is a key contributor to infrastructure revitalization both domestically and internationally. As a LEED certified manufacturer creating new products from nearly 100 percent recycled materials, Atlantic States is charting new courses in environmental stewardship every day. Our state of the art emissions control systems have been lauded on both the State and Federal levels as a breakthrough in responsible and green manufacturing. Our storm water runoff capture and reuse programs supplement this commitment to a better world. Following the beliefs of our founder, J.R. McWane, Atlantic States honors our heritage by manufacturing products which are lasting and sustainable. We invest significantly in the future of our business, our employees, and our communities. We commit to excellence, integrity, service and quality. We strive to adhere to the highest standards of workplace safety and environmental leadership based in responsibility. As a participating member in numerous precedent setting optional programs, both with safety organizations such as OSHA and energy supply companies; our voluntary activities and the decisions guided by such lead to substantial energy savings to the company and superior workplace safety for all. Implementing lessons of the past improves and protects everyone’s future. Recent expansion by Atlantic States into supplying domestic waterworks products internationally to places such as Jamaica, Puerto Rico, and Africa extends our environmental leadership around the globe. Atlantic States’ vendor relationship with AQUA America Inc. expands these goals and philosophies to new and greater heights. Working with and learning from a renowned company such as AQUA, Atlantic States accepts the challenge their stringent requirements demand, and looks forward to growing stronger and cleaner as a result throughout the years ahead.
through the decay of organic materials. It may be required in this process to add ammonia to the water, which acts in combination with the chlorine to assist the carbon in reducing further unpleasant tastes or odors. The pre-treated water is then flowed through flash mixers—which are tanks that agitate the water, causing the flocculation to form into a mass heavy with impurities—and then reaches a sedimentation basin and sinks to the bottom. The water is introduced to a series of filters to remove any particles or impurities that are not removed in the sedimentation basin. The water slowly seeps through filters composed of anthracite coal, sand and gravel contained in large cement boxes. A small amount of chlorine disinfectant, lime and corrosion inhibitor are added to the water as it flows through the distribution
system, where it is lifted through high-lift pumps (pumps that discharge treated water into arterial mains) into distribution piping and finally to a home or business. Aqua America employs over 1,600 people and has grown through more than 130 water and wastewater treatment acquisitions since the 1990s, and it is poised to expand even further due to the installation of solar energy in selected plants that have been weaning the company off the costly traditional sources of energy for plant operations. With the availability of US government tax credits and depreciation deductions, Aqua America is thriving, with the goal being to continue providing the best water and waste treatment services to an even wider cross-section of the American public at the lowest cost possible. www.aquaamerica.com
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