CONSTRUCTION MATERIALS GIANT MOVES INTO THE RECYCLING INDUSTRY

Hanson Australia has announced it has acquired recycling aggregates company The Alex Fraser Group.
Hanson Australia has announced it has acquired recycling aggregates company The Alex Fraser Group.

CONSTRUCTION MATERIALS GIANT MOVES INTO THE RECYCLING INDUSTRY

Building materials supplier Hanson Australia has acquired leading recycled aggregates producer the Alex Fraser Group in a move that will increase its presence in ‘aligned’ industries.

Hanson Australia – a subsidiary of multinational company HeidelbergCement – acquired Alex Fraser for approximately 135 million ($AUD208m) after its parent company John Swire & Sons decided to sell it following a ‘strategic review’ in 2017.

In a statement, Hanson noted that the acquisition would allow the company to continue expanding into parallel industries such as recycling and asphalt.

“The acquisition represents an important step for Hanson Australia,” HeidelbergCement managing board chairman Bernd Scheifele said.

“In particular, it will provide Hanson Australia with expertise in asphalt and construction materials recycling that complements the existing business and can be leveraged for entry into other markets.”

Alex Fraser managing director Peter Murphy said the agreement was an ‘exciting opportunity’ for the business.

“I’m delighted to see Alex Fraser acquired by Hanson, which is one of Australia’s largest and most innovative providers of construction materials,” Murphy said.

“There are great synergies between our businesses. There’s a bright future ahead for Alex Fraser and we look forward to being part of Hanson,” he added.

Hanson’s chief executive Phil Schacht also confirmed that Alex Fraser would continue to operate as a stand-alone business, noting it was ‘important’ for the company to retain its brand.

Quarry approached Hanson and Alex Fraser for additional comments regarding the local impact of the acquisition on the aggregates industry but both companies declined to comment.

Alex Fraser was established in 1879 in Melbourne and is now one of Australia’s leading C&D recycling contractors.

Hanson is an aggregate producer that operates nationwide. It is part of HeidelbergCement, a multinational cement, concrete and heavy building products supplier that operates on five continents.

Mining recovery boosts CIMIC performance with new contracts

Global contractor CIMIC has used improving market conditions in mining and minerals processing to help increase its 2017 profits by 21 per cent.

The diversified company’s mining and minerals processing divisions — Thiess and Sedgman — achieved growth last year, CIMIC reported, securing contracts and extensions in Australia and Indonesia, including an extension at the Fortescue Metals Group’s Solomon Hub iron ore operation in the Pilbara of Western Australia.

This performance in mining and minerals processing helped CIMIC deliver $702 million in profits for the year, which was just above its $640–700 million guidance.

CIMIC also strengthened its position in the construction industry with several new contracts, both in Australia and internationally.

Michael Wright, CIMIC chief executive officer, said the company leveraged its competitive position and favourable market conditions to produce the operating performance and further diversify an order book across mining, construction, services and public private partnerships.

“We increased our focus on the development of our people during the year, and will further this in 2018 to ensure our performance-based culture provides long-term, rewarding career for our people,” Wright said.

CIMIC secured $18.4 billion worth of new work in 2017, including the $650 million contract extension at the Solomon Hub.

Also in mining, the BHP Mitsubishi Alliance (BMA) awarded Thiess two contracts worth a combined $440 million at the Caval Ridge and Peak Downs coal mines in the Bowen Basin of Queensland.

Thiess was also awarded a $189 million contract extension to continue to operate the Jellinbah Plains open pit at the Jellinbah East coal mine in central Queensland.

Sedgman’s contract wins included a $107 million EPC contract at Heron Resources’ Woodlawn zinc-copper project in New South wales, a $6 million EPC contract with Stanwell Corp at the Meandu mine coal handling and preparation plant in Queensland, and contracts worth a combined $100 million at QCoal Group’s Byerwen coal mine in Queensland.

The most valuable mining brands

Australian miner BHP has unseated Glencore as the most valuable brand in mining, according to research from Brand Finance.

BHP “struck gold” with its major 2017 re-branding exercise, a report on the research explained, with the company’s brand value rising by 29 per cent to $US5.1 billion, pushing it well above Glencore ($US3.7 billion) on the Brand Finance Mining, Iron & Steel 25 league table.

In May 2017, BHP launched the “Think Big” campaign, which involved rebranding from BHP Billiton to BHP. The rebranding not only increased BHP’s brand value in Brand Finance’s latest research, but also bolstered its Brand Strength Index (BSI) score from 73.2 to 74.3.

The brand value is equal to a net economic benefit that a brand owner would achieve by licensing the brand, whereas brand strength is used to determine what proportion of a business’s revenue is contributed by the brand, according to Brand Finance.

Glencore’s brand value dropped by 11 per cent in 2017 due to the significant fall in brand strength, from 62.9 to 55.3, caused in part by its association with the Paradise Papers released during November.

Rio Tinto improved two spots to fourth on the league table, behind South Korea’s Posco, with a 25.4 per cent increase in brand value to $US3.1 billion. Brand Finance said Rio enjoyed strong brand value growth alongside higher iron ore prices driven by a lift in demand in China.

Brand Finance chief executive David Haigh said after the 2014 metal price crisis, caused by a drop in demand for raw materials in China, the industry was once again being shaped by the Chinese market.

“The country’s demand for higher-quality iron ore imports is benefiting the industry’s largest brands such as BHP and Rio Tinto,” Haigh said.

“Challenger brands will need to define their competitive advantage to capture a greater proportion of the ever-growing Chinese market.”

The world’s most valuable mining, iron and steel brands (source: Brand Finance):

2018 Rank Brand name Country of HQ Brand Valuation (USD, billions) 2017 Rank Movement
1 BHP Australia 5.1 2
2 Glencore Switzerland 3.7 1
3 Posco South Korea 3.6 3 =
4 Rio Tinto United Kingdom 3.1 6
5 ArcelorMittal Luxembourg 2.9 4
6 China Shenhua China 2.8 9
7 Nippon Steel Japan 2.3 8
8 Vale Brazil 2.1 7
9 Thyssenkrupp Germany 2.0 5
10 Baowu Steel China 2.0 14

Elliott Management renews calls for BHP restructure

Elliott Management renews calls for BHP restructure

Investor Elliott Management has again suggested that BHP should review its dual-listed structure and reorganise as a single company in Australia to add over $22 billion in value for shareholders.

It is a view that the company’s chief executive officer Andrew Mackenzie has disagreed with in the past. The CEO said late last year that costs would probably outweigh the benefits, and estimated a cost of $1.3 billion.

According to Elliott’s report, however, which was created under commission by FTI Consulting,  reorganising BHP’s head operations into a single Australian entity would cost only $391 million.

BHP’s dual-listed structure, a result of the 2001 merger between the Australian half of BHP and the UK half of Billiton, means BHP Billiton as a whole has two HQs (Melbourne and London) and two market listings, but a single management and board.

FTI’s study stated that restructuring into single listing could result in a $14.1 billion increase in market valuation and a return of $8.7 billion through improved tax credit efficiency.

BDO predicts robots will replace over half of miners by 2020

A report from global advisory organisation BDO Australia has predicted a number of future trends in the mining industry, including the prediction that 50 per cent of miners will be replaced by robots by 2020.

Handily though, the report also claims that around half of the jobs to be replaced will result in retraining of employees for remote technology control, spurring a demand in upskilling and hopefully avoiding any Skynet-style pitfalls in the process.

An additional plus side of this robotisation is that it should also cut workplace accidents by 75 per cent. However, the report, which can be read in full here, does warn of the potential ramifications of mining’s increasing connectivity; it suggests that by 2020, there will have been at least five global PDoS (permanent denial of service) cyberattacks at mine sites initiated through connected devices.

“The value of harnessing technology is clear,” said Sherif Andrawes, national leader, national resources at BDO.

“Driverless technology increases mining output by 15 to 20 percent while cutting fuel and maintenance costs by 10 to 15 percent and 8 percent, respectively [and] it also improves mining safety exponentially.

“At the same time, though, these Internet-connected technologies open the mining industry up to new cyberattack vectors that they must hedge against through proper internal controls. If not, they risk seeing their entire operation crippled by a single attack.”

In addition to trends of automation and connectivity, the report also predicts that renewables will account for a quarter of global electricity generation — a big change from the 14.1 per cent figure cited by a BP report in 2016 — and that deep-sea mining will begin to take off commercially, citing the work done by Nautilus in Papua New Guinea.

This is in part due to a cutdown in coal use, which currently accounts for around half of global electricity production. China, the world’s largest coal energy market, recently introduced new environmental protection legislation to combat its famously high air pollution.

2020年时的矿山

THE NEAR FUTURE OF MINING: GLOBAL PREDICTIONS

January 2018

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Read the Full Analysis [PDF]

WHEN ROBOTS RUN THE MINES
PREDICTION 1

ROBOTS
By 2020, robots will replace more than 50 percent of miners, and mining accidents will be cut by 75 percent. Half of the miners will themselves be retrained to run the technology controlling the robots.

Robots will be at the forefront of most mineral extraction by 2020, reducing safety risks for miners, maximising output, and streamlining costs. By 2020, we predict robots will replace most miners. Most in the workforce will be retained, but advances in technology and remote mining equipment will transform what that workforce looks like.

The global mining industry is already well-acquainted with autonomous technology. Self-driving trucks and autonomous drillers and muckers are employed onsite at almost every large multinational company’s mines. “Snake robots”—named for their agility—are equipped with Internet-connected sensors and used to navigate narrow mine shafts and collect data. Drones are also beginning to play a role in mapping the topography of a mine and capturing aerial images of inaccessible areas of the mine to identify possible vulnerabilities
and areas of tension. Remote vein miners (RVMs) are being developed to eliminate the need to drill and
blast to excavate rock—potentially reducing rock stress that can lead to seismic events.

The rise of the robot is not a death knell for the mining workforce but will inevitably lead to a demand for
reskilling. Traditional operational positions—drilling, blasting, and driving—will be downsized, but replaced by demand for remote operators and maintenance personnel to create the new version of the miner. Emerging digital mining jobs—engineers, software developers, and data processing and data analytics specialists—are more likely to attract the technologically savvy millennial workforce. By 2020, mining automation and data analytics will be key components of the curriculum for mining engineers.

Digitisation also promises to reduce safety risks for miners. Not only will robots assume the most dangerous tasks, but they’ll also be key to minimising damage if disaster strikes. Snake robots and the smart sensors they’re equipped with will be further optimised to capture real-time data to predict or quickly identify equipment malfunctions and closely track miners’ exact locations and vitals. With the aid of robots and new technology, the number of mining fatalities will be cut in half by 2020.

Mining is in the early stages of the Fourth Industrial Revolution, or Industry 4.0, and further digitisation is just around the corner.


TRANSPARENCY COMBATS CONFLICT
PREDICTION 2

EU CONFLICT MINERALS RULE
Supply chain transparency will take the compliance spotlight for 2020 as companies gear up for the European Union’s Conflict Minerals Rule, effective in 2021.

The EU’s efforts to stem trade in minerals that finance armed conflicts and terror groups will turn a spotlight on global mining companies’ supply chains by 2020.

The EU’s Conflict Minerals Regulation, effective in 2021, establishes supply chain due diligence for imports of tin, tantalum, tungsten, and gold (3TG)—used to produce phones, cars, and jewellery. The rule aims to ensure
European industries use responsiblysourced minerals, stemming proceeds that finance armed conflict in highrisk areas.

What the rule means for the mining industry:

  • EU-based 3TG importers and their international supply chain partners—smelters and refiners— will need to update their supply chain due diligence
  • Additionally, 3TG importers in the EU will need to identify the smelters and refiners in their supply chains, confirm their due diligence practices comply, and report insufficient supply chain due diligence
  • The Organisation for Economic Co-Operation and Development (OECD) laid out a five-step framework for the due diligence requirements:
    • Create strong company management systems
    • Identify and assess supply chain risk
    • Implement a program to respond to such risks
    • Conduct an independent thirdparty audit of supply chain due diligence
    • Submit annual reports on supply chain due diligence.

All upstream companies are subject to the due diligence requirements when they import—the riskiest area of the supply chain—as are downstream companies that import metal-stage products. This regulation will likely create a lowest common denominator effect across the global mining industry—for EU-based 3TG importers and their international supply chain partners—requiring the entire industry to put supply chain due diligence at the forefront.


HACKTIVISTS TARGET MINES
PREDICTION 3

CYBERSECURITY
By 2020, activist hackers will launch at least five cyberattacks on mines around the world in Permanent Denial of Service attacks aimed at eliminating the environmental and social threats they pose. They’ll use workers’ connected devices to initiate the attacks.

The mining industry is no stranger to environmental scrutiny. Advances in technology have introduced more sustainable mining methods, including the emerging practice of bioleaching, in which companies extract inerals by using biological assets instead of harmful chemicals. Despite those advancements, environmental concerns ersist, including water and soil contamination, carbon emissions, and impact on animal life. Pressure from environmentalist is set to increase by 2020. In fact, an emerging type of environmentalist—activist hackers (hacktivists)—will soon have their targets locked on the mining industry. By 2020, there will be at least five Permanent Denial of Service (PDoS) cyberattacks on mines around the world, motivated by eliminating the environmental and social threats they pose.

PDoS attacks are the next generation of Distributed Denial of Service (DDoS) attacks—which temporarily disable operations—and aim for permanent destruction. In a PDoS attack, hackers’ goals include destroying physical equipment and structures, disabling services, and/or wiping out data. For global mining companies in the early stages of harnessing big data, losing seismic and reserves data would be damaging to their ongoing operations.

While the rapid acceleration and adoption of new technology will be instrumental in bolstering mining’s future, it will also be the sector’s Achilles heel when it comes to cybersecurity. The industrial control system, the central hub controlling a mine’s automated operations, could serve as the hacker’s point of entry into the mine’s remote
operating controllers and connected devices. Damage and disruption to automated equipment could also jeopardise the safety of workers in the mines—as many of the systems in place are designed to monitor and
detect dangerous conditions.


COAL STRIPPED OF SOME POWER
PREDICTION 4

RENEWABLES
By 2020, renewables will account for one-quarter of the world’s electricity generation as dependence on coal wanes.

Decreased coal consumption in China—the world’s largest coal consumer—is slowing global demand for the commodity. According to the International Energy Agency, global coal consumption decreased about 2 percent last year. In confluence with the rapid growth of renewables, the world’s energy mix is set for a shakeup. By 2020, we predict that renewables will grow to account for one-quarter of the world’s electricity generation as dependence on coal wanes.

Mining plays an integral behindthe-scenes role in developing renewable energy. Electric vehicles, wind turbines, and solar panes rely on minerals like aluminium, copper, lithium, and various emerging, rare metals. Powered y new technology, deep-sea mining is allowing mining companies to tap into previously inaccessible reserves of copper, nickel, and cobalt, among others, beneath the ocean floor to fuel increased demand for these minerals.

In 2019, Nautilus Minerals, a Canadian mining firm, is set to launch one of the first large deep-sea mining ventures in the Bismarck Sea with the aid of remote-controlled robots. The excursion is forecast to produce more than 72,500 metric tons of copper and more than 4.5 metric tons of gold. The International Seabed Authority, a United Nations regulatory body, has granted 25 contracts to nations including China, India, Japan, and Brazil to embark on similar deep-sea mining projects.

By 2020, further advancements will be made to overcome one of renewables’ largest hurdles: energy storage. The world’s largest lithium ion battery—built by Elon Musk in November 2017—is a 100-milliwatt (MW) battery storage farm located in Australia. Come 2020, the capacity of energy storage is likely to evolve well beyond 100MW, solidifying renewables’ role in the world’s energy mix.


AN ARSENAL OF AUTOMATION BOOSTS PROFITABILITY
PREDICTION 5

IoT IN MINING
Global mining companies leveraging Internet-connected sensors and automated drillers in mines will decrease their per ton digging costs by more than 30 percent.

In an environment of subdued commodity prices, the value of harnessing technology is clear. Mining companies’ end consumers closely monitor the price of commodities and are sensitive to the slightest uptick. For automakers, for example, steel is a significant expense on their books. When multiplied by a few thousand metric tons, a variance of a few cents on steel price could incentivise automakers to find a new supplier. Global demand is not expected to wane. In fact, steel and mining company ArcelorMittal forecasts a 36 percent increase to automakers’ global demand for steel by 2020. However, which global mining companies win that business is up for debate.

Tapping into new technology is key to streamlining operations, reducing expenditure, and enabling companies to keep their prices competitive. The International Institute for Sustainable Development estimates driverless technology, for instance, increases mining output by 15 to 20 percent, while decreasing fuel and maintenance costs by 10 to 15 percent and 8 percent, respectively. Self-driving trucks are just the tip of the iceberg. Global
mining companies that digitise nearly all their drilling—relying on a combination of automated drillers and Internet-connected sensors—will recognise far more significant savings. By 2020, we predict global mining companies’ per ton digging costs will decrease by more than 30 percent because of automation.

These savings factor in reduced labour costs, increased output, a decrease in the number of safety incidents, and companies’ ability to enhance decision-making capabilities leveraging the vast amount of data collected by smart mines.

Return to BDO’s Energy 2020 Vision: The Near Future of Mining

The top mining trends of 2018

Mining is poised for growth, according to Deloitte’s 2018 Tracking the Trends report.

The latest issue of key mining trends, the 10thedition in the series, focuses on how the Australian, and global marketplace, is navigating this expansion by identifying strategies companies can use during the ongoing industry recovery.

Click here for a snapshot of this year’s trends from Deloitte.

With this growth, rapid change will follow, Deloitte explained, adding that a common modern-day theme — digital technology — would be at the core of this transition.

The industry has progressed from the need for miners to understand and develop digital projects to how they ‘bring digital to life’ at their operations.

This is the opening trend for Deloitte in 2018, and one that offers an overbearing theme for many of the points that follow it in the report.

Digital may be an ongoing trend in the current mining environment, but Deloitte points to the importance of effectively using the data these technologies create, including the ability to organise, manage and process it.

Deloitte Australia national mining leader Ian Sanders described digital technology as an important competitive advantage that miners must capitalise on.

“If you look at the majors, yes, they have the programs of activity up and running. They are looking at their investment dollars, particularly how they invest them and the competitive nature of these investments,” Sanders told Australian Mining.

“Digital is one of those competitive elements — how much do they actually spend on automation? How much do they spend on the back office digital? how much do they actually look at their ecosystem of suppliers and customers, government, other stakeholders and co-mingle that investment within digital is really important?”

Deloitte’s report explained that transitioning to the future digital mine typically started by focusing on core mining processes with the goal of automating physical operations and digitising assets.

It believes the real value from digital technology comes from unlocking the insights within data by rethinking the way information is generated and processed.

Many major miners have been on the front foot in this area, according to Deloitte, with the report using the example of a global company that identified latent system potential across its pit, rail and port network by effectively using data.

However, the report adds that many mining organisations are not yet using all the data they are capturing from operational systems, or are still struggling to improve reporting from legacy systems.

Despite the challenges, Sanders said the full spectrum of mining companies was now looking at digital technology projects — the majors, mid tiers, juniors and services companies.

“I think you have to. Firstly, to be relevant, and secondly, to survive,” he said. “Whether you are a major, junior or mid-tier you are absolutely thinking about it because everyone is thinking about efficiency and digital is a core element of becoming more efficient.

“There are some mid tiers and juniors which are very active when it comes to digital and technology. It’s not as though they have been left behind, it’s how can they extract the investment dollar to best leverage digital within their organisation?”

Technology isn’t the only disruptor in mining — there are also emerging commodities changing the landscape of the industry, according to Deloitte’s trends.

The so-called tech metals, or Deloitte’s commodities of the future — nickel, lithium, cobalt and graphite — are another leading element of change in mining.

Deloitte Consulting mining leader David Cormack said it would have been hard to believe 20 years ago that these commodities would be an affordable way to power batteries.

“But, today that is the reality and a potential growth opportunity, particularly with the emergence of electric vehicles,” Cormack said.

“And although asteroid mining for rare metals still sounds like science fiction today, the market potential in the not-too-distant future could be huge. If mining companies want to get ahead of the trends, they need to delve deeply into emerging market disruptors.”

Deloitte’s 2018 trends include: Bringing digital to life; Overcoming innovation barriers; The future of work; Shifting perceptions; Transforming stakeholder relationships; Water; Changing shareholder expectations; Reserve replacement woes; Realigning mining boards to drive transformation; and, Commodities of the future.

Click here for a snapshot of this year’s trends from Deloitte.

Demand for mining services ramps up

It was undoubtedly a better year for Australia’s leading mining services companies in 2017.

Improved commodity prices led to an increase in mining activity, meaning the expertise of the country’s mining services contractors was in growing demand.

Australian Mining takes a closer look at some of the companies that were awarded key mining contracts during 2017 in this two-part feature.

Ausdrill
Ausdrill’s long-term relationships with mining clients in Australia and Africa continue to serve the company well. The Perth-based company’s 2017 was highlighted by a series of contract extensions, as well as a few new contracts across both continents.

Ausdrill finished off spring by announcing it had secured three extensions in the gold industry, including an extra three years of production drilling work with Evolution Mining at the Mungari project in Western Australia.

Through its African Mining Services (AMS) subsidiary, the contactor was awarded a two-year extension worth $142 million at AngloGold Ashanti’s Iduapriem gold mine in Ghana, while Resolute Mining extended its contract at the Syama operation until May 2018.

Earlier in 2017, Ausdrill secured more than $200 million worth of contract extensions with two of its existing clients in the Goldfields region of Western Australia – Kalgoorlie Consolidated Gold Mines (KCGM) and Gold Fields.

It was also awarded a three-year, $60 million contract extension to provide exploration drilling services at Gold Fields’s St Ives and Granny Smith gold operations.

BGC Contracting
BGC Contracting’s 2017 was highlighted by the award of two major contacts, one in Western Australia and the other in New South Wales. BGC most recently won a five-year, $700 million contract by Idemitsu Australia Resources at the Boggabri coal mine in New South Wales.

Earlier in the year, BGC secured a five-year contract worth more than $720 million at Arrium’s Iron Knob and South Middleback iron ore operations near Whyalla in South Australia. The Arrium contract replaced an existing mine services contract BGC had with the steel-maker and iron ore miner.

The Perth-based company topped off its year by taking out the Australian Mining Prospect Awards 2017 Contract Miner of the Year for the second straight time. The company was honoured for the collaborative model it has successfully applied to contracts with the likes of Arrium, Cliffs Natural Resources and now, Idemitsu.

CIMIC
CIMIC’s mining and mineral processing divisions – Thiess and Sedgman – thrived for the Spanish-controlled company during 2017.

Thiess’ contract wins and extensions continue to be at the top end of town with the likes of BHP and Fortescue Metals Group awarding it with significant work.

BHP, through its BHP Mitsubishi Alliance, awarded Thiess two contracts worth a combined $440 million. The contracts, at BMA’s Caval Ridge and Peak Downs coal mines in the Bowen Basin of Queensland, will see Thiess deliver mining services for specific components of work.

Fortescue extended its mining services contract with Thiess at the Solomon Hub in the Pilbara. The $650 million contract extension strengthens a relationship between the two companies first formed at the site in 2011.

Also in coal, Thiess was awarded a $189 million contract extension to continue to operate the Jellinbah Plains open pit at the Jellinbah East coal mine in central Queensland.

Thiess was active in Indonesia, winning a $437 million contract at the Gunung Bara Utama (GBU) coal mine and a $300 million contract with Kaltim Prima Coal (KPC) at the Sangatta coal mine.

Meanwhile, Sedgman backed up its $107 million EPC contract win at Heron Resources’ Woodlawn zinc-copper project in the first half of the year with two new agreements in the east coast coal industry.

Stanwell Corp awarded Sedgman a $6 million engineering, procurement and construction (EPC) contract to deliver a tailings dewatering facility at the Meandu mine coal handling and preparation plant in Queensland.

Sedgman then won contracts at QCoal Group’s Byerwen coal mine in Queensland worth almost $100 million. The contractor is delivering a stockpiling and train load-out facility, and a coal handling and processing plant at Byerwen through two engineering, procurement and construction (EPC) contracts.

Civmec
Civmec announced plans to list on the ASX during 2017, a move that will add to its existing place on the Singapore Exchange. A listing on the ASX will complement the Perth-based company’s strong portfolio of mining-related contracts in the country.

In 2017, the company was active in the mining, oil and gas and infrastructure sectors. In mining, Civmec was awarded contracts or work extensions at a diverse range of projects in Western Australia.

In June, Civmec announced it had received $90 million worth of contracts for resources clients, with the most notable a construction job at Alcoa’s Pinjarra alumina refinery in WA. The company will undertake the engineering, procurement, delivery, construction, integration, commissioning and performance testing of a filter facility, materials handling system and supporting infrastructure at the refinery.

Civmec, as part of the Amec Foster Wheeler Civmec Joint Venture (ACJV), was awarded a $298 million engineering, procurement and construction (EPC) contract at the Gruyere gold project in WA.

The company also secured a contract to construct the civil component of the process plant at Altura Mining’s Pilgangoora lithium project in the Pilbara.

GR Engineering
Perth-based GR Engineering secured a series of contract wins in Western Australia during 2017, particularly in the state’s gold sector.

In April, Dacian Gold executed a $107.1 million EPC contract with GR at the Mt Morgans project in the Goldfields region. The work involves development of the Mt Morgans treatment facility and supporting infrastructure.

GR also signed an agreement with Gascoyne Resources for an EPC contract for a minerals processing facility at the Dalgaranga gold project in the Goldfields.

In June, GR secured another EPC contract, this time a $31.3 million deal with AngloGold Ashanti at the Sunrise Dam gold mine.

Downer
Downer’s 2017 took a turn when Adani became the owner-operator of the Carmichael coal project in Queensland, effectively scrapping the letters of award the two companies had signed for construction and mining at the controversial operation.

How Downer fills the void in work left behind by Adani’s decision to go-it-alone at Carmichael is yet to be seen, but the diversified contractor did manage to bolster its order book in other areas during 2017.

Downer was awarded a $400 million contract to provide mining services at the Gruyere gold joint venture project between Gold Fields and Gold Road Resources in Western Australia.

The five-year contract involves construction of haul roads, stockpiles and other infrastructure; drilling and blasting; loading and haulage of ore and waster; run of mine feed; and technical services.

Its joint venture with Ausenco is also bearing fruit, with OZ Minerals awarding the JV a $312 million EPC contract at the Carrapateena copper-gold project in South Australia.

The Carrapateena scope of works includes engineering, procurement and construction (EPC) of a minerals processing plant, including the non-process infrastructure to support the operations.

Downer Blasting Services (DBS) also won $240 million of work at open cut and underground mines in Queensland, New South Wales and Western Australia.

Macmahon Holdings
Macmahon (it hopes) put CIMIC’s failed takeover attempt for the company behind it by winning lucrative contracts on both sides of the country during the second half of 2017.

In Western Australia, Mamchaon won a mining contract worth at least $250 million at one of the country’s most exciting new gold developments – Dacian Gold’s Mt Morgans operation in the Goldfields.

The five-year contract will see Macmahon provide drilling and blasting, loading, hauling and technical services.

In Queensland, Macmahon executed a $350 million mining services contract at QCoal Group’s majority-owned Byerwen coal mine in the Bowen Basin. The contract involves the provision of all open cut mining and bulk earthworks at the new mine near Glenden.

Macmahon also pursued additional work in Indonesia’s coal industry throughout the year.

Monadelphous
Monadelphous’ diversified contract portfolio was bolstered from a mining perspective during 2017 with new contracts or extensions for maintenance and construction work.

Most recently, Monadelphous secured maintenance and construction contracts in the resources and infrastructure industries worth a combined value of around $110 million.

The work includes a three-year contract to provide shutdown maintenance, breakdown and repair services, minor projects and ad hoc services for BHP at Mount Arthur Coal in the Hunter Valley of NSW.

In September, Monadelphous has secured new maintenance and construction work in the resources industry worth $220 million. The new maintenance work includes a two-year contract to supply fixed maintenance services for Rio Tinto at its Pilbara operations.

Monadelphous was also active in the international mining industry, securing an agreement to provide services for the Shaft 1 and 2 surface infrastructure at the Oyu Tolgoi project in Mongolia.

In the first half of 2017, Monadelphous announced it had secured $120 million worth of new contracts for resources companies, including Fortescue and BHP. The Fortescue work included two contracts, one for cranes services at FMG Solomon and Solomon Hub, and the other to provide services for subsidiary, The Pilbara Infrastructure. Monadelphous’ contract with BHP involved upgrading a water treatment plant at the Mining Area C iron ore operation in the Pilbara.

NRW Holdings
NRW Holdings’ 2017 went from strength to strength, culminating with gold developer Gascoyne Resources official awarding it with a $324 million mining services contract at the Dalgaranga operation in the Murchison region. The six-year contract is for open pit mining services, as well as drill and blast operations and associated services.

Perth-based NRW reported in August that its participation in the early contractor involvement process at OZ Minerals’ Carrapateena copper-gold project in SA was nearing completion. The $111 million Carrapateena package one contract comprised development of an access road, tailings storage facility, quarry and an airstrip.

NRW also acquired east coast mining services company, Golding Group, for $85 million during the year. As part of NRW, Golding was awarded a mining services contract at Fitzroy Australia Resources’ Broadlea open cut coal mine in Queensland.

To kick-start NRW’s 2017 campaign, lithium developer Altura Mining awarded it with a $110 million contract for mine development and drill and blast services at its Pilgangoora project in February. The five-year contract includes the construction of mining infrastructure, development of mine haul roads, drill and blast services and load and haul production mining of ore and overburden.

RCR Tomlinson
Pilbara Minerals awarded the EPC contract for its Pilgangoora lithium operation to RCR Tomlinson in early 2017. Worth up to $148 million, contract involved the EPC of Pilgangoora’s 2Mt/y lithium-tantalum processing plant, including wet-and-dry circuit with concentrator, associated plant and commissioning of the mine. Pilbara cleared the way for construction to start on the plant in July.

Fortescue awarded RCR with a $33 million contract to design, manufacture and construct a five-kilometre relocatable conveyor system for its iron ore operations in the Pilbara. RCR is leading the design, manufacture and construction of the conveyor system, which will be trialled at Fortescue’s Cloudbreak mine.

The top mining trends of 2018 — a snapshot

Now in its 10th year, Deloitte’s Tracking the Trendsreport has followed the mining sector over the past decade as commodity prices reached both historic highs and lows.

After hitting the bottom of the cycle, this year’s report identifies strategies companies can take to smooth out the recovery and explores the potential industry disruptors on the horizon.

Here is a snapshot of each of Deloitte’s top mining trends in 2018:

  • Bringing digital to life: data – and the ability to organise, manage, and process it – is rapidly becoming a competitive differentiator. Mining companies must embed digital thinking into the heart of business strategy and practices to transform the way corporate decisions are made.
  • Overcoming innovation barriers: innovation is necessary for the industry to transform, and it isn’t confined to technology; it includes the adoption of more innovative approaches to engaging with stakeholders, re-envisioning the future of work, and identifying the commodities that will be in greatest demand going forward. The need to demonstrate near-term returns combined with a traditionally risk-averse culture that does not foster collaboration are hindering efforts to innovate within the industry.
  • The future of work: while the adoption of digital solutions, such as robotic process automation, autonomous equipment, and artificial intelligence will augment performance in the mining industry, it also has potential to cause upheaval. Rather than eliminating jobs though, it will likely translate into concerted efforts to retrain people to use technology and redesign jobs at both the mine site and in the back office.
  • Shifting perceptions: to rebuild trust with employees, investors, communities, governments, and the public, many leading mining companies are embarking on efforts such as taking decisive public stances around corporate social responsibility, adhering to voluntary sustainability standards, and passing shareholder resolutions regarding increased disclosure on climate change.
  • Transforming stakeholder relationships: rather than approaching relationships with communities and governments as a cost of compliance, companies must determine how to make a concrete social impact that adapts to the benefit of different stakeholder groups.
  • Water – finding sustainable solutions to a pressing issue: as the UN estimates that water scarcity impacts about 40 per cent of the global population, mining companies must enhance their approach to water management through innovative methods designed to reduce, reuse and recycle water in water-scarce regions, and to contain and treat wastewater to prevent spillage or contamination of downstream water flows.
  • Changing shareholder expectations: performance measures should reflect varied objectives to create value for multiple constituencies — including customers, employees, suppliers, and communities — not just shareholders. This would free up boards to focus more on long-term strategies, succession planning, and leadership development, while linking executive compensation to broader corporate goals —including those related to good corporate citizenship and ethical behaviour.
  • Reserve replacement woes: as supply constraints plague the industry, mining companies will need to find a more agile way of replacing reserves — one that allows them to engage in exploration and development without sinking in large amounts of capital for long periods of time.
  • Realigning mining boards to drive transformation: Boards mired in old ways of thinking will increasingly struggle to fulfil new mandates, such as taking a more active role in challenging the executive team on topics from corporate strategy to digital disruption, talent management, and emerging risk factors. Diverse perspectives are necessary if mining boards are to effectively challenge organisational assumptions, assess the validity of new ways of thinking, and help determine if the organisation is taking on too much risk, or perhaps not enough.
  • Commodities of the future – predicting tomorrow’s disruptors: Turning disruption into opportunity requires a long-term view capable of assessing how emerging market trends may affect the demand for specific commodities.

Edna May gold mine sold

Evolution Mining posts Q4 report, gold down 14.4%

 

Evolution Mining has posted its fourth quarter 2017 operational report, and overall gold output fell by 14.4 per cent, when compared with third quarter results, to 186,488 ounces (oz).

This was largely attributable to the company’s sale of its Edna May gold mine last October to Ramelius Resources; the mine had been owned by Evolution since 2011 and in operation by various companies since the 1980s.

Despite the slight dip in gold output for the quarter, Evolution stated that it was on track for gold production in the 2018 financial year to be above its 750,000–805,000oz guidance range.

In other good news, the company’s overall cash balance tripled, increasing by $113.4 million to $163.5 million; Evolution’s bank debts were reduced by 32 per cent and gearing reduced by 9.5 per cent, while also achieving a record-low sustaining cost of $784/oz.

The Ernest Henry mine in northwest Queensland, in which Evolution operates under an agreement with Glencore, saw record quarterly net cash flow of $55.1 million.