Mining Global magazine - October 2016

Ausdrill transforming a mining supply chain ATLAS COPCO Q+A on sustainabilty Metalysis changing the future of metal production

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EDITORS COMMENT

Spinning off into success H E L L O A N D W E L C O M E T O the

October edition of Mining Global!

Our cover feature looks at how a values based approach Keeps HSE Mining on top.

We also profile, Ausdrill and how an ITdriven end to end supply chain transformation has allowed the company to grow.

In this month’s issue we take a look at how one start-up business in the industrial centre of the UK plans to disrupt the metallurgical process with its innovative, game changing Metalysis process.

Sticking with start-ups, we speak with Mark Bennett of S2 Resources – the exploration company born out of the hugely successful Sirius Resources. Mark talks the secret to success, with community engagement, a strong backbone of motivated workers, and a bit of Australian charm.

In an increasingly competitive industry, how important is sustainable productivity?

Find out in our exclusive Q&A Vice President of Atlas Copco’s Portable Energy Division Paul Humphreys Mining Global magazine – let us know your feedback @MiningGlobal

Enjoy the issue!

Dale Benton Editor dale.benton@bizclikmedia.com

3

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APT, bringing projects online in lean times More than ever before the hurdles necessary to bring a new project on line, or to expand an existing one are daunting. Listed Juniors deserve a medal for their efforts and a good deal of recognition is owed for the often thankless task.

There are many boxes to be checked, one of which is the plant; its design, its cost and the efficacy of the result. Nothing endorses a project more firmly to its investors than production on schedule, or even ahead of schedule.

proven capability to a larger plant size. Our latest plant, at 120tph capacity is in fact a Combo Plant and clearly demonstrates APT’s specialist knowledge in this field. Large engineering companies frequently encounter difficulty designing their products downwards, it is not as easy as it sounds. APT on the other hand has had no trouble engineering upwards and we come from a broad base of experience of over eighty plants to grow from.

Ultra-fast lead times APT realizes this and our plants have been brought into production for small to medium mines at literally break neck speed. For example, a 20tph gold plant was recently designed and built in just 14 weeks. It was then shipped to site and once there was erected, commissioned and in production in just 4 days!

In another case a large 40tph gravity tower for gold recovery was erected on site in just 6 days! Through rigorous R&D our designs have been evolved to allow for a single plant that can treat the softer upper oxide material and then accommodate more competent rock from the transition and deeper levels. Called Combo Plants, these units can accept up to 50% of the feed tonnage as hard competent rock and are ideal for a startup. Modules can be added as necessary to tailor the plant progressively to a deep level unit, for example by the addition of flotation and cyanidation.

Scheematic of 120tph APT Combo plant for cassiterite recovery Exploration with production The ability now exists for a Junior Mining House or a private investor to bring a project on line at reasonable cost ahead of schedule whilst reserves are expanded to justify further investment. APT would be involved throughout the entire process from testwork through to implementation of the final modules as the project matures.

This can all be designed from the outset for ease of forecasting and financial planning.

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40tph Gravity Tower and CIL plant Modules allow progressive expansion The breakthrough for the Juniors is that APT have progressively expanded this tried and

In addition to the flexibility of the solution and it’s rapid startup, the value package is enhanced further by very competitive pricing – often a fraction of that paid for a conventional plant.

“The reason is simple”, said Gary McFarlane, APT’s Business Development Manager. “We spend a large proportion of our engineering effort to de-complicate and unclutter our solutions so that what the client gets is a smart, robust product without bloat and waste.”

CONTENTS

F E AT U R E S

08 PROFILE

Spinning off

of success

TECHNOLOGY

16 6

Disrupting the metals production industry

October 2016

LIST

22

Q&A with Atlas Copco’s Portable Energy Division

C O M PA N Y P R O F I L ES

30 Ausdrill Australia

46 HSE Mining Australia

PROFILE

Spinning off

of success

S2 Resources, the mineral exploration company born out of Sirius Resources, is making waves in the Australian, Finish and Swedish mineral exploration market. We speak with the CEO Mark Bennett on the company’s successes, challenges, and aspirations for the future Writ ten by: DALE BE NTON

PROFILE

IF YOU ASKED anyone across the industry what are the chances of an exploration company starting up, controlling operations in Australia, Sweden and Finland, and announcing a market cap of over $100 million all without having to get equity funding, they’d probably say in this day and age it’s either unheard of, or extremely lucky.

Step forward Australian mineral exploration company S2 Resources.

But to talk about S2 we need to address Sirius Resources. Sirius Resources is a hugely successful exploration company that discovered the Nova Project, the most substantial nickel discovery in Australia in over 20 years. This attracted the attention of Independence Group (IGO) who bought out Sirius Resources for $1.8 billion. From this, CEO of Sirius Mark Bennet structured a deal that would see the birth of S2, a spin-off of Sirius.

“S2 is taking the exploration assets from Sirius, other than Nova, and putting them into the new vehicle. I could choose who I wanted from Sirius to come with me too, so I’ve got people with strong

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October 2016

experience working with me here,” says Mark Bennett, Managing Director & CEO of S2 Resources.

S2, like its predecessor Sirius, is an explorer with the purpose of making significant discoveries to bring order of magnitude returns to its investors – primarily in precious and base metals gold, copper, nickel and zinc.

“Exploration is an inherently tricky business and the statistics are against you. But our exploration is in sensible places so the risk is sensible as well,” he says.

That risk has been rewarded, as S2 listed on the ASX in October 2015, only the third company to do so that year. The company managed to list without having to go to market to raise money, as part of the deal with IGO saw the company invest $22 million in funding to get the company off the ground and running.

“We started off life with a good team, some good ground and money in the bank. This was just under a year ago. The price was 17 percent when we started with $35 million. As of this year we have moved to 46.4 percent with a market cap of over 100 million.”

SPINNING OFF OF SUCCESS

11

PROFILE

One of the key attributes to the success of S2 is that it hasn’t had to face many of the challenges that other mineral exploration companies face, namely funding, getting good people to push the company forward and external factors – such as commodity prices.

“Unlike 99 percent of the industry we’ve been in a good spot. Being an explorer, the value we can create is in the discovery itself rather than the mining of a particular commodity.

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October 2016

We are decoupled of the day to day variation and speculation of commodity prices that impacts a producer,” says Bennett.

A recent example of this decoupling happened recently, as Bennett recalls: “A number of gold companies were hit because gold price dropped,” “But we, in the same time, actually announced a gold discovery and our share price went up 42 percent on the first day and 10 percent again on the second day. It’s the

SPINNING OFF OF SUCCESS

leverage in the discovery rather than the commodity price, and that was a good demonstration of that.”

A particular problem that is rather unique to S2 is the lack of a revenue stream from an operation.

“As far as making that go as far as possible we need to be able to demonstrate to those in the market that are entrusting us with that money that we are spending it wisely. We look after every cent where we can. If you’re a mining company right now, the number of commodity prices have been weak for a while now and most companies in production here right now are doing their utmost to cut costs in every possible way.”

S2 operates in Australia, Sweden and Finland but the company originally started out with just the Australian assets from Sirius. In April this year, S2 announced that it had discovered the Monsoon project, which Bennet describes as a promising prospect.

This comes off the back of further success in Northern Sweden, where a new exploration was laid out with 60 targets, and in the very first drill hole S2 discovered a zinc deposit. Again,

Bennett stresses that it is early days but it signals a promising prospect moving forward for the company.

For any exploration company, community engagement is pivotal. Get it right and successful operations can follow, get it wrong and you’ll never know.

“The beauty of being a small company is you can engage directly.

It makes a huge difference with local people. Compare that with a big corporate company where it’s a line managers job to do that – people see that as not being taken seriously as it not the big chief talking to them,” says Bennett.

Bennett is a firm believer of this level of engagement, stating that it is important to provide sustainable options for the future, such as jobs, training and education, as opposed to simply a financial gain.

“It’s important you develop good relationships with those on the ground very quickly. That’s one of the reason why having people who have been working for years and experience of working in these areas is extremely important. It’s basically just simple

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PROFILE

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SPINNING OFF OF SUCCESS

“We’ve got certain achievements we want to better. At Sirius we were the best performing company on the ASX” – Mark Bennett, Managing Director & CEO of S2 Resources.

face to face human contact and common sense and respect that assists with that. We don’t need any sustainability programs; we just want people who work with other people.”

As with any mining company, mineral exploration and the environmental impacts it brings go hand in hand. Bennett and S2 are of the viewpoint that care for the environment and mining are not necessarily opposing things.

“If you avoid areas that shouldn’t be mined, then you’re not going to create a problem. In terms of where you do mine if you plan and execute it in a sensible manner the it is very sustainable in terms of environmental values,” he says.

Looking to the future, Bennett and

S2 Resources have set themselves key goals. To become a company with a billion-dollar market capital with a good cash flow to sustain an ongoing exploration process.

Bennett does admit however, that some of those targets involve topping the success he and his team had as part of Sirius Resources.

“We’ve got certain achievements we want to better. At Sirius we were the best performing company on the ASX. The record of the shortest time of discovery to production.

Shortest time of getting a mining lease granted, getting a native title deal. We were pretty good in terms of shareholder return which was up to 10,000 percent for some people.

Because it’s what we do we want to do it better this time,” he says.

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DISRUPTING the

metals production industry Writ ten by: DALE BENTON

How is Metalysis, a UK based start-up company, disrupting the metals production industry in a clean, sustainable and cost effective way?

TECHNOLOGY

METALYSIS IS TRANSFORMING the metals production industry through its patented disruptive technology. The company could truly change the way the world produces metals, alloys and even rare earth metals in the future.

Metalysis is a clean, green technology with the potential to substantially lower the cost of metals production across a vast multibillion dollar market.

In short, the Metalysis process to

simplify the metal powder production while reducing costs. This is achieved through the metal remaining in a solid state with zero melting taking place – the powder is produced directly from the metal oxide. The environmental benefits come from significantly lower CO2 emissions due to the use of calcium chloride which contains the toxicity of “table” salt, and is recyclable for re use.

“The lightbulb moment occurred at Cambridge University over 10 years ago,” says Dion Vaughan, CEO of Metalysis.

“Many oxides and beneficiated 17

TECHNOLOGY ores could be reduced directly to metal powders in an electro chemical process. It was a very important discovery in a scientific sense.”

In the decade that has followed, Metalysis has been developing this discovery and process into a full-scale industrial process with a business case.

“We’re at the rapid point of commercialisation, as we are in the process of developing key partnerships to help push the company forward,” says Vaughan.

Vaughan believes that the USP of

Metalysis is the fact that the process does not melt anything. Through Metalysis, metals production is done through solid state – the component changes on the inside but it does not melt. The process operates around 800 degrees Celsius which is significantly lower than the usual 1500 degrees Celsius and above used in larger companies.

“The amount of energy that is used in creating the same end product is significantly less. We are using less energy and operating

“In simple terms, Metalysis produces a metal powder directly and it collapses the number of processing steps compared to Kroll, which only produces a semi-finished product. Our process is cheaper, more sustainable and produces an end product far more quickly” – DION VAUGHAN, CEO of Metalysis

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October 2016

D I S R U P T I N G T H E M E TA L S P R O D U C T I O N I N D U S T R Y

with a substantially lower output of carbon dioxide,” says Vaughan.

The process also doesn’t use any other chemicals, whereas large scale mining companies may use strong acids in the process, presenting environmental concern.

“The major inputs to our process are electricity and carbon gas, using ceramic consumables and calcium chloride - none of which is environmentally detrimental.

Metalysis can produce high value mass market materials much more quickly and with the key benefits of an improved sustainability.”

Metalysis has its clear business case and Vaughan admits that the small company based in the UK plans to become a globally dominant company in the field of solid state metal processing.

“We are a technology company, the way to create value is to valorise our intellectual property through partnerships and licences. The way we move forward is ventures into partnerships and joint ventures into sales of our intellectual properties through those licences,” says Vaughan.

It is through partnerships that the company can become a globally dominant metal processing company.

Two key partnerships have been with Iluka Resources, the second largest producer of global titanium dioxide products in the world and global giant BHP Billiton.

“The involvement of very large branded business evidences the potential of our story, so that’s a big plus in investment terms,” says Vaughan.

“Perhaps equally important is that they have elements of engineering and commercial skills which are synergistic with what we are doing.

If a story like ours is as good as we believe it to be then the big companies should be investing and the good news is – they are.”

Through the partnership with Iluka, Metalysis seeks to remove the total number of processing steps in getting a beach sand resource to a value added product that can be used in an engineering environment.

“A process like ours can add considerable value. By implication, whether its logistically or technically, a process like ours can add considerable value. If you’re doing more with less than the process becomes inherently more sustainably and this is attractive to a business because you’re saving money.”

One method of removing those 19

TECHNOLOGY industrial processes is through Metalysis’ answer to the Kroll Process.

The Kroll process is a widely used industrial process to produce metallic titanium that has been used since the 1950s and is extremely expensive and very intensive of energy and time.

“In simple terms, Metalysis produces a metal powder directly and it collapses the number of processing steps compared to Kroll, which only produces a semi-finished product. Our process is cheaper, more sustainable and produces an end product far more quickly,” says Vaughan.

Moving forward, for Metalysis to attract new partnerships and investment, it is important that large companies are clear what the business case for the company is.

“The first thing is that we offer a low cost route to producing value added metal products, which of course is

extremely interesting to many large players. We are strategically focused on titanium and the production of titanium powder – IIuka resources is the second largest titanium producer so it’s clear where the synergies are there,” he says.

“For the foreseeable procedure, low cost production is the key driving force of engagement for strategic partners.

Looking further than that, a process like ours which can operate across the periodic table and put together alloys and combinations of elements that have yet to be produced potentially will create new opportunity areas and change demand patterns for elements and resources that people are just about getting their heads around. Cost reduction of things we know today and things that are new that may drive different forces of demand is the

“Where we are based in the UK has a history of innovation in steel making and people are always looking for the next big innovation and believe me, Metalysis will be the next one” – DION VAUGHAN, CEO of Metalysis

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October 2016

D I S R U P T I N G T H E M E TA L S P R O D U C T I O N I N D U S T R Y

next stage of the Metalysis journey.”

Metalysis is primarily a technology company and technology over the last two decades has become more and more of a major discussion point across all industries. Vaughan believes that this newfound emphasis on technology and innovation, plays directly into Metalysis’ hands.

“Technology didn’t really play the primary role in thinking at the top of resource companies traditionally. In recent years, big and small resource companies are looking more carefully

at what technology can do to shift their businesses. Technology is far more at the top of corporate decisions than it was when Metalysis first started out and I think that can only be described as a positive thing.” He says.

“In the not too distant future it’s not hard to imagine boxes like Metalysis which could produce metal powders directly from feed stocks being operated and manned by robots.

This is a trend you can already see, particularly with increased automation within the mining industry,” Metalysis, despite already taking large steps in disrupting the metals production industry, is still in its infancy, but Vaughan promises that this is not the last we will hear.

“Metalysis can be one of the great stories of metallurgical process, we haven’t had the chance to show it yet, but we will. Where we are based in the UK has a history of innovation in steel making and people are always looking for the next big innovation and believe me, Metalysis will be the next one.

“The metals process and industry in the UK is in a dire straight and we believe that we are a great success story to come out of the industry. We are a company that’s going places.”

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Q&A

Q&A with Atlas Copco’s Portable Energy Division

We speak with Paul Humphreys, Vice President of Communications Atlas Copco’s Portable Energy Division about how sustainable productivity is essential for the industry in becoming increasingly competitive Writ ten by: DALE BE NTON

Q&A

“Creating customer value is all about anticipating and exceeding their future needs – while never compromising our environmental principles” – Paul Humphreys 24

October 2016

Q & A W I T H AT L A S C O P C O ’ S P O R TA B L E E N E R G Y D I V I S I O N

What is Atlas Copco’s commitment to ‘sustainable productivity’?

Within Atlas Copco we stand by our responsibilities towards our customers, towards the environment and the people around us. We strive for performance levels that stand the test of time. This is what we call sustainable productivity For Atlas Copco’s Portable Energy division, which provides generators, compressors, light towers and pumps to the mining industry, this transfers to our forward-thinking approach.

Creating customer value is all about anticipating and exceeding their future needs – while never compromising our environmental principles. Looking ahead and staying ahead is the only way we can ensure we are a longterm partner for our customers.

How does that affect the mining sector in practical terms?

Reliability is of utmost importance in this industry. Mining can involve a complicated set of applications that require very high standards in terms of safety, productivity and sustainability. Therefore, equipment needs to be robust, dependable

and safe. However, sustainable productivity is also vital as the industry is becoming increasingly competitive. Atlas Copco meets all of these criteria. Stemming from our close relationship with the mining industry, which stretches back over 100 years, we have learned a great deal about the design, construction and support of our equipment onsite. Today all of our generators, light towers, compressors and pumps are engineered for these stringent demands, often in harsh climates.

Mining is diverse. The requirements of the products will depend largely on whether a customer is working below ground or above ground.

When working below ground, highly stringent safety regulations need to be borne in mind. Electrical equipment is often used to eliminate the need for transporting and transferring high volumes of fuel in sensitive areas. Often, the equipment is used in a semi-permanent manner. Being in place for considerable periods means portability is less important but longer service intervals are a necessity. To give an example of how portable energy equipment is used below ground, a compressor can be 25

Q&A deployed as a universal power source but would often be specifically used for drilling smaller holes into which explosives are placed for clearing.

Working above ground, compressors would be much larger due to the need to drill much wider holes at depths of over 100 metres.

These compressors are typically reliant upon diesel due to the difficulties in accessing any other power source in remote mining locations. Despite the size of these compressors, it is still very important that they

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can be easily transported between sites. A compressor used for drilling applications should fit on the same truck as the drill mechanism.

Examples?

Two examples of ‘sustainable productivity’ in action can be found in compressors for exploration drilling and also in light towers.

Q & A W I T H AT L A S C O P C O ’ S P O R TA B L E E N E R G Y D I V I S I O N

1) Compressors In exploration drilling, it is vital to select the right compressor for the particular job, so that performance, rate of completion and energy efficiency can be optimised. The most important

factors to consider are the depth and diameter of the hole that needs to be drilled. After these two parameters have been determined, we can begin to match the requirements to the correct product.

In simple terms, drills with large hammers creating deep holes, will need a more powerful compressor than a drill with a smaller hammer creating a

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Q&A smaller hole. In many applications, you could choose from multiple products to complete the task, but the important point is to determine which compressor can do this in the most efficient way.

Atlas Copco is developing a full range of compressors known as the DrillAir range, specifically designed to cover a multitude of drilling applications. The DrillAir range is built scientifically around the principals of pressure and flow. The focus of the design is the relationship between these two variables and for the compressor to find the right combination for the application. This improves the efficiency aspects of time spent on the job and fuel consumed. With the DrillAir range, it

BENEFITS OF DRILLAIR Y35 • More compact, with faster and more efficient drilling.

• 478 kW, Stage IV-compliant Scania engine, perfect for sustainable drilling.

• DrillAirXpert allows for precise regulation of the air-flow rate.

• Dynamic Flow Boost means the drill stem

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October 2016

can be filled faster, increasing efficiency.

• Pressure range of 15–35 bar, enabling drilling teams to complete two 250-meter, 4.5-inch geothermal wells per day.

• Predictable repair and maintenance costs. The standard warranty covers parts within two years or 4 000 hours.

Q & A W I T H AT L A S C O P C O ’ S P O R TA B L E E N E R G Y D I V I S I O N

is possible to achieve the maximum air flow at any pressure setting.

2) Light towers We strongly believe LED will be the ‘normal’ light source in all regions of the world. It’s a lighting source that is better for your business and better for the environment too.

The way we have looked at and approached LED technology is a good example of why Atlas Copco, in 2016, was recognised as the world’s most sustainable machinery company by the prestigious annual Global 100 list. This is the tenth time we have appeared on this list.

With our HiLight range, we have invested time, effort and capital in developing a solution that goes above and beyond satisfying our customers’ expectations. A weakness in some of the current LED offerings on the market is the low light coverage.

Our belief in improving technology drove us to do a deep analysis of this technology. It took just about two years to design and perfect our vision.

What is Atlas Copco’s outlook on the mining industry?

Mining has had a tough time over

the last several years, largely driven by weaker commodity prices and demand. It’s a huge business and very diverse, so certain segments have been affected more severely than others. However, mining is, by definition, a cyclical business.

As supply dries up and demand continues to grow, investment will be needed in the future. Many of the minerals mined are so important to everything we do in life and we feel the consumption of such materials will only increase.

We definitely will see a recovery in the sector although maybe not as rapid as the growth that has occurred previously. We also see that the requirements of the industry have shifted to some extent, with any different factors becoming more important, such as sustainability and productivity.

How important will ‘sustainable productivity’ be to the future of the mining industry?

The terms sustainability and competiveness go hand-in hand. We believe that you simply cannot have one without the other. The mining industry shares this approach.

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TRANSFORMING A MINING SUPPLY CHAIN Ausdrill has taken advantage of the downturn in mining, taking the opportunity to grow a culture of innovation and lean thinking: this has partly been achieved through an IT-driven, end-to-end transformation in its supply chain Written by John O’Hanlon Produced by Glen White

AUSDRILL

F

ounded in 1987 by Ron Sayers with just a single drill rig at Kalgoorlie, Ausdrill has grown to become one of Australia’s top 200 companies, listed on the ASX and counting the major mining companies including AngloGold, BHP Billiton, Barrick, Gold Fields and Newmont in its client list. Its rapid growth has been achieved mainly by acquisition, and today the group embraces 19 businesses located across Australia as well as major interests in Africa including a half share, with Barminco, in African Underground Mining Services (AUMS).

Ausdrill has been affected in common with the entire mining services sector by the retrenchment in exploration and production following the recent slump in commodity prices.

Though Africa has bounced back and Australian gold prices have firmed this year sparking renewed activity, in all its markets Ausdrill is facing greater competition. As Group Contracts and Procurement Manager Ashley Carey puts it, smaller players are desperate for any work to keep them going and

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October 2016

are creating a price environment that, though unsustainable, skews the market in the short term.

Carey and his colleague, financial controller Renée Harrold, have taken a lead role in easing the company through some very difficult times and refining its procurement processes and culture to a point where it can take full advantage of the upturn that can’t fail to materialise in this notoriously cyclical business. As Carey says: “The downturn has been a blessing in disguise: it has brought the supply chain to the top of the agenda. Without the downturn we may not have had the traction to drive the changes we’ve made over the last two years. Bad times breed good businesses and that is very true in our case.”

A case for refinement With plenty of work around, and the highest standards of customer service, there had not been the incentive to introduce what might be called joined-up thinking. There was very little communication between the businesses in the group, and

MINING

Ron Sayers

Managing Director w w w. a u s d r i l l . c o m . a u

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AUSDRILL

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October 2016

MINING

“Without the downturn we may not have had the traction to drive the changes we’ve made over the last two years” – Ashley Carey, Group Procurement Manager

Ashley Carey Group Procurement Manager Since 2010, Ashley Carey has led procurement at the Ausdrill Group and overseas all procurement related activities, direct materials purchasing as well as sourced products and services. Ashley started out as a hydraulic engineer, working primarily in the agricultural and mining industries where he was picked up by Ausdrill to focus on cost reductions in all technical categories. In a short time Ashley had worked his way through the organisation and now sits as the head of procurement for the group which has operations in 8 countries around the world. Ashley has overseen a dramatic transformation within the Ausdrill procurement function driven primarily by the most dramatic mining industry downturn in a generation. The transformation includes the implementation of a best of breed procure to pay system, moving toward a fully centralised procurement function, large scale operational cost reductions and the completion of a comprehensive supplier rationalisation project.

Ausdrill is now well positioned as an industry leader on many fronts in the procurement space and with an upturn imminent can take full advantage of its new structure.

when it came to procurement, every one of some 58 individuals scattered across Australia was entirely focused on his or her own cohort of users and suppliers. The supply chain function was entirely process driven: suppliers may have been taking advantage of that segregation and charging higher prices, and service levels were not as good as they might have been. “Our first task was to understand what we were spending money on, and look at the total global spend of the group,” he says.

Not surprisingly this exercise delivered sizeable savings. It also highlighted that suppliers were not always realising the spend level they anticipated. Capturing procurement data across the group began to give insight into the supplier community.

w w w. a u s d r i l l . c o m . a u

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AUSDRILL

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October 2016

MINING

“Coupa is probably the most cost effective software available on the market … it is a cloud based solution that works” – Renée Harrold, Financial Controller But the first thing to tackle was the group-wide structure. “We started on a three and a half year project to centralise procurement,” Carey says.

“We built a communication channel through a basic SharePoint based requisitioning system, and rolled that out in a small group of companies, reducing their procurement workforce

Renée Harrold Financial Controller Renée is a CPA qualified Accountant currently based in Perth, Western Australia. Having completed a degree in Accounting and Finance at Edith Cowan University she works extensively in Western Australia and throughout West Africa in the Mining Services sector. Renée takes a hands on approach when developing operational focussed financial solutions in the mining & energy services sector.

from eight to two. It was the start of something big for Ausdrill.”

This was a key moment because it enabled his team to convince the board, generally conservative in attitude, of the enormous savings potential of IT – he identifies this as the point where innovation tailored to the business, as opposed to taking the cue from its large mining clients, started to be accepted as a strategy that could be applied across the group.

Coupling with Coupa After 42 months, Ausdrill had a centralised procurement function, administered by thirteen people, four in Kalgoorlie, one in Queensland and eight in Perth. The workload is w w w. a u s d r i l l . c o m . a u

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MINING

AUD

$744 Million no lighter than when 58 people were needed to handle it, despite the market downturn he points out. The quest for technology-based solution was clearly essential, though arriving at the right one took some effort. The industry has a number of incumbent solutions including Ariba, Quadrem and Basware – Ashley Carey and the team embarked on a two year project to identify the best partner for Ausdrill, visiting government, private, finance sector and of course mining users to analyse exactly how these solutions integrated with their core systems and how easy they were to use. In the end, it was a bold decision to pioneer a system that had not previously been adopted by any Australian company.

There was a risk to choosing a cloudbased solution when Ausdrill’s existing Pronto ERP system had not been asked to integrate with any external

Ausdrill annual revenue (12 months to 30 June 2016)

software, but in the end the US based Coupa ‘value-as-a-service’ platform ticked all the boxes including scalability, flexibility, ease of use and return on investment. “Coupa is probably the most cost effective software available on the market,” says Renée Harrold. “Since we adopted Coupa, more of the majors in Australia are looking at it. It is a cloud based solution that works.” She and Carey have been jointly project managing the phased implementation and have found it infinitely adaptable.

It delivers on the original requirements – for example it took only 18 months to roll out to some 1,300 users in 18 diverse businesses, and since it takes up little bandwidth it’s ideal for field use over tablets and handheld devices – but like a mining resource ‘open at depth’ it can be expanded by its users.

Phased implementation helped

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AUSDRILL

the businesses to digest the new programme gradually agrees Ashley Carey. “We introduced electronic requisitioning through from a request to a purchase order. The actual receipting of goods was still

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happening in our Pronto ERP and we simply matched that back in to Coupa so we didn’t have to train any of our stores people on how to receipt. On the supplier side, we tried it out in a couple of larger businesses, so about

MINING

“We tell them that you can search like you do on Google and buy like you do on eBay” – Renée Harrold, Financial Controller

70 percent of the invoices for these two subsidiaries are now loaded direct by their suppliers. Part of the vendor optimisation programme we are embarking on now will look at how to integrate their systems with ours so

it takes out more manual handling.”

Training was relatively straightforward, continues Renée Harrold. “Ashley and I conducted one hour sessions in rooms around Australia. We showed the team the procure-to-pay picture

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and how Coupa sat in that picture. is not limited by geography by We then presented some examples helping other Coupa users around relating to the people we were training the globe. “It’s almost like a crowd – for example with workshop fitters sourcing platform,” says Harrold we would focus on the types of parts who represented Ausdrill at the San they work with. We set up a Coupa Francisco Coupa Inspire event. “Users blog and discussion forum on our can log on and download features that intranet where people could find a they like and find useful. They can get one page ‘how to’ guide, print it into the community and influence out and put it on the wall. its future - that is how it has That was enough to get developed, by being led them started using by the users rather the system. We tell than presented as a them that you can centrally prescribed search like you do package.” on Google and buy The investment Number of like you do on eBay.” decision has been employees at vindicated, adds Carey.

Ausdrill Innovation allowed “The Coupa overlay Coupa users are Coupa has been the bedrock of our developers, a fact quickly picked transformation, allowing us to refine up at Ausdrill, which won a Coupa and automate our processes. Our Innovation Award in May this year for target is 70 percent automation of the the way it has rolled out the system procurement processes, and that will and pushed out its boundaries. One only need four full time procurement of Ausdrill’s systems administrators officers, balanced by a few more James Bargerbos was declared people in the group dedicated to Coupa Community Champion for contract management and cost demonstrating that community optimisation. That is the next step in

3,800

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AUSDRILL making this a truly lean company.”

Attention has now turned to a vendor optimisation programme. Here the target is to knock a nought off the current 4,000 strong vendor base, with 80 percent of the spend focused in between 50 and 80 key partners.

“We are taking this journey hand in hand with these vendors because we want them to reap the benefits of cutting out manual processes and communicating effectively over systems that talk to one another.

Our vision is to be able to transact seamlessly with these partners, with minimal human intervention.”

The supplier community needed some convincing to get them on board. Carey and Harrold travelled the length and breadth of Australia

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with a roadshow at which every vendor had the opportunity to learn at a face to face session and have their questions answered. Some reluctance was to be expected.

Suppliers often have to pay fees to access client systems, and even have a percentage of each invoice passed to them. With that in mind, Coupa is free to Ausdrill’s vendors.

Ausdrill has become a more dynamic company at all levels.

It is more competitive. This is a business on a never-ending quest for improvement. By the end of this year all the Australian businesses should be equipped with the hardware they need to move out of paper-based requisitioning and getting used to completing a purchase in minutes

MINING

instead of hours. In 2017 Carey wants to see Coupa rolled out to the African business, something that will present a new set of issues to integrate it with the Pulse ERP used there.

The system has already paid for itself, but Harrold and Carey are hungry to see it do much more. “As a global company, we need a global procurement programme.” Coupa is delivering value in ways not foreseen when the decision was made to invest in it. The data from the field is already making management information and schematics available across Australia, and further innovation in in sight. For example, in the near future Ausdrill’s field staff will be able to order purchases directly from exploded diagrams – meaning a part can be

ordered at a touch with no form filling.

Coupa is just a tool, but it is one that has given all its users the ability to proactively pare down cost, save time and make processes leaner and more dependable. They will have to get used to taking more control over the outcomes of their work, but that change is gathering traction, says Ashley Carey. “Other contractors in Australia are looking at what we are doing and taking notice. The more people we can get behind us the more we can push the tool to do more things. I have no issues making the mistakes and overcoming them because I am convinced that will help us stay ahead of our competitors.”

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Values-based approach keeps HSE Mining on top Written by Sarah Megginson Produced by David Kulowitch

HSE MINING

“We’re preparing ourselves to be absolutely match fit, for when new opportunities come along and conditions improve” – Allan Fidock, Managing Director

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MINING

Key People Allan Fidock

A leading provider of large-scale mining solutions to Australia’s major resources companies, HSE Mining has embarked on a continuous improvement program that has seen it emerge as a flexible, safe, lean and client-responsive company

Managing Director Allan has worked at HSE Mining since 2014 and as the Managing Director, leads and oversees the entire business including financial management, strategic planning and operational control. His key responsibilities are: • Driving the organisational strategy and values, with improving safety of fundamental importance

HSE

Mining is known for its expertise in providing prestripping and mining services in coal, iron ore, copper, zinc, nickel and gold mining. It also owns and operates significant fleets of ultra-class and ancillary equipment.

In the last two years, the company’s focus on improving every aspect of the way it does business has been its strongest asset.

As a mining services operator that provides everything from supply equipment to human capital to maintenance, HSE Mining is a small but agile player in the mining industry, which gifts it the ability to be flexible and responsive in line with clients’ requirements.

This unique point of difference has allowed the company to “emerge a stronger and fitter company after what has been a pretty

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• Building long term relationships with clients to establish HSE Mining as a trusted partner • Identifying and isolating key business issues and developing these to realise strategic improvements with demonstrable outcomes • Actively contribuing to the communities in which its employees live and work With over 35 years’ industry experience, including committee appointments as a board member of Australian Coal Industry Research Ltd and Queensland Resources Council, Allan provides the company with significant knowledge of operating mines of a substantial output.

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MINING

tough 18-24 months in the resources sector,” says Managing Director Allan Fidock.

Fidock, who has worked in the mining industry since 1980, began his career with HSE Mining in August 2014, first as General Manager of Mining Services and then as Managing Director.

“We pride ourselves on our nimbleness to accommodate our clients’ requirements. We aim to provide the right solution they require, whether it’s the supply of equipment, expertise or a total service provision solution, so we are flexible in our approach,” he explains.

“Recently, like all of our clients and competitors, market conditions have forced us to relentlessly drive improvements in our operations. There were a number of areas where we could see we could substantially improve.”

“The first area of focus was improving our safety performance. I am pleased we have made substantial improvements in lead and lag indicators, which I believe are now industry leading. This result is a credit to our employees who benefit from a workplace where incidents are uncommon and they can finish their work days without injury.

During the past two years we’ve spent considerable effort embedding safety as part of our day-to-day operations, because we understand that safety excellence equals operational excellence. Safe operations are essential to attract and keep the

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Key People

Paul Gold Finance Director Paul has worked at HSE Mining since 2014 and is responsible for the Finance function. He is a commercially focused CFO who has developed a disciplined approach to his work. A clear understanding of good business practices including timely reporting, strong project management disciplines, a focus on quality, risk and stakeholder management. His key responsibilities are: • commercial management • strategic planning • management and financial reporting • budgeting, planning & forecasting • risk management • company secretarial and legal • board and executive reporting • procurement • interest in business process improvement with a systems focus Paul has been with the Swire group for over six years and has over 25 years’ professional experience.

“We needed to have more assurance around our procurement, both in terms of ensuring we’re getting right quality for the best price … and also ensuring a consistency and timeliness of supply and managing our risk” – Allan Fidock, Managing Director

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MINING

best employees and for customers to consider you for contracts.”

“Outside of safety, our improvement program has focused on improving processes to maximise efficiencies, reduce costs and increase productivity.”

HSE Mining has focused on four key areas: inventory management,

strategic procurement, maintenance cost management and data capture.

At the outset, there was only one way to tackle inventory management, Fidock explains, and that was to strip back to basics.

“We analysed item by item what we had on hand, what we were ordering and if we were using the

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HSE MINING

Year founded

1999 parts we were ordering. The goal was to understand what stock we have in place across half a dozen sites, so we could implement an easily repeatable process to improve our inventory program,” he says.

“Now we’re systemising that process across our sites, so we’ll

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have a standard approach.”

In taking count of inventory across various sites, “there were a few surprises”, Fidock admits. For instance, he found that they had more stock than they expected, in terms of both quantity and value.

“It’s been a very valuable process,

Key People

MINING

Chris Elston Executive General Manager People and Culture Chris has worked at HSE Mining since 2014 and is responsible for the People and Culture function including strategic advice and operational support to the National Leadership Team/Senior Site Leadership teams on the full continuum of HR practices. His key responsibilities are: • Development of a strategic People and Culture plan that includes as sub sets, a Workforce Plan, Learning and Development Plan and an Internal Communication Plan • Close collaboration with the Managing Director to develop and implement a restructure of the Leadership Team in order to position the company to meet future business challenges

as we’ve been able to fully understand the breadth of assets we have at each of the different locations where we have contracts. For our customers, this means faster, leaner asset maintenance as we can source a part from another site rather than having to order immediately from the supplier,” he continues.

After this process concluded, the next step was a more strategic procurement program, a part of the

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• Undertaking a cultural transformation to evolve into a contemporary organisation underpinned by a strong values set • Developed and implementing a reengineering of labour rates With over 30 years HR experience, Chris has a strong focus on driving high performance capability across the business and building talent strategies.

Chris leverages networks across HSE Mining and with external stakeholders to build alignment and ensure that company values are maintained.

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MINING

business that HSE Mining “hasn’t had as a capability up until now”.

“We felt we needed more assurance around our procurement, both in terms of ensuring we’re getting the right quality for the best price for the parts and materials we procure for our business, but also ensuring a consistency and timeliness of supply and managing our risk, in terms of supply contract terms and conditions,” Fidock says.

“Over time we’ve had many, many different suppliers for similar parts so we needed to rationalise: what are the key groupings and how can we get a more orderly arrangement around the companies we trade with?

“We are still assessing our current spend, looking at key suppliers, and approaching them for opportunities for improved contracts,” Fidock adds.

“The key here is to work closely with suppliers to find the most timely and

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“…we’ve spent considerable effort embedding safety as part of our day-to-day operations, because we understand that safety excellence equals operational excellence”

Tod Mathews Executive General Manager Operations

– Allan Fidock, Managing Director cost effective outcome, not simply a cost reduction which can be counter productive when the ultimate result needs to be sustainable for all parties.”

There’s much commonality across the areas of inventory management and procurement, and they go hand-in-hand with HSE Mining’s third pillar of process improvement: maintenance cost management.

“Maintenance is something we’ve always been really proud of, in terms of our ability to properly maintain equipment to a great standard. But that said, everything is open to review,” Fidock says.

“Those are the key areas we’re working through now, to give us confidence that we’re moving in the right direction.”

Lastly, the final piece of the puzzle as HSE Mining consolidates, is a revamp of its data capture and processing systems.

“Historically, the integration of our claims

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Tod has over 25 years’ mining experience covering various commodities including coal, gold, nickel, and chromium.

Over the years, Tod has held numerous technical and operational positions with significant experience in open cut coal mining for both owner and contract mining companies.

Tod oversees the daily operations, including production and maintenance, of our mining contracts by exercising leadership that empowers site project managers in the delivery of client requirements and maximises the capacity and resources of HSE Mining.

As a first priority, Tod champions our safety culture and integrates safety into all operational activity to ensure visible safety leadership at all times.

Tod drives productivity improvements and cost saving activities across operations, continually identifying and implementing strategies to maximise resources and deliver the best results for HSE Mining and its clients.

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data into a format that suited our client was proving to be problematic, and we could also see opportunities to improve our efficiencies and capture our own data better,” Fidock explains.

“For instance, each of our contracts has different conditions around payment, and at the end of each month, we need to collate data accurately to ensure claims are provided to our clients efficiently and effectively. We now have a program to capture the right data and provide our customers with the information they need quickly, consistently and efficiently, while also leveraging that information to continue improving our own processes.”

There remains “a whole range of opportunity out there” to adopt further technologies, to enable processes within their business that have historically been largely paper-based, and Fidock is exploring opportunities to streamline day-to-day operations.

All of these elements, which have been focused on driving excellence in operations and continually improving processes, have combined to put the company in the position of strength it is in today.

“The driver behind these programs is the fact that we’re preparing ourselves to be absolutely match fit, for when new opportunities come along and market conditions improve,” Fidock says.

The relatively new ownership structure is also helping HSE Mining to build upon a firm foundation for future success.

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Key People

Keith Butler General Manager Safety Keith has over 30 years’ experience in heavy industry, civil construction, mining, oil and gas including 10 years’ experience in Queensland Government in occupational health, safety and human resources. His expertise and role at HSE Mining is based on the following key areas: • strategic safety management • behavioural based safety and BBS program development • safety, quality and environmental management systems and third party accreditation • project planning, project builds and safety, quality and environmental planning • safety leadership, coaching and mentoring • injury management and common law management • risk management and incident investigations Keith has been with HSE Mining since 2014 and holds a Masters of Applied Science (OSH & Environmental) Management, Graduate Certificate of Employment Law, Graduate Certificate of Risk Management, Bachelor of Business, Diploma OHSM and Diploma of Project Management. Keith is also currently completing his final year of Doctor of Health Science with QUT.

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MINING

“Three years ago, HSE Mining was has not been a difficult process – bought by the Swire group. Previously because that culture and values we were owned by one entrepreneurial already exist in our business.” and successful individual who As well as reinforcing its started the business 25 values, new ownership years ago. We have has put a floor under evolved from that HSE Mining’s financial Approximately foundation into stability, he adds. a business now “This is still a owned by a very very competitive market. Everyone large international, Number of Employees is really tentative family-owned at HSE Mining around calling the company,” Fidock says. recent improvements in “Swire brings a strong commodity pricing as the ‘end’ values base to our business. of the bad period, but regardless We’re in the middle of reinforcing the strong values of what is a 200-year-old of economic conditions, our goal is to continue to operate safely, cost family business and for us, integrating effectively and cost efficiently.” those values into the way we work

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