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June 2015

miningglobal.com

CATERPILLAR AN INSIDE LOOK AT MINESTARTM TECHNOLOGY MINING FOR CASH: Financing Incentives For Canadian Mineral Companies

TOP 10 TR

M I N I NG

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of 2015


TECHNOLOGY

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EDITOR’S COMMENT

IN THIS ISSUE

“Everything we invent, design and manufacture has one primary purpose: To help our customers succeed. Our products help customers get the job done, with the lowest owning and operating costs possible” – Doug Oberhelman, Caterpillar Chairman & CEO I N T H E J U N E E D I T I O N of Mining Global, we

explore the inner workings of Caterpillar’s MineStar technology to learn how the futuristic system is improving safety, efficiency and profitability in the mining sector. The world’s largest equipment manufacturer also reveals what’s next for the mining technology. Also this month, from rising operational costs, declining ore grades and a general lack of financing, 2015 has been a challenge for mining companies to say the least. According to the annual “tracking the trends” report by Deloitte, the struggle is expected to continue. We examine the top 10 trends for 2015 as identified by the consultancy firm, and reveal possible long-term solutions. Lastly, we break down everything global mining firms need to know about capitalizing on incentives in Canada’s sector. Don’t forget to check out our interview on Penguin ASI, a leading research, development and prototyping company quietly constructing the next chapter in the mining revolution.

Enjoy the issue! Robert Spence Editor robert.spence@wdmgroup.com

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CONTENTS

Features OPERATIONS

34 Kunooz Oman Holding SAOC

6

INSIDER ACCESS: A LOOK AT CATERPILLAR’S MINESTARTM TECHNOLOGY FINANCE

MINING FOR CASH:

14

TOP 10

22 MINING TRENDS

4

June

46 50

Northline Joy Global


62 54

PlantMiner

Penguin ASI

Company Profiles MIDDLE EAST 34 Kunooz Oman Holding SAOC

AUSTRALIA 46 Northline 54 PlantMiner

CANADA 50 Joy Global 62 Penguin ASI 70 Nyrstar Mine Langlois

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O P E R AT I O N S

An Inside Look At C TM MINESTAR TEC

THE WORLD’S LARGEST EQUIPMENT MANUFACT MINERS TO ENHANCE SAFETY, REDUCE COSTS, IM


CATERPILLAR’S CHNOLOGY Writ ten by: ROBE RT SPE N C E

TURER CONTINUES TO INNOVATE NEW WAYS FOR MPROVE PROFITABILITY AND BOOST EFFICIENCY.

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O P E R AT I O N S IT’S A TOUGH time for the mining industry. The commodities sector continues to struggle with unstable prices, casting uncertainty across an industry whose fate is tied to the materials it extracts. It’s an unfortunate setting, but for equipment manufacturer Caterpillar Inc., necessity continues to be the mother of innovation. The U.S.-based equipment manufacturer has formulated Cat MineStar™—a comprehensive suite of mining technology products to contest

the volatile environment companies face. Cat’s brainchild enables miners to configure technologies to fit their needs, providing everything from material tracking to sophisticated real-time fleet management, machine health systems, autonomous equipment systems and more. MineStar™ uncovered Simply put, MineStar™ is designed for mine operations and equipment management. The system is comprised of five configurable

Minestar Fleet control room for truck and shovel mine

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June 2015


C AT E R P I L L A R ’ S M I N E S TA R TM T E C H N O L O G Y

features -- Fleet, Terrain, Detection, Health and Command -- that have the ability to enhance mine site safety, reduce costs, improve profitability and boost efficiency. FLEET provides an array of services from real-time machine tracking to assignment and productivity management. Fleet enhances the management of all types of equipment operations, across one or multiple mine sites, as well as enabling fleets to share data and information with other

electronic mine management systems. TERRAIN is a powerful tool that enables high precision management of drilling, dragline, grading and loading operations through the use of guidance technology. With in-cab display, Terrain provides operators with exact position of their machine within its work zone, including work to be done and completed work, as well as highlighting avoidance zones. DETECT is designed to improve safety. Using a combination of radars, cameras and an in-cab display, Detect provides equipment operators with enhanced awareness of its immediate environment, including manned or remotely controlled equipment, for increased site safety. The Detect system also has a range of additional capabilities to fit each and every site’s needs. HEALTH includes comprehensive health equipment and asset monitoring capabilities to deliver critical eventbased machine conditions and operating data for the entire fleet. The objective for Health is to identify potential equipment problems before 9


O P E R AT I O N S

Operating autonomously at Fortescue Metals Group’s Solomon operations in Western Australia failure, minimizing unscheduled downtime and productivity loss. Health also goes beyond just equipment health, providing problem areas within the mine site itself to generate reports showing where health and operational alerts occur. COMMAND is the next phase in mining automation. It provides various levels of operator control from remote control, semi-autonomous and fully autonomous systems for surface and underground mobile mining equipment. By integrating 10

June 2015

Fleet, Terrain, Detect and Health, the innovative system is designed to deliver dramatic improvements in safety, productivity and availability during operations. Adding value to MineStar™ Earlier this year, Caterpillar made a minority investment in Uptake to jointly develop an end-to-end platform for “predictive diagnostics” to help customers monitor and optimize their fleets more effectively. The idea is to take the mountains of data spewing from Cat’s equipment and


C AT E R P I L L A R ’ S M I N E S TA R TM T E C H N O L O G Y

turn it into meaningful information that can help customers catch potential maintenance issues before breakdowns occur, minimizing downtime. “In the early days, we looked at autonomy for just trucks. Now, we look at mining systems and integrating autonomous technology through the entire mining operation process— from planning to reclamation,” said Ed Rapp, group president for Resource Industries at Caterpillar Inc. “The partnership with Uptake will do two things: Take our data analytics from our machines and take it to another level. It will also take the data and integrate it into the work flow. Uptake has a lot of experience in this. It will not only predict potential failures but it will initiate the work flow to ensure action is taking place.” According to Doug Oberhelman, chairman and CEO of Caterpillar, the partnership will combine Caterpillar’s world-class product engineering and design expertise with Uptake’s software, application and data analytics expertise. “As a result, we’ll be able to transform the quintillion bytes of incoming data we see every day into useful

information we feed back to our customers for on-the-spot decisions and planning purposes to further reduce owning and operating costs.” “We’ll build a platform to bring the next generation of our technology services and products to market sooner, and will act as a springboard for years of development after that. We want to empower our customers with the insight necessary to shift from a reactive ’repair after failure’ mode to a proactive ’repair before failure’ stance.” Customer-driven technology The purpose of MineStar™ is to enable companies to improve operations by simultaneously reducing costs while enhancing safety. To effectively do so, as well as meet the needs of their customers, Caterpillar strives for continuous improvements. In May, Caterpillar invited its customers and dealers to Tucson, Arizona to learn more about their MineStar™ technology and how it can improve operations for them. According to Rapp, one of the purposes of the conference is to gain first-hand feedback from customers on MineStar™, and assess how they can improve to 11


O P E R AT I O N S

Object detection sensors on front of Cat large mining truck 12

June 2015


C AT E R P I L L A R ’ S M I N E S TA R TM T E C H N O L O G Y

Truck controller’s station at Navajo autonomous truck trial meet the needs of their customers. “For me, it’s real simple: we need to be driven by customers each and every day. Conferences like this are our opportunity to get firsthand feedback from customers to hear about the things customers like about the technology, or the things they don’t like.” Rapp added, “Customer feedback provides two things: it points you in the right direction, and it provides collaboration. If you can sit down with an individual customer and talk about their issues, they may give you a narrow view. However, if they can listen to someone in a similar application, a similar challenge, it

opens their minds up in terms of the possibilities. I think we get the best input when we put multiple users together and let them collaborate.” “Our conferences get the highest level of participation when mining has been at its most depressed level. It tells you they see value in this industry, and so do we,” concluded Rapp.  For Caterpillar, necessity remains the mother of all invention. That mentality hasn’t changed. For the last 90 years Caterpillar Inc. has been making sustainable progress possible while driving positive change on every continent. With MineStar™ at the helm, the equipment manufacturer is primed to make it another 90. 13


FINANCE

MINING for Cash: Everything you need to know about capitalizing on incentives in Canada’s mining sector. Wri t t e n by: BRYN DO N KYDD, N ational Le a d e r O f B d o C a n a d a’s M i ni ng G ro u p

EVALUATING A MINERAL project and bringing it into production is a long, capital-intensive process. Particularly given the current economic climate where exploration and development funding can be scarce, mineral companies need to stretch every dollar. The Canadian Government has a number of generous incentive programs designed to encourage mineral companies to develop Canadian projects in order to retain the economic benefit of those projects within our great country. As with most 14 June 2015

government programs, it’s important to engage in the process carefully so as to fully realize the advantages while minimizing exposure to unnecessary liabilities. Mining Exploration Tax Credit Programs Many Canadian provinces and territories have mining exploration tax credit (METC) programs or a variation thereof. Those offered by British Columbia and Quebec


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FINANCE are the more generous of the available programs with the highest available being 38.75% of qualifying exploration expenditures. Generally, these programs may provide a company with a refundable tax credit as a percentage of qualifying expenditures claimed. Qualifying expenditures include those incurred on “grass roots” exploration activity with a higher tax credit rate if incurred within certain geographical areas within the province or territory as a means to encourage such activity and further the economic benefit from the mining industry to that province or territory.

Qualifying Criteria When considering such programs in an exploration budget, it is important to understand whether such activity will qualify for the relevant program and the amount that can be expected to be received. To qualify for any METC program, the company claiming the credit must be a corporation with a permanent establishment in the relevant province and must not to be tax-exempt. Refund Limitations Assuming the company’s claim qualifies, the amount of credit to be received varies within jurisdictions, with additional amounts available

Qualifying expenditures for METC program include those incurred on “grass roots” exploration activity

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MINING FOR CASH

for expenditures for activity in certain geographical areas, such as in the Quebec far north. It is key to understand the specifics of the applicable METC program early on in order to avoid shortfalls against budgeted tax credits. Preparing for CRA Scrutiny The Canada Revenue Agency (CRA) is vigilant in its administration of the Income Tax Act. Part of such activity includes audits of significant claims through METC and other such programs that they administer. It’s a reasonable expectation that a significant claim through a METC program will be subject to CRA audit and, as such, it is prudent to ensure any METC claim is thoroughly and accurately prepared, with detailed documentation maintained to defend the claim in the event of an audit. Depending on a company’s internal resources and capabilities, the engagement of an experienced tax professional in the preparation of a METC claim may serve to reduce the likelihood of a CRA challenge of all or a portion of a claim and otherwise reduce any delay in refund of the credit in the event of a CRA audit.

Flow-through share program Flow-through shares are a common tax incentive program used by mineral exploration companies as they can be a good option for companies with projects in the “grass roots” exploration stage. A flow-through share is a nonprescribed, “plain vanilla” common share that allows the company to “transfer” the qualifying expenditures to the shareholder for a deduction on the shareholder’s tax return. Certain provinces, such as Quebec, have enhanced tax benefit to the flow through shareholder for funding spent on mineral exploration performed in certain strategic geographical, such as the far north in Quebec. This tax deduction would be of limited value to the company given that the utilization of the ensuing non-capital losses is uncertain or far off in the future. However, this tax benefit is attractive to investors with significant taxable income to shelter, effectively providing a discount on the flowthrough share for the purchaser. Qualifying criteria In general, flow-through funds must be spent on “grass roots” 17


FINANCE exploration activities incurred for the purpose of determining the: • Existence; • Location; and • Extent or quality of a mineral resource in Canada, including but not limited to the following activities: > Prospecting; > Carrying out geological, geophysical or geochemical surveys; > Drilling by rotary, diamond, percussion or other methods; > Trenching, digging test pits and preliminary sampling; or > Certain pre-production activities.

The look-back rule The timing of the “transfer”, or renunciation, of the qualifying expenditure to the shareholder can occur either before or after the funds from the issuance of flow-through shares are spent by the company. The former option is referred to as the “look-back rule” and carries with it certain drawbacks. When the look-back rule is applied, the CRA encourages expedient spending by levying Part XII.6 tax “penalties”, which are deductible by the company, on unspent funds 18 June 2015

In many cases, sha apply the look-back ru shortly after renunciation. Once in effect, these penalties are calculated monthly at the CRA’s prescribed rate (1% yearly as of the date of this publication) with an additional 10% “penalty” applied at the end of the first calendar year following the year of renunciation if the funds are unspent. Should funds remain unspent within 24 months after the month of the signing of flow-through share agreements, the CRA will reverse the shareholder’s tax benefit which can result in the shareholder repaying the associated tax refunds and may force the company to reimburse the


MINING FOR CASH

areholders hungry for an immediate tax benefit will pressure the company to ule on more funding than it can effectively spend prior to incurring penalties. amount of the lost tax benefit if the shareholder agreement contains an indemnity clause. The existence of a limited indemnity for tax losses will not affect the shares’ eligibility for renunciation under the flowthrough share program. Outlays for non-qualifying expenditures will be rejected by the CRA, which may result in penalties and interest should there be insufficient qualifying expenditures to cover the full amount of the flow-through funds raised within the necessary time period. These types of unpleasant scenarios can be avoided by applying

the “look-back rule� only to funds to be spent before the trigger date for penalties: February 28 of the calendar year following the year in which the funds were raised. In many cases, shareholders hungry for an immediate tax benefit will pressure the company to apply the look-back rule on more funding than it can effectively spend prior to incurring penalties. Should this scenario be anticipated, the resulting penalties should be considered in the cost of the financing and, if possible, the company should avoid the inclusion of an indemnity clause in the shareholder agreement. 19


FINANCE Scientific Research and Experimental Development tax credit program The single largest indirect funding program in Canada is the Scientific Research and Experimental Development (SR&ED) tax credit program, which allows companies to receive tax credits or generous refunds for qualifying expenditures. Companies developing new technology including new products,

new processes or other new technological knowledge can generate significant qualifying expenditures related to labor costs, materials consumed or transformed, Canadian contractors and other overhead costs directly related to qualifying activities. The most generous refundable SR&ED tax credits can be available to small and medium-sized private Canadian corporations. Large private Canadian, all public and all non-Canadian

The key requirement to receive the refundable federal credits is that the entity must be a Canadian-controlled private company (CCPC) meaning that it is a Canadian corporation that is not publicly listed or controlled by non-residents

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MINING FOR CASH

corporations benefit through the less generous, non-refundable SR&ED tax credits. There is no defined budget for the program, meaning that any company incurring qualifying expenditures is eligible; however, claims must be filed within 18 months of the end of the company’s tax year. Qualifying criteria The key requirement to receive the refundable federal credits is that the entity must be a Canadian-controlled private company (CCPC) meaning that it is a Canadian corporation that is not publicly listed or controlled by non-residents. For this reason, the SR&ED program is rarely utilized by early stage mineral exploration companies as these are often public companies and thus qualify only for a tax credit, which is of little use to a loss-making exploration stage entity. However, mining companies with profitable projects where technological advances are made during the construction and ongoing operation of a revenue producing project can take advantage of this program with such tax credits reducing their ongoing tax expense. Most provinces also have their own

SR&ED credit and some of them may be refundable even if the entity is not structured as a CCPC. Despite the planning efforts of any initial company structure, it is important to note that small changes within the R&D entity’s structure could prevent the company from participating in the refundable SR&ED tax credits. Further to this, the ultimate determination of eligibility can be made only by the CRA. It’s important that any company claiming SR&ED tax credits follow the scientific method and track all potentially related activities and the associated costs contemporaneously. We find that a periodic review of candidate SR&ED activities by an experienced SR&ED consultant can be beneficial to maximize the claim. Many companies are surprised to find out what actually qualifies.

ABOUT THE AUTHORS This post was written in collaboration with Daryl Maduke, International Tax Partner at BDO Canada and David Spicer, SR&ED Partner at BDO Canada, both of whom have been valuable resources and trusted colleagues for many years. Bryndon Kydd is the head of BDO’s Natural Resources practice in Vancouver, Canada. He can be reached at via bkydd@bdo.ca on LinkedIn.

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TOP 10


TOP 10

Mining Trends The who, what & where of 2015 Written by: R O B E RT S P E N C E

We’ve hit the halfway mark of 2015 and the mining industry has already seen its share of hurdles. From rising operational costs and declining ore grades to a general lack of financing, 2015 has been a challenge for mining companies to say the least. According to the annual “tracking the trends� report by Deloitte, the struggle is expected to continue. We examine the top 10 trends for 2015 as identified by the consultancy firm, and reveal possible long-term solutions.

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Engaging With Governments

Last but not least, the biggest trend for 2015 will be finding new ways to communicate and collaborate. This includes making accommodations with governments at all levels in numerous nations to balance their needs as well as the needs of the community. For governments and miners to succeed, they need to devise new ways to communicate and collaborate, across all levels of government. “While some governments are working to accommodate the industry, others are backing miners into a corner. Unfortunately, these governments may be in danger of killing the goose that laid the golden egg if their policies force companies to defer their investments or exit a country entirely,� said Tim Biggs, mining leader, Deloitte UK. According to Deloitte, strategies to counter regulatory uncertainty include working to build better government relationships, becoming more vocal in both industry association and through social media, measuring social impact, helping to set the policy agenda, and better leveraging mobile technologies. SOLUTION: Build better government relationships; locate in regions where you’re wanted; speak out; measure social impact; help set policy agenda; and get serious about social media.

24 June 2015


TOP 10 MINING TRENDS

09

Stakeholder Engagement

One of the big problems mining companies are face today is effective stakeholder engagement. “The mining industry does not fully understand the complexities associated with stakeholder engagement. Too often, relationships with stakeholders are adversarial instead of collaborative. Miners need to turn this equation around by building relationships with stakeholders long before requesting any concessions from them,� said Andrew Lane, mining leader, Deloitte Southern Africa. For mining companies to be successful, they need to work to build win-win platforms. They need to communicate in new ways and leverage the power of social media to work in their favor. Miners need to work with mining associations to negotiate with local communities, improve their corporate giving practices and consult with affected community stakeholders to plan effective mine closure plans. SOLUTION: Build win-win platforms; communicate in new ways; mine the social networks; leverage available resources; get strategic about giving; and think long-term.

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08

Planning And Embracing Uncertainty

Whether they want to admit it or not, mining companies don’t have a crystal ball. They can’t predict the future in commodity prices nor can they predict geopolitical movements. They must, however, learn to embrace uncertainty. “Given mounting levels of volatility and change, miners need to take a broader view of risk management and scenario analysis. This includes taking a much greater range of variables into account to inform their decision making,” said John Woods, mining leader, Deloitte Southern Africa (Zambia). While mining companies can’t control political issues, they can develop response strategies including lobbying for greater policy clarity, leveraging mining associations to influence government policy, becoming more risk intelligent and planning for myriad scenarios. SOLUTION: Lobby for policy clarity; work together; become risk intelligent; and plan for a myriad of scenarios.

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TOP 10 MINING TRENDS

07

New Skillsets

The mining industry needs talented employees with a wide range of skillsets. The specialized skillsets needed, however, are in short supply. The industry is facing talent shortage in all stages of business. Beyond demand for mining engineers and geo-metallurgists, mining companies looking to improve innovation and technology are now competing for scare technological talent against sectors that traditionally have more appeal than mining. “Many mining companies are struggling to attract specialized skills, not only at the operational and management levels, but also in the boardroom. Failure to bolster these missing skillsets could lead to excessive reliance on a dwindling pool of qualified talent— weakening operational performance, compromising effective board constitution and complicating corporate efforts to achieve greater diversity,� said Nicki Ivory, mining leader, Deloitte Australia. To attract and retain new skills to the sector, companies need to explore new talent management systems, get better at recruiting talent in high demand, invest in more targeted training and diversify. SOLUTION: Commit to diversity; explore new systems; get competitive; and invest in training.

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06

Trouble For Junior Miners

The current economic environment of the mining industry has pushed junior miners into survival mode; it’s become a kill or be killed setting. Mounting pressure to boost shortterm profits is forcing many companies to ignore current investments that may potentially lead to longer-term upside. “Juniors are still mired in cost containment and productivity improvement initiatives. Given how close some companies are to the wall, they’re actively seeking strategies to lower their cost profile. Companies are still struggling to raise money and we’re sure to see more retrenchments in this area before these issues are resolved,” said Christopher Lyon, mining leader, Deloitte Chile. According to Deloitte, to capitalize on shifting ownership patterns, juniors should be taking steps to get their assets in order and consider options from partnership and joint ventures to sale and consolidation. SOLUTION: To mitigate associated risks and leverage emerging opportunities, junior miners should get assets in order; consider all options; and prepare for the upside.

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TOP 10 MINING TRENDS

05

Lack of Capital

Are we at the bottom of the market? With global mining stocks down 43 percent since 2010, the struggle for companies to raise capital is indeed real. And while it’s beginning to show signs on larger mining companies, it’s proving fatal for a huge collection of junior miners and mining services. “The lack of capital available to juniors may force a dramatic industry consolidation. Some projects will need to be shelved. Most development-stage projects will be put on hold. And many distressed companies should consider ways to strike a merger of equals. The industry should also prepare for a shakeout. Too many companies are already running on borrowed time,” said Nikolay Demidov, CIS mining leader, Deloitte CIS (Russia). While solutions are limited, juniors may be able to avert disaster by wooing foreign investors, pooling their resources, exploring alternative financing options and positioning for private equity. SOLUTION: For mining companies to stay afloat, they need to woo foreign investors; pool resources; explore alternative financing options; and position for private equity.

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04

Managing Supply/Demand

The one thing companies understand about the mining industry is they can’t control demand; they can only control supply. Given the financial uncertainty of the industry, along with rising operating costs and an array of environmental and local community challenges, it’s no wonder many companies nowadays are choosing to buy development-stage projects rather than build from the ground up. “I suspect some areas of the mining industry may be heading towards a cliff. Several organizations have shut down their development teams and cut back on development projects, putting a strain on the project pipeline, particularly in sustained lower commodity price regimes. Over time, this could see us deplete current reserves, resulting in a reversal of the current supply/demand imbalance,” said Andrew Swart, consulting mining leader, Deloitte Canada. Given these problems, this exploration slowdown could potentially generate a supply/imbalance in the next decade or two. To prevent the risk of future supply constrictions, mining companies need to improve balance between meeting short-term investor and analyst expectations, while maintaining project pipelines. SOLUTION: Balance short-term expectations with long-term needs; find opportunities to partner; think local; and keep a finger in greenfield exploration. 30 June 2015


TOP 10 MINING TRENDS

03

Reducing Project Power Costs

The mining sector’s dependence on traditional sources of energy needs to come to an end. According to Deloitte, companies need to consider switching to renewable sources of energy as capital costs for renewable energy, which was once very expensive, have dropped considerably in recent years. ‘With each passing year, energy costs in the mining sector become more prohibitive. These include rising costs for diesel fuel due to falling grades and longer haulage distances, building long-distance transmission lines to connect to local grids, transporting fuel to high-altitude sites and installing appropriate ventilation systems. Renewable energy alternatives can help resolve these issues and wrestle runaway costs back under control,” said Adriaan Davidse, mining innovation leader, Deloitte Canada. Mining companies need to consider a new approach to energy in order to reduce costs and improve environmental performance. SOLUTION: Manage energy as a portfolio; consider a broad range of renewable alternatives; don’t forget unconventional fossil fuels; engage early; explore all available financing options.

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02

Innovation

According to Deloitte, innovation is the new key to survival for mining companies. “At its most basic, innovation presents an optimal strategy for controlling costs. Companies that have invested in such technologies as remote mining, autonomous equipment and driverless trucks and trains have reduced expenses by orders of magnitude, while simultaneously driving up productivity.” In 2015 and forward, miners will need to overcome traditional conservative habits and implement innovation into corporate DNA. “Traditionally, companies approach strategy-setting by determining which trade-offs they must make to achieve their goals. True innovators think way beyond the trade-offs. Innovation is about creating breakout performance by changing the rules of the game. It’s not about implementing best practices; it’s about devising new practices,” according to the report. SOLUTION: Embed innovation into corporate DNA; think big, test small, scale fast; leverage emerging technologies; become part of an innovation; prepare for new operational realities.

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TOP 10 MINING TRENDS

01

Back To Basics

For mining executives, back to basics essentially means getting back to productivity. Because companies haven’t been able to rely on a commodity price rally, they’ve had to focus on achieving sustainable productivity improvement, whether through supply chain or asset management. The key theme here is operational excellence. SOLUTION: To achieve operational excellence, Deloitte recommends four things mining companies should do: Get serious about analytic; embrace innovation; be transparent; revisit company culture.

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KUNOOZ OMAN HOLDINGS JOURNEY TO AN IPO Written by: Nye Longman Produced by: Craig Daniels


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KUNOOZ OMAN HOLDINGS SAOC

The companies of the Al Rawas family were consolidated into Kunooz Oman Holdings in 2014; the group is hoping to extend its growth with a listing on the Muscat Securities Exchange

T

he consolidated companies of the Al Rawas family, with a total revenue of $ 43 million in 2014, are strategically positioned within the Sultanate of Oman, at the crossroads of some of the fastest growing economies in Asia, Africa and Europe. Oman has an international reputation for stability in its political, economic and social systems and has created strong infrastructure, healthcare, communication and trade networks, as well as an advanced transportation system off the back of its flourishing oil-based economy. Journey to an IPO The Government of Oman has committed to diversifying its economy in order to reduce its reliance on oil exports; the mining and downstream capabilities of Kunooz, therefore, are set to play central role in this strategy. It is with this

Crusher at Mihwar Al Wifaq in Muscat

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MIDDLE EAST

Key Personnel Quarrying operations at Al Rawas Marble in Ibri, Northern Oman

bright future in mind that Kunooz Oman is being positioned for an Initial Public Offering (IPO) on the Muscat Stock Exchange. CFO Krishna Karikurchi said: “Kunooz Oman has spent the last two years preparing itself for the listing, restructuring and professionalising itself into a consolidated entity.” The group has recently benefited from relaxation of 15 percent off its initial share capital floating by the Capital Market Authority (CMA) which has taken the required capital from 40 percent down to 25 percent; the Oman Arab Bank has recently agreed to become the venture’s investment bank. As part of its IPO, the company enlisted the unique talents of Dean Cunningham as the group CEO. He was chosen for his distinct skill set that, since his appointment last year, has enabled the group to take significant steps to reach this

Krishna Karikurchi CFO Krishna Karikurchi is a Chartered Accountant with extensive experience in corporate finance and initial public offers, as well as restructuring business units, corporate governance and company law. Prior to his current position he was Group Chief Financial Officer of Al Rawas Holding and its group companies, wherein he played an important role in the restructuring the business.

w w w. k u n o o z o m a n . c o m

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KUNOOZ OMAN HOLDINGS SAOC

Al Rawas Gypsum Mining Operations Salalah

“We have a blend of mature and young energetic skills, driving the day to day operations across the group, our focus is about team work maximising our inputs” – Dean Cunningham, CEO

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critical stage. Having completed a BSc in Mining Engineering, Cunningham accrued extensive experience in corporate finance, marketing, project management, private equity and mining and, overseeing IPO listings for several companies with a similar remit to Kunooz. He said: “I came in October last year to professionalise the business, take it to listing, to implement financial and policy structures and realise its human resources. I have also been tasked with growing the business both locally and internationally into a global mining, processing and value added business: “We have a blend of mature and young energetic skills, driving the day to day operations across the group, our focus is about team work maximising our inputs, endeavouring daily to de-


MIDDLE EAST

Key Personnel

Safety Meeting at Mihwar Al Wifaq in Muscat.

risk our day to day decisions making to enhance the returns to all stakeholders� The Kunooz Group The company logo has been designed to be truly reflective of the group. Seamlessly blended together in the design is the Kunooz name (which is Arabic for treasure) housed within a lattice of five shades of green to represent the five divisions of the group. Al Rawas Mining The Al Rawas Mining Company is located in Salalah, the southernmost region of Oman and has a mining lease to extract 90 percent pure Gypsum. It commenced works in 2010 and since then has established a crushing and screening

Dean Cunningham CEO Dean Cunningham has a unique combination of skills and experiences which made him an ideal candidate for managing Kunooz Oman Holdings through the crucial stages of its IPO. Dean holds a BSc in Mining Engineering and has worked in corporate finance, marketing, project management, private equity and mining.

w w w. k u n o o z o m a n . c o m

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Arabia_ENG_9.6x13.7.pdf

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KUNOOZ OMAN HOLDINGS SAOC

MIDDLE EAST

plant with a 2 million tonne annual capacity. Currently AMC supplies gypsum to India, Africa, Qatar, UAE, Bangladesh and Japan. Mihwar Al Wifaq Mihwar Al Wifaq is a well-known mining company active in the Muscat area with a high-quality plant producing a range of Gabbro aggregates and crushed sand for the construction industry. It is strategically located in Wilayat Seeb to make use of the prime quality natural raw material available in Al Jifnayn.

The Kunooz Group is made up of seven companies

Majan Mining Company Established in 2006 in Salalah, Majan Mining mines and processes limestone for the global steelmaking industry and also supplies a number of clients across India. Its competitive advantage is not only the high quality and close proximity to its customers but the reactivity of the material, which enables lower tonnages consumption in the steel manufacturing process which has a net cost saving impact for its customers. Al Rawas Marble Al Rawas Marble and Granite (RMG) Co. LLC was established in 2007 to offer the finest Omani marble to both the local and international markets. Products exported by RMG globally can be seen adorning numerous architectural marvels across South Korea, Europe, Australia and the UAE. The company maintains a substantial stock of solid

Al Rawas Gypsum Mining Operations Salalah.

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KUNOOZ OMAN HOLDINGS SAOC

“People are encouraged to challenge complacency at all levels in the business; to take ownership, innovate, and think outside of the box” – Dean Cunningham, CEO

Al Rawas Transport, Machinery Hiring and Trading handle all the transporation requirements for the group 42

June 2015

blocks, slabs and tiles to ensure that each client’s demand is methodically met regardless of scale and destination. Salalah Readymix Salalah Readymix is a well-established leader in the local ready-mix concrete industry. Since 2006, the company has had a successful track record of completing numerous high profile projects while adhering to global quality standards. The company currently has 3 batching plants including a fleet of transit mixers, concrete pumps, trailers and cement bulkers. Carmeuse Majan Carmeuse Majan LLC is a joint venture company led by the Belgium-based Carmeuse Holdings SA. The company is located in the Salalah Free Zone and has a single kiln with capacity to expand to an additional seven, each with an annual lime capacity of 125,000 tons per year. The majority of the plant’s output targets the Indian market, where demand for lime products is expected to rise sharply. The Dhofar region’s close proximity to the Indian and Middle Eastern markets, coupled with the presence the port at Salalah, are key factors underlying the success of the company. Al Rawas Transport, Machinery Hiring and Trading Al Rawas Transport, Machinery Hiring and Trading LLC (ART) meets all the transportation


MIDDLE EAST

Weekly schedule maintenance at Mihwar Al Wifaq in Muscat.

requirements within the Group. Currently ART is catering for the complete requirement for Al Rawas Mining moving around 2.2 mtpa to 2.4 mtpa of Gypsum between its mines and the port of Salalah. In addition, it also caters for Salalah Mills, moving cargo over 1000 kilometres between Salalah and Muscat. Cunningham commented that, despite often differing remits, the group was able to maintain an innovative spirit, he said: “People are encouraged to challenge complacency at all levels in the business; to take ownership, innovate, and think outside the box. It’s this creativeness, as well as a sense of being part of a company that will drive successes that give us our competitive advantage as we step into the global market.”

Computerized batch plant controls at Salalah Readymix.

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KUNOOZ OMAN HOLDINGS SAOC

Loading Gypsum at Al Rawas Mining into AL Rawas Transport vehicles destined for the Port of Salalah.

Quarrying activity at Al Rawas Marble at Ibri in Northern Oman. 44

June 2015

Taking on the world While the companies that make up the Kunooz have all had to make changes in order to meet the stringent requirements of the IPO, the group is already well positioned to compete at a global level. Having a base in Muscat and regional office in Salalah close to the local Free Zone and the Deep Water Port provides Kunooz Oman with access to the coastlines of Asia and East Africa, in addition to the other GCC countries. The country also has over 1,700 kilometres of coastline which opens up trade with the Middle East, India, and beyond. Over $2 trillion worth of goods passes through the Salalah Free Zone each year with Kunooz Oman subsidiaries and associates contributing a significant amount of total exports through the bulk terminal in Salalah Deep Water Port. Kunooz Oman has a strategic advantage with


MIDDLE EAST

Company Information INDUSTRY

Mining HEADQUARTERS

Muscat FOUNDED

2014

direct access to the GCC and potential tax free incentives coupled with lower energy costs and tax incentives and financial freedom to set its eyes not only on other territories but also firmly on the future within Oman. Cunningham attributes the successful build up in the IPO process as being due to the forward thinking and positive attitude of the Al Rawas family, he said: “They have always looked to add value to Oman through their historical investments; they want to use Kunooz Oman as growth platform, which is why they have spared no costs and have brought in a professional team to allow this to succeed.� It is therefore evident from its recent proactive approach that Kunooz has succeeded through a combination of its dedication to the success of Oman and its shrewd foresight to bring its business operations into the 21st century.

EMPLOYEES

657 REVENUE

$43 million (2014) PRODUCTS/ SERVICES

Mining, Logistics, Manufacturing.

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PlantMiner:

The one stop, all-encompa shop for plant & equipmen

How Australia’s largest plant and equipment hire market changing the industry Written by: Stephanie C. Ocano Produced by: Camilo Sanchez


assing nt hire

tplace is


PLANTMINER

Michael Trusler - winner of Mining Australia’s Young Achiever of the Year

O

ur team is our competitive advantage.

everything from portable toilets, generators, and air compressors, right up to the largest graders, This is the ideology behind dozers and dump trucks.” PlantMiner—an online portal that Being an all-encompassing oneaims to save time and money for stop shop is the most important procurement officers, estimators and asset to PlantMiner’s success. project managers across Australia when hiring plant equipment. A competitive advantage “We are Australia’s largest In Australia, there was a real need equipment hire market place, for a service that solved the issue we’ve got the most equipment hire of saving the time it took to procure companies and the most individual plant and equipment hire quotes. items of equipment listed in one “The business has flourished place,” said Michael Trusler, CEO of because of that but also because we the company, in a recent interview. deliver a real return on investments “At our portal, clients can hire for our clients,” said Trusler. “They’re 48

June 2015


AUSTRALIA

Dan Wilson

earning a lot of money through the service because they have been making themselves a lot more accessible to searchers of equipment across the country.” Over 70 experienced plant equipment hire experts make up the team at PlantMiner, building the business day in and day out. Their expertise and ability to innovate as a team allows them to recognize a problem within the industry or be given a problem from a client and then procure a solution almost immediately. “The way we innovate with our technology, through our website and

our business development team, we can come up with a new fix within our service to ensure that the problem is solved,” explained Trusler. Expanding into New Zealand PlantMiner’s success is leading them to grow their business and venture into surrounding territories—such as New Zealand. The New Zealand branch of the website went live back in December 2014 and received an immense amount of traction. “We’re already signed up in the marketplace with clients, and a lot of those clients are already w w w. p l a n t m i n e r. c o m . a u

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PLANTMINER

seeing return on investment,” said Trusler. “Some of these clients have only just paid their subscriptions and they are winning thousands of dollars worth of work already. That’s very exciting and we have guys on the ground over there at the moment who are really just getting out there and educating searchers for 50

June 2015

equipment so that they can come to our service and save time and money looking for hire quotes.” New Zealand is a land filled with opportunity for growth as the culture is open to innovation. “It’s a good place to do business—especially for a tech startup,” said Trusler.


MINING

We are Australia’s largest equipment hire market place.” – Michael Trusler, CEO

Overcoming challenges when expanding There are always challenges that come into play when doing business—especially when doing business abroad. It’s a new economy with a unique culture in a remote location that isn’t the easiest to travel to. “An Australian company with w w w. p l a n t m i n e r. c o m . a u

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PLANTMINER an Australian idea operating in New Zealand probably isn’t going to go down that well,” said Trusler. “Having a couple of New Zealanders selling a New Zealand

product is a lot easier and we recognized that quite quickly.” Additionally, in New Zealand, business is much more personal, with face-to-face interaction being

‘PlantMiner’s success is leading them to grow their business and venture into surrounding territories’ 52

June 2015


AUSTRALIA

the norm. Online startups, therefore, have to compensate for this. PlantMiner, however, has found a solution for this. “Something we’re now doing is meeting everyone initially and getting out there on the ground,” said Trusler. “It’s pretty seamless from there, as [clients] seem to know the product and what it’s all about.”

Company Information INDUSTRY

Mining HEADQUARTERS

Hendra, QLD, Australia

New projects on the horizon With expansion still on the mind of Michael Trusler, the United States is next in his line of sight. “We’re doing some investigation into the U.S. at the moment and working on an entrance strategy,” added Trusler. For now, PlantMiner will continue to reinvest into its team, its staff and its culture. “The major investment is into our team and our team culture and ensuring that the product that we have is successful and all of our clients are adequately serviced,” said Trusler. PlantMiner is currently shy of being two years into their five year plan and the company has already exceeded their initial expectations. “We have a couple of exciting things on the horizon,” concluded Trusler.

FOUNDED

2012 EMPLOYEES

70 REVENUE

$50 M PRODUCTS/ SERVICES PlantMiner has over 10,000 searchers from the largest mining, construction and civil companies in Australia searching for and hiring equipment on a regular basis. In addition to this, PlantMiner has signed up 300+ government and council organisations nationwide who have plant and equipment hire needs on a daily basis.

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Northline:

Northline conquers supp chain challenges with en end solutions

By making family and customer top priorities, Northli comprehensive services for a multitude of industries. Written by: Sasha Orman Produced by: Daniel Kadar


plynd-to-

ine provides .


NORTHLINE

Northline provides a one-stop shop for customers across all of their supply chain requirements.

S

ince 1983, Northline has been in the business of moving and storing freight throughout Australia, supporting supply chains to help its clients thrive. “We can provide an end-to-end solution across all industries,” said Craige Whitton, Northline’s Chief Executive Officer. “International transport, interstate transport, intrastate transport, warehousing and distribution— we can tailor a solution or any component of a solution to suit customer’s requirements to solve their supply chain challenges.” 56

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Starting with a line north from Adelaide to Darwin, today Northline offers road and rail freight management, warehousing and distribution, and global freight forwarding from 13 branches serving every major region in Australia. As Northline cultivates its reach and capabilities, it continues to stay true to its Australian roots. Growth in Darwin An important component of growth for any business is self-investing, and Northline today is investing in construction at its Darwin port site


AUSTRALIA

Northline trucks being loaded at a warehouse.

in Australia’s Northern Territory. This marks the third major property development project for Northline in recent years, following a new Brisbane facility in Redbank in late 2014 and a new Sydney facility in Smithfield in January 2014. “We have a new facility that is underway and due to be completed by the end of August this year,” said Whitton of development in Darwin. “It’s about 600 metres from the railhead with great links to road, rail and port facilities, and it’s going to allow us

to get some synergies within our business, to get more efficient and productive and improve the way we do things up there.” The 40,000 square metre facility, under development by Gibb Group with funding and ownership by Charter Hall, is expected to double the size and capacity of Northline’s Northern Territory operations. The decision to increase capacity in operations in Darwin was a conscious one— the site is important to Northline’s history as a business. “The company name Northline w w w. n o r t h l i n e . c o m . a u /

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Charter Hall Group has grown, since its launch in 1991, to become one of Australia’s leading property groups, with a total property portfolio of $12.7 billion & 270 office, retail & industrial properties.

charterhall.com.au/industrial

Delivering industrial


NORTHLINE was created 32 years ago, and the basis of it was a line north from Adelaide all the way through to Darwin—and along the way stopping in Alice Springs, Tennant Creek, and Katherine,” explained Whitton, noting that— while the company has links with every major city from Perth and Brisbane to Sydney and Melbourne today—Darwin is as critical a juncture for trade and distribution as it’s ever been. “The territory has been a harder market for many people—but we always like to take on the tougher challenges,” said Whitton. “From

SUPPLIER PROFILE

AUSTRALIA

that perspective, it’s been a part and parcel of everything we do for the last 32 years. Now is as great a time as ever to expand.” The culture of a family business Northline is a company that takes pride in not just its achievements, but also its identity as a fully Australian, family-owned entity with operations throughout the continent. “Northline is a family business— it is and it always will be,” said Whitton. “We maintain a family culture whilst operating in a completely corporate environment— we try to have the best of both

CHARTER HALL

Since launching in 1991, Charter Hall has become one of Australia’s leading property groups, with a total property portfolio of $12.7 billion & 270 office, retail & industrial properties. With $2.5 billion of predominately long-leased industrial properties under management, Charter Hall is one of Australia’s leading Industrial property specialists covering 1.8 million square metres in key growth markets around Australia. Given the sector’s strong property fundamentals and the increasing interest from both wholesale and retail investors, Charter Hall has been actively growing its portfolio of high quality industrial facilities over recent years and now has one of the largest portfolios in Australia. The group also has an industrial development pipeline of approximately 683,000sqm, with a potential end value in excess of $740 million.

Website: www.charterhall.com.au

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C O M PA N Y N A M E

Northline emphasizes family culture within a corporate environment

worlds. Ultimately, by being family owned, we feel that we are able to look after our people in many ways.� This attention to looking after its people manifests in many ways. One crucial priority at Northline is workplace safety, and it has the records to prove it. At the end of June, the company is slated for a completion of two years injury free, putting its lost time injury 60

June 2015

ratio at zero. The company also takes a keen interest in people with the potential to be an asset in the future. This outlook has propelled Northline’s graduate program, an ongoing two-year internship program where university students work their way through different areas of the business to find the perfect place that best complements their


SECTOR

strengths and interests. “They get signed off by the various managers in each area before they continue, to confirm their competency in that before they move on to the next area, and complete projects and presentations along the way,” Whitton explained. “At the end of that time, they’ll end up in different roles throughout the business—

whether they end up in sales and marketing, or HR, or any other operational parts of the business as well.” Northline currently has seven students enrolled in its graduate program, and successful students can look forward to a bright career: three students who enrolled in the company’s first graduate program 15 years ago still work for Northline w w w. n o r t h l i n e . c o m . a u /

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NORTHLINE education programs as well. It’s all about retention and the development of our staff. That’s where we’re focused.” Growth and expansion There are plans for growth shaping up on the horizon for Northline. With its Darwin development work nearing completion, the business will soon turn its sights toward upgrades in Adelaide. “Between Craige Whitton Redbank in Brisbane, Smithfield in Sydney, and now East Arm in to this day, each one occupying a Darwin—our Melbourne and Perth national management role. facilities were purposely built for us In recent years, Northline has a few years ago, so Adelaide will be been finding additional ways to the only remaining capital city that increase its investments in its we need to redevelop,” said Whitton. people. Starting in July with the next “That’s a little further off, but we financial year, the company has need to have a new development plans to roll out a substantial new finished in Adelaide for 2017, so it’s learning and development program on the drawing board as we speak. that will encompass staff at all levels We will certainly be looking at the of operations. technology and our requirements “We’ll be able to have our over the next 12-18 months.” operational trainers spending While the business is already time with staff in the field, and involved in providing services equally we’ll have a supervisory across a wide cross-section of management and development industries and geographies, it program,” said Whitton. “Then is investing time and effort to we’re going to have some executive expand in a few specialty areas— 62

June 2015


AUSTRALIA

specifically global freight forwarding, importing and exporting with China, and freight services and warehousing solutions specifically for customers in the mining, construction, and oil and gas industries that are looking for cost savings as commodity prices fluctuate. “As far as Northline’s concerned, over the next few months we will see expansion across all of the sectors, whether that be transport or warehousing, international or mining,” said Whitton. “We see them as growth opportunities for us going forward, and I think that will also apply to all geographies, particularly within Australia. So there’s plenty on the horizon. ”

Company Information INDUSTRY

Mining, Supply Chain HEADQUARTERS

Norwood, SA, Australia FOUNDED

1983 EMPLOYEES

450-500

Northline’s points of difference What ultimately sets Northline apart from the competition is not merely one point, but several traits working together in tandem. “The first one is that we’re Australian owned and operated; the second is that we offer a breadth of service that not many others have—whether it’s local, interstate or international transport and warehousing, we can provide a one stop shop for customers across all of their supply chain requirements,” said Whitton. “Then, the focus on our customers—we have an internal mantra of delighting our customers—and making sure that we’re at the cutting edge of technology. Those four things combined are the four strongest traits—and points of difference for Northline.”

REVENUE

Privately Held PRODUCTS/ SERVICES

Incorporated in 1983, Northline strives to be the supply chain provider of choice to the Australian market. With 13 branches across the country, Northline is able to offer comprehensive and integrated road and rail freight management and distribution solutions for customers in any industry.

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Joy Global Inc. Shifting into Overdrive

With a major acquisition under its belt, Joy Global is forging ahead to expand horizons and establish a clear presence in its latest market Written by: Robert Spence Produced by: Bobby Meehan


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JOY GLOBAL INC.

A Joy Global Service Center in Minnesota.

As a leading provider of worldclass service and equipment, Joy Global is one of the biggest names in the mining equipment sector. The U.S.-based company specializes in high-productivity solutions for surface and underground mining. Its machinery is used extensively for the mining of coal, copper, iron ore, oil sands, gold and other minerals. And while Joy Global has already established itself among the most innovative equipment manufacturers in the world, the company isn’t finished yet. With a major acquisition under its belt, Joy is forging ahead to 52

june 2015

expand horizons and establish a clear presence in a new market for the company: hard rock. The company’s vision for the endeavor includes a central focus on operational excellence coupled with a refined approach to safety and environmental stewardship. Entering a new market Last year, Joy Global acquired the underground hard rock mining assets of Mining Technologies International Inc. (MTI), including all assets associated with MTI’s hard rock drilling, loaders, dump trucks, shaft sinking and raise bore


MINING GLOBAL

A Joy Global employee stands in front of an LT-650.

product lines. The $51MUS acquisition set the stage for Joy Global’s move into the underground hard rock mining sector. “The acquisition provides a unique blend to our broad portfolio of products and it’s a substantial entry point into this market,” said Josh Wagner, Joy Global’s general manager of hard rock underground equipment. Joy Global also recognized it needed to secure the most important part of MTI’s success: its employees. “From day one we knew we needed to get those people on

board,” said Wagner. “Thankfully we were able to hire the necessary staff and everyone has been very responsive to us. They understand we’re investing in them and where we want to take this business.” By combining MTI’s range of complementary products with Joy Global’s proprietary technology and global direct service, the acquisition represents an exciting opportunity for the company to make a significant impact in a new market. Immediately after the acquisition, Joy Global began working to upgrade MTI facilities and improve conditions. w w w. j o y g l o b a l . c o m

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Customers in the Mining Industry call us when they are challenged by unique requirements, pressured to take costs out of their supply chain or frustrated securing reliable supply.


Proud Supply Chain Partner of Joy Global Hard Rock for Over 15 Years.

A. M. Castle & Co. (NYSE:CAS) is the foremost provider of specialty products, services, and supply chain solutions. We are recognized as a leading distributor of carbon, alloy, stainless steel, nickel alloys, aluminum, titanium, cast iron, brass, copper and plastic, as well as a global resource for complex supply chain solutions. Operating in more than 50 locations throughout North America, Latin America, Europe and Asia, we work with international OEMs to better serve their multi-location production requirements and delivery needs. We also leverage our long-standing metals experience and focus on processing and other value-added services to meet the unique requirements of industries such as mining, oil and gas, power generation, heavy equipment, aerospace and defense.

2150 Argentia Road Mississauga, ON L5N 2K7 1-800 -806 - 6660 mining@amcastle.com w w w.amcast l e.com Canadian Branches: Toronto, Edmonton, Saskatoon, Winnipeg, Montreal


SUPPLIER PROFILE

CASTLE METALS Castle Metals has a rich heritage dating back to 1890 in the Chicago area. Today, Castle operates from more than 50 facilities throughout the world. Castle is a leading distributor of specialty metal products, valueadded services and complex supply chain solutions. Castle Metals’ broad range of products includes carbon, alloy, stainless steel, nickel alloys and aluminum. Operating in North America, Latin America, Europe and Asia, we work with international OEMs to better serve their multi-location production requirements and delivery needs. We also leverage our long-standing metals experience and focus on processing and other value-added services to meet the unique requirements of industries such as mining, oil and gas, power generation, heavy equipment, aerospace and defense. By expanding our capabilities and services, A. M. Castle is growing to serve the more complex requirements of customers who are outsourcing non-core functions. Our highly regarded H-A Industries, a state-of-the art bar processing facility, provides an extensive range of thermal treating and finishing services. In addition, we offer a comprehensive range of valueadded processing services for plate, sheet, tubing and bar products from many locations throughout our network. Today, A. M. Castle is continuing to expand. Our business has grown in Mexico, Europe and Asia through organic growth and A.M. Castle continues to make targeted acquisitions. To accommodate this accelerated growth in products, services and customer support, we are continuing to expand and strengthen our infrastructure. This work includes improving and enlarging our processing capabilities, broader inventory stocks, investments in systems, and focusing on continuous improvements across the company. Most importantly, A. M. Castle continues to focus on developing the strongest service team in our industry. We are committed to developing our people to ensure that we have the right talent, with the capabilities and experience needed, to provide our customers with best-in-class service and support. Website: www.amcastle.com


JOY GLOBAL INC.

MINING GLOBAL

“We needed to inject some capital to get the two facilities up to a manageable, workable level,” said Wagner. “As we start growing, all those values and opportunities will drive our industrial footprint going forward.” “What we’re doing now is getting everything ready to set the stage for things to come,” said Wagner.

company strives to simplify and automate processes and keep people safe. “One of the things we noticed in our service centers is the potential to eliminate waste and make things more efficient. We wanted to clean that up—rearrange and reorganize— to ensure we are operating as lean as possible. Our goal is to be running as efficiently as we can, Vision for excellence internally and externally.” Joy Global has a clear vision for its Although still in the beginning hard rock business. stage of integrating the new hard The company is currently rolling rock division, Joy Global is already out its Joy Global Business Systems implementing its JBS initiative into (JBS) operational excellence the process. initiative, a program dedicated to ensuring operations in every “One of the things we stand by department run as smooth and today is taking our curriculum and efficient as possible. lessons learned elsewhere at Joy “We’re introducing new practices Global and applying them to part to improve the organization as a of the integration process,” said whole,” said Evelyn Maki, Marketing Wagner. Communication Director for Joy “We want to take this approach Global. “It’s a cultural approach and to our customers and help them run it’s ingrained into our employees on their mines to maximize production, a daily basis.” while achieving zero harm. This Based on a lean philosophy, the essentially feeds into our goal of company is focused on eliminating delivering world-class performance waste and streamlining current and operating at the best level processes. According to Maki, the possible.” w w w. j o y g l o b a l . c o m

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JOY GLOBAL INC.

MINING GLOBAL

Another important component of achieving Joy Global’s vision for the future is its Environmental Health Safety (EHS) program. The company is committed to an incident-free culture and believes that EHS is a key indicator of organizational excellence and sustainability of its business. “Starting the process post-acquisition, we wanted to identify, evaluate and assess our current situation in terms of overall environmental health and safety metrics,” said Wagner. “We started from square one. We implemented our key initiatives with a focus on getting out in front of identifying lead indicators.” According to Wagner, production, quality and EHS are among the most important goals for the company. “We launched our recording field-level risk assessment program about five months ago and it’s already provided 300 lead indicators. It really provides a lot to our employee base and allows them to take a step back and understand all the risk associated with performing their tasks.” In addition, employees perform an array of safety initiatives before starting a job. The most notable is the company’s Safe Start initiative, which takes place before each and every shift and project. The purpose of the initiative is to ensure employees assess their current working situations and engage in discussions of potential hazards for the job. “The program is critical to helping employees from a situational awareness aspect,” Wagner said.

Ted Doheny, President and CEO

Executive Vice President and Chief Financial Officer

w w w. j o y g l o b a l . c o m

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JOY GLOBAL INC.

PRECISION GRINDING FOR THE GLOBAL ECONOMY 1-855-506 TUBE (8823)

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Serv ice, e x perience a nd in v en tory

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WHY CHOOSE US Since 1963, Hendriks Precision has been supplying world-class, specialized turnkey grinding solutions, emergency and maintenance repairs to local to local and international clients. We’ve continued to build upon past success by adding value-added capabilities including CNC turning & milling, Spray Welding and hard chrome plating to augment a world-class line-up of manual and CNC grinding capabilities. 221 Milvan Drive | Toronto, ON | M9L 2A3 | 416-749-0982 | www.hendriksprecisiongrinding.ca

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Large inventory of HFS and CDS Carbon and Alloy Tube, DOM, Honed ID, Chrome Shafting 9 0 5 - 8 7 8 - 9174 w w w. n a t i o n a l t u b e c a n a d a . c o m


MINING GLOBAL

When incidents do occur, Joy Global is quick to address the situation and implement new focus and training courses for employees. “We try and learn from every situation,” said Wagner. “As things pop up, we tailor new programs to address aspects that may have been lacking before.” Wagner added, “We also strive to empower our employees to speak up and record safety hazards. We want our people to be heard and able to voice their opinions in regards to safety.” The next chapter Joy Global’s move into the hard rock sector is part of its evolving focus on markets and service. The company is built on a history of providing high-performance equipment, but its goal is bigger than that: to solve mining’s toughest challenges in a variety of markets through a variety of means. New methods will include a greater reliance on data and automation, to help customers maximize production while keeping people out of harm’s way. Through its established direct service network and smart, connected products, Joy Global is partnering with its customers to adapt quickly to change, reduce downtime and drive results. “We want to enhance our products and services through our JBS op-ex program, and then grow beyond our traditional markets,” Wagner said.

Company Information INDUSTRY

Mining and Metals HEADQUARTERS

100 East Wisconsin Avenue, Milwaukee, Wisconsin, USA, 53202 FOUNDED

1884 EMPLOYEES

15,000 REVENUE

Not Disclosed PRODUCTS/ SERVICES

Mining and Metals

w w w. j o y g l o b a l . c o m

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Penguin Automated Systems Inc. Canadian innovation at its finest The Ontario-based robotics firm is cultivating a new breed of futuristic concepts for mining operations Written by: Robert Spence Produced by: Bobby Meehan


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P E N G U I N A U T O M AT E D S Y S T E M S I N C .

Geospatial Mapping System

S

ituated in one of the largest mining jurisdictions in the world, Penguin Automated Systems Inc. (ASI) is quietly constructing the next chapter in the mining revolution. The Ontario-based tech company—a leading research, development and prototyping firm specializing in custom robotics and automations solutions for underground mining operations—is cultivating a new breed of futuristic concepts for mining: robots. And while the notion of utilizing robots in mining isn’t new, Penguin ASI’s combination of knowledge and 64

June 2015

skilled resources is taking the idea to the next level with cost-effective solutions. With key contracts and new developments in place, the emerging technology company is poised for a breakout year in 2015. New horizons As a leading innovator in the field of robotics and automation, Penguin ASI provides solutions from concept and design to finished commercial products by applying specialty communications. The company’s problem-solving approach includes unique software


MINING GLOBAL

Hangup Assessment and Removal Robotic System

and intelligent systems -- such as distinct electronics, tele-autonomy and mobile mechatronics -- to meet their clients’ needs. The company was awarded a contract with Codelco, Chile’s stateowned copper miner, to develop a robotic solution for clearing hang-ups in block cave mines. Traditionally, miners have used long poles to attach explosive charges to dislodge these stubborn blockages. “We build robotic systems for places where people can’t or shouldn’t go,” said Dr. Greg Baiden, chairman and chief technology officer at Penguin ASI.

Under the guidance of Dr. Baiden, Penguin ASI has developed a customized solution—Hangup Assessment and Removal Robotic System—to remove miners from this extreme and hazardous environment. “When I was working as a mine manager, this is the one job that gave me cold sweats. I was always worried for the employees. Add to the fact that on the third or fourth try people are getting annoyed, you reach the point where your patience is low and that’s where mistakes can happen. The idea is to provide a tool for people who currently do this,” w w w. p e n g u i n a s i . c o m

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added Dr. Baiden. The new robot for Codelco is equipped with a mechanical arm capable of reaching horizontally out 15 ft. , as well as extending vertically as high as 33 ft. into the air over various angles of attack. At the end of the arm is a drill with an explosive system. “Building a robot like this is taking every bit of knowledge of what we know and what our business knows,” said Dr. Baiden. “This is the first time in the world that drilling and blasting is automated.”

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Along with building the robot, Penguin ASI has developed a scanning system which will be utilized as an internal map to give the robot exact coordinates for placing the drill. Operated remotely, the robot will scan boulders to determine the optimal location for a charge to be placed. Using its telescoping arm to drill into the rock, it will then place the explosives into the drilled rock bit and back away while the blast is triggered from afar.


MINING GLOBAL

The new robot, which will carry out this task, is currently being tested at Codelco’s Andina mine. “We are very fortunate to have met a group of highly motivated people in the innovation group at Codelco for this project. We’ve been collaborating with them to develop these innovations for the last four to five years,” said Dr. Baiden. “This robot is the size of a small tank. It weighs close to six tons and has 130 horsepower with a peak out at 540 horsepower.” Entering a new marketplace According to Dr. Baiden, the marketplace is significant for robotics like these. “Last year we did about a half a dozen custom robots for people; some of them for big problems, others were for smaller obstacles such as geospatial mapping.” With the support and financial backing of a number of government agencies, including FedNor and the Northern Ontario Heritage Fund Corporation, Penguin ASI is looking to take these robotic solutions to the next step: manufacturing. “With investments, we want to manufacture roughly 12-15 robots per year. With more investment, we’d like to produce 25-50. We want the ability to produce what the marketplace demands,” explained Dr. Baiden.“I’ve already invested over a million dollars into this process because I believe this whole area of work is gamechanging technology. I believe there’s a real need for robotics like this in the mining sector.”

“In terms of production, the biggest production stoppage for mining companies is rocks blocking the flow of material. We’re innovating ways to surgically remove them, rather than the brute force the industry uses” – Dr. Greg Baiden

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Communications Robot

He added, “We also have a smaller version that will fit into a 24-inch diameter pipe. We’ve been targeting this for multiple applications from underground tunnels to shaft surveying.” Penguin ASI is currently in the beginning stages of integrating an in-house manufacturing facility to assist in the designing, developing and manufacturing of the Hangup Assessment and Removal Robotic System. The company has also developed a unique system to conduct underground mapping and 68

June 2015

reconnaissance in real-time, utilizing the transmission of video, data and voice for control of single or multiple robots and equipment in underground solutions. Using the machines they’ve built, the technology by Penguin ASI can survey an underground mine driving at one or two kilometers an hour, collecting massive amounts of information per second. “The problem with laser mapping is you need a tripod. To do mapping of a shaft, you need many tripod points. With a robot, you hang it off a hoist rope and it does rapid


MINING GLOBAL

mapping, with more data and accuracy,” said Dr. Baiden.“This robot, along with the mapping system, is able to collect 230 points a second and geospatially location them. Typically surveying takes only five points every foot. This is a dramatic difference.” The benefits of robotics The biggest advantage for utilizing robots in mining situations is the safety factor. According to Dr. Baiden, the safety aspect is monumental but the possibility of enhancing productivity is even greater. “In terms of production, the biggest production stoppage for mining companies is rocks blocking the flow of material. We’re innovating ways to surgically remove them, rather than the brute force the industry uses,” said Dr. Baiden. “Now that we have a robot with this kind of reach and the ability to go into places where people can’t go or shouldn’t go, the implications are huge.” Penguin ASI is currently looking to introduce its innovative new robots to the commercial market this year. The company has 20 patents pending approval, with four patents approved. The new innovation is another step in the right direction for not just the Canadian mining sector, but for the mining industry as a whole. “This is a Canadian invention and we’re proud to say that,” concluded Dr. Baiden. Penguin ASI may not be a household name in the mining industry just yet, but their time is coming soon.

Company Information INDUSTRY

Mining Global HEADQUARTERS

1755 Regional Road 55 Naughton, Ontario, Canada, P0M2M0 FOUNDED

2001 EMPLOYEES

50 PRODUCTS/ SERVICES

Mining, Robotic, Telecommunications, Optics, Radio

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Nyrstar Langlois Success is a team effort

Though construction began much earlier, it wasn’t until the Nyrstar team acquired the Langlois mine in 2011 that the northwest QuÊbec property began to reach its full potential. Written by: Cutter Slagle Interviewed by: Robert Spence Produced by: Bobby Meehan


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Pumping station at tailings ponds for reclaim water

T

o anyone who has been paying attention, the Langlois mine has come a long way since initial construction in 1994—and this is clearly due to the involvement of Nyrstar, an integrated mining and metals business with operations throughout the world. In the Beginning . . . It was a rough start for the mine which experienced a number of obstacles throughout the years. After being purchased by Breakwater Resources Ltd. in May 2000, the project actually reached commercial production in July 72

June 2015

of that same year only to have operations suspended a mere 4 months later due to problems that were associated with the main orepress system and low zinc prices. The cost of this hiccup? The call for a complete rework of the mine’s design and overall plan—and a few years’ time. It wasn’t until 2005 that Breakwater once again announced the Langlois mine would officially be developed. Once again, effort, time and countless resources were expended, including extensive engineering, metallurgical testing, re-design work and exploration,


MINING GLOBAL

Precious metal assay in the Assay Lab

and production commenced in late 2006, with commercial production announced in July 2007. Unfortunately, operations were again suspended in November 2008 due to the decline in commodity prices and the general deterioration of the economic outlook globally.

“The success of the Langlois mine is a team result” – Yves Desrosiers, General Manager

Time for a Change Enter Nyrstar. After acquiring the mine in 2011, operations resumed during the first half of 2012—but only after many changes were implemented. The mine was successfully revamped through various stages of rehabilitation, and the mine’s surface infrastructure was greatly improved; however, the greatest change had nothing to do with the structure at all—the entire strategy changed, w w w . n y r s t a r. c o m

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www.pdgindustries.com

Mining • Manufacturing • Modification • Repair Our staff has over thirty years of experience in manufacturing, modification, repair and / or installation of fabricated metals, steel structures and mechanical equipment. We also offer staff hire (welders, mechanic welders, fitters and electricians) for various jobs.

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MINING GLOBAL

as the main motive behind the Langlois mine quickly became the desire to deliver consistent production results while continuing to streamline operating costs. Nrystar’s general manager Yves Desrosiers spoke exclusively with Business Review Canada, and when asked to explain the success of the mine post-purchase, Desrosiers did not hesitate: “It’s mainly strategy. We talked to people, involved them in the process of improvement and kept them included in the process [as it continued].” As the mindset of management began to change, achieving specific goals became a priority—and although earning a profit has always been a top goal, the approach to doing so was also an important factor. “Production goals were put into place that could be achieved with hard work,” Desrosiers explained. “We put the energy into achieving these goals.” In order for these production goals to work, action plans were given to each department. Particularly, the end result or the desired result was given to each department.

“Good employees are the best asset we have” – Yves Desrosiers, General Manager

Maintenance and Recovery Plans When asked about the new maintenance plan, Desrosiers first talked about the triumph of taking the availability for the mining fleet equipment from forty-seven percent up to seventy-eight percent. Then, a program was put into place according w w w . n y r s t a r. c o m

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Precious metal assay in the Assay Lab

to suppliers recommendation on maintenance program of the equipment, followed by a strict rule regarding the maintenance of the equipment. “If we are supposed to do maintenance on Wednesday, it should be on Wednesday,” Desrosiers said. It’s very important for equipment to be taken to maintenance when it’s scheduled to do so—not after. This plan of action has been completely 76

June 2015

organized with the maintenance superintendent so that they are fully aware of all service dates. Furthermore, the five worst pieces of equipment were removed from the fleet, allowing mechanics to focus all efforts on repairing or maintaining only the best pieces of machinery in the fleet. As a result, less time is now needed for maintaining the equipment. With the new maintenance plan intact, along with the hiring of


MINING GLOBAL

“talented and seasoned people,” production has already increased by thirteen percent from last year. Nyrstar has hopes for Langlois to increase production another ten percent this year. Changing the mentality of employees during production has also been accredited to the increase. In short, the staff is able to have fun while working. Specifically, Desrosiers called the turnover rate from twenty-three percent to six percent a “huge improvement.” He also touched upon the importance of communication and implementing field visits. In particular, getting management involved and in the field allows for employees to ask questions. “We’re all in the same game,” he stated. When discussing the new recovery plan, Desrosiers briefly stated how mill operators are now left to do the job in which they were trained to do; operators are trusted to make any necessary changes they see fit. With the assistance of the recovery plan, improvements to the mine are now at ninety-four plus percent. Future investments are now looking to development and exploration. Bringing the conversation full-circle, Desrosiers ended the interview by again touching upon the importance of the Langlois mine’s employees. Reaching heights never imagined a few years ago, the success of the mine has been credited to the hard work of the staff: “The success of the Langlois mine is a team result,” Desrosiers concluded.

Company Information INDUSTRY

Mining Global HEADQUARTERS

Route 1000, Km. 42 C.P. 6000 Lebel-sur-Quévillon Québec J0Y 1X0 Canada YEAR ACQUIRED

2011 EMPLOYEES

265 REVENUE

Not Disclosed PRODUCTS/ SERVICES

Mining and Metals

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Profile for Mining Global

Mining Global Magazine - June 2015  

Mining Global Magazine - June 2015  

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