The GUARDIAN Magazine July 2014

Edition -11- 2014
The
M A G A Z I N E
Feature Profile
GRAEME WALLIS
Managing Director
Wallis Drilling
Health, Safety and the
Pursuit of Happiness
China:
How dependent are we on the
Middle Kingdom?
Aussie Pubs
Keepin’ Up with Shorty and
Bob’s Great Australian Pub
Crawl
The Increasing
Importance of Risk
Assessments to
the Safety of Your
Business
“For the Love of Drilling”
Rig D03 Schramm T685WS Carrier: MAN 8x8
The Magazine of Safety Management and Risk Solutions
www.smrs.net.au
Safety and Health
Management System
Drilling Contractors
and Operators
Drill 2014
Contents
Articles
OFF
4
Welcome Note
from Sharyn McCulloch
5
Feature Profile
Graeme Wallis, Wallis Drilling
9
Mines Safety Bulletin 140: Drowning
Hazards in Open Excavations
9
Well Control School of Australia
10 Phoenix One: The Ultimate Time Out by
Lynette Cooper
Valid until 30 September 2014
12 Effective Risk Assessment is Increasingly
Important to the Safety of any Business
by Sharyn McCulloch
• Safety and Health Management Plan System
Framework
• Management Procedures & SOPs
• Forms, Registers and Checklists
14 The Effects of Water in Oil on Equipment
by Greg Wilson
• ADITC Certified Induction Program
15 Tough Times: Or Are They by Phil Spence
• Training Packages
• And Much Much More!
16 China:
How Dependant are we on the Middle
Kingdom? By Chris Towsey
PUT OUR SAFETY AND HEALTH
MANAGEMENT SYSTEM TO THE TEST.
20 Health, Safety and the Pursuit of
Happiness by Steve Hearn
• Implementation Plans
Contact us for your FREE
consultation today.
22 For the Love of Drilling
26 Is Mandatory Audiometric Testing a Thing
of the Past? By Lauren Dearing
I would recommend the GUARDIAN system
to any drilling contractor - it has given us a
solid foundation to continually build our WHS
system which is a major part of today’s drilling
industry.
- Mannion Drilling, 2014
28 Mining Trends 2013-2014 by Lauren Dearing
30 Key Principles for Effective & Efficient Risk
Assessment by Sharyn McCulloch
32 Shorty and Bob’s Great Australian Pub
Crawl – Part 2
34 What’s On! Calendar of Events
SMRS
Safety Management & Risk Solutions Pty Ltd
P: 07 5514 8597 M: 0404 039 081
E: [email protected] W: www.smrs.net.au
www.smrs.net.au
PO Box 1092, Sanctuary Cove Qld 4212
F/T: 07 5514 8597 M: 0404 039 081
W: www.smrs.net.au
3
Edition 7 - 2013
WELCOME NOTE
Welcome note
H
ere we are already staring down the
barrel to the end of the year, I can
only hope that the new financial year
brings a little prosperity to all those working in
our industry and the loosening of our Client’s
exploration budget belts. I am particularly
proud of this edition of The GUARDIAN
Magazine, between myself and Lauren we
work very hard to pull together something that
I hope our readers find not only interesting but
helpful within their business activities, with a
little light relief thrown in Driller style.
The GUARDIAN Magazine remains very
much a labour of love and I’m incredibly
thankful to the people and companies
who contribute. We have another thought
provoking article from Chris Towsey on
China: How dependant are we on the Middle
Kingdom?, and I’m especially pleased to have
Graeme Wallis as our feature profile for this
edition; Wallis Drilling was established in 1964
and is still owned and managed by the Wallis
family.
In honour of Drill 2014 being held on the
Gold Coast in August, we have included
some great photos from our drilling fraternity
for you all to gaze in wonder at the incredible
beauty that is a drilling rig, in all its variations
and sizes, I wonder is bigger always better?
I hope you enjoy our theme “For the Love
of Drilling”. Also look out for our “Drill 2014
Show Specials” we are offering discount
vouchers for QLD SafeOp audits, and also on
the package cost of an SMRS GUARDIAN®
Safety and Health Management System for
drilling contractors and operators, valid until
the end of September.
We also have articles by Steve Hearn from
Velseis, some more hydraulic wisdom by
Greg Wilson of Actfix, and contributions from
both Phil Spence and Denny Hutchison. As
usual we have some informative articles from
Lauren designed to assist you with systems
and compliance, and an article from me on
risk management which focusses on some of
the challenges we face in conducting quality
risk assessments that will provide benefit to
our businesses, rather than just providing a
few sheets of paper that ‘get us across the
line’.
For those of you who appreciated reading
about Shorty and Bob’s Great Australian Pub
Crawl in the last edition, we have the next
instalment for your enjoyment, and if you ever
get the opportunity to frequent some of these
amazing little watering holes, tell ‘em Shorty
Edition 11 - 2014
and Bob sent you, you may even get a free beer!
We have more dates coming up for the
Drilling Contractor’s Obligations under the
QLD Petroleum and Gas (Production and
Safety) Act 2004 Workshop, please go to
our What’s On page for details. We run these
courses at the mighty Broncos Leagues Club
at Red Hill, however we will also come to you
and run them in-house.
Of course I will be attending Drill 2014 in
August, I will be taking notes, conducting
interviews and hopefully getting some quotes
from people in various businesses servicing
the drilling and mining sector for inclusion
in the next edition of The GUARDIAN. So if
you see me wandering around please come
up and say hello, I will have hard copies of
the Magazine to give away, and as usual
I am looking forward to catching up with
4
friends, rogues and acquaintances for the allimportant networking at the end of each day
(aka drilling holes at the bar!).
If you would like to contribute to our next
magazine, please don’t hesitate to contact
Lauren or myself.
Cheers
Sharyn
Director
F/T: 07 5514 8597
M: 0404 039 081 | www.smrs.net.au
www.smrs.net.au
FEATURE | PROFILE
Graeme Wallis
I have been working in the drilling industry since January 1976. Prior to that,
I was employed in the finance industry.
I
joined my father and brother at Wallis Drilling
(in 1976), which was then based in Midland,
WA. Our main focus at the time was the
mineral sands industry. We had just invented
and patented the Aircore sampling system;
my brother Jamie was the inventor and once
developed, we introduced the system to the
wider mining industry.
Our company has grown over the years,
however Aircore is still a very important
segment of our business. We operate 14
Aircore rigs as well as providing reverse
circulation drilling services to the Iron Ore
industry plus drill and blast and grade control
services to mine sites. Overall we operate 50
plus rigs and have 250 staff.
How did you first get involved in the drilling
industry?
My father asked me to join the company
when he wanted to retire and I became a
partner with my brother.
www.smrs.net.au
What were your early impressions of the
drilling industry in Australia?
A fascinating industry that could be better.
The people who worked in it were hard
workers who always tried to do their best.
Management systems right across the board
were simple and basic. There was a good
relationship amongst the drill crews across
the industry.
What are the major changes you have
witnessed in the industry since you began?
The introduction of high pressure air and
sophisticated hydraulics along with drill bit
development have increased production
and productivity by many multiples. Formal
training and concentration on safe operations
has been a driving factor in all areas of the
business. Innovations to reduce manual
handling have improved the long term health
and well being of all employees.
5
What has surprised you most about
working in the drilling industry?
The most pleasant surprise that I continually
have is the quality of the younger people
entering the drilling business. They are smart,
well presented, articulate and have a target in
life. These people look beyond the immediate
job and embrace practical and formal training.
Why do family businesses such as Wallis
Drilling continue to remain successful as
larger companies fall by the wayside?
Family business owners have a lot of “skin
in the game”. They cannot just walk away
when it gets tough nor can they expect a
redundancy payment when cost cutting is
required. More often than not the owners
personally guarantee any debt. Owning a
drilling business is not for the faint hearted.
The old saying is “How do you make a small
fortune? Start with a large fortune and buy
a drill rig”. Owners must have a passion for
Edition 11 - 2014
FEATURE PROFILE CONT.
the business but must also have a strong
disciplined approach to running that business
and must be able to say no.
What benefit does a family owned
company offer the client?
A family owned company has a very direct
line of control. The owners are always involved
in all parts of the contract. I believe that the
stability of management in family companies
attract employees who have a similar attitude
to the owner. Good people work in both family
owned and publicly owned companies.
What would you say are some of your
strongest beliefs about safety and
workplace culture?
A good attitude towards life is vital. It
is no point in hiring a person with plenty of
experience and who is angry and defensive.
Those types of people can affect others
and create a negative attitude throughout
the workplace. The best attitude includes
enthusiasm and willingness to learn.
Who has been the most influential person
in your working life and why?
One of the most influential people in my
time in the drilling industry has been my
brother Jamie. He has always strived to
provide our clients a high quality of sample
or core. Prior to us doing blast hole work, his
favourite saying to drill crews was “the client
is paying us to give them a good sample,
not just a hole in the ground”. He invented
our Aircore sampling system because of a
discussion with a client who was concerned
about samples that were being provided by
current drilling methods.
What is the most rewarding experience –
the highlight of your career - you’ve had
and why?
I cannot think of one particular experience.
Having people come to me at mining functions
and tell me that they used us on a job several
years ago and were very happy with the
results always give me a lift.
Delta 44
Compressor:
Rotation Torque:
Pulldown / Pullback:
Fast Traverse:
Sampling:
Edition 11- 2013
What do you do when you aren’t working?
Family and a bit of golf keep me occupied.
A bit of travel whenever my wife and I want to
do something different.
If you could have any three people alive or
deceased, at a private dinner party who
would they be and why?
Winston Churchill, Bob Menzies and John F
Kennedy. Complex political and social views.
All very intelligent and natural marketers.
Graeme Wallis
Managing Director
Wallis Drilling
Ph: 08 9374 1111
Delta 09
MANTIS 81 Wallis Drilling built Air-Core Exploration Drill Rig
Carrier: 1VD-FTV Toyota Landcruiser converted to 6X6
HQ Aircore to 80 metres NQ Aircore to 130 metres
Drive Engine:
What might we be surprised to know about
you?
I am just an ordinary bloke with no hidden
past.
MANTIS 101 Wallis Drilling built Air-Core Exploration Drill Rig
Carrier: Morooka 1500.
HQ Aircore to 100 metres. NQ Aircore to 140 metres
Toyota 1VD-FTV 4.5L Turbo Diesel
V8, 151kW / 430 Nm Torque
Sullair 10 Series, 160 CFM / 165 psi
1720 Nm
2100 kg
1.2 m/s
Small Cyclone with Rotary Splitter
Height/Position Adjustable Sample Station
Drive Engine:
Compressor:
Rotation Torque:
Pull down / Pullback:
Fast Traverse:
Sampling:
6
6BTA5.9-C, 6 Cylinder, 141 kW / 750 Nm
approx Torque @1800 rpm
Sullair 12 Series, 230 CFM / 200 psi
2820 Nm @ 127 rpm
3,170 kg
1 m/s
Small Cyclone with Rotary Splitter
Height/Position Adjustable Sample Station
www.smrs.net.au
Contributors
In a
Drillers
Editor
Sharyn McCulloch
[email protected] | 0404 039 081
A short story about two things in life that
are dear to a true driller’s heart.
Contributors
There’s something ‘bout a drill rig that makes us
feel at home,
Like your favourite painted lady when you hear
her sigh and moan.
And though she might be old and battered, and the
engine’s hard to start,
You know she’s got a heart of gold when you hear
that engine fart.
Sharyn McCulloch | Chris Towsey
Phil Spence | Graeme Wallis
Steve Hearn | Greg Wilson
Lauren Dearing | Lynette Cooper | Shalon
Evans | Shorty and Bob Lane
Denny Hutchison | Mick Pedlow
There’s days she tired and cranky, when nothing’s
going right,
And the pipe gets stuck or she blows a seal, in the
middle of the night
But she’s tried and tested through and through,
she’s been around the traps
She’s felt the hands of a hundred drillers wearing
different company caps.
Sharyn | 0404 039 081
[email protected]
They drive us to distraction, and to the grog as
well.
They were put on earth to haunt us, like a sirens
eerie bell.
Though we curse them day and night, we know
we’ll always love ‘em
They’re in our blood forever, we’re simple drilling
men.
SMRS
Advertising Sales
Editorial Enquiries
[email protected] | 0404 039 081
Art Director
Sam Bell | 0400 122 009
PO Box 1092, Sanctuary Cove Qld 4212
F/T: 07 5514 8597
M: 0404 039 081
W: www.smrs.net.au
By Mick Pedlow.
Mannion Drilling
Cardno Ullman & Nolan
Welldrill
MDP
Easternwell
Budd Exploration Drilling
ACM Exploration
The
Edition -11- 2014
Rig spread
contributors
m a g a z i n e
Feature Profile
GRAEME WALLIS
Managing Director
Wallis Drilling
Health, Safety and the
Pursuit of Happiness
China:
How dependent are we on the
Middle Kingdom?
Aussie Pubs
Keepin’ Up with Shorty and
Bob’s Great Australian Pub
Crawl
The Increasing
Importance of Risk
Assessments to
the Safety of Your
Business
“For the Love of Drilling”
Rig D03 Schramm T685WS Carrier: MAN 8x8
The Magazine of Safety Management and Risk Solutions
Publishers Indemnity:
Those who make advertising placements and/or supply copy material or editorial submissions to The Guardian Magazine, undertake to ensure that all such material does not
infringe any copyright, trademark, defamation, libel, slander or title, breach of confidence,
does not contain anything obscene or indecent, or does not infringe the Trade Practices
Act or other laws, regulations or statutes. Further to the above mentioned these persons
agree to indemnify the publisher and/or its agents against any investigations, claims or
judgements.
www.smrs.net.au
7
Edition 7 - 2013
Mines Safety Bulletin 140
Drowning hazards in open excavations
•
•
inadequate signs to warn people of the
hazards
failure to apply basic risk management
principles, particularly the control of
hazards.
Recommendations
The following control measures should be
considered to reduce the risk of people
drowning in excavations containing water.
•
•
Background
People have drowned at Queensland mines
and quarries from swimming, jumping or
falling into excavations containing water.
•
These include trespassers entering sites
intent on swimming in the excavation and
people jumping off benches into the water
with no knowledge of its depth.
•
The latest such tragedy occurred in
November 2013 when a 16 year old boy
drowned in the water filled quarry excavation
in the above photo.
•
Contributing factors common to many of
these incidents include:
•
•
•
•
sites abandoned or no longer in operation
that have filled with water
inadequate site security controls
poorly maintained security fencing
Ensure sites are adequately fenced to
restrict unauthorised access.
Ensure security fencing is regularly
inspected and any damage repaired
promptly.
Ensure open excavations have adequate
signs identifying the excavation and
warning of the dangers.
When sites are not manned, ensure there
are adequate security measures in place
to deter trespassers. This may include
security patrols and regular
communication with local police.
Ensure adequate procedures are in place
for dealing with trespassers. This needs
to be done in consultation with local
police and signs need to reflect these
procedures e.g. Trespassers will be
prosecuted.
Ensure appropriate risk management
practices and procedures identify the
hazards and suitable controls to address
an open body of water.
Authorised by Chief Inspector of Mines | Phil Goode
Further information contact: Wayne Scott | Inspector of Mines | +61 7 3330 4252
Place alert on noticeboards and ensure relevant people in your organisation receive a copy.
See more safety alerts and bulletins at http://mines.industry.qld.gov.au/
And the hazard database at http://mines.industry.qld.gov.au/safety-and-health/publicationsguides.htm
© State of Queensland, Department of Natural Resources and Mines, 2013.
Edition 10 - 2014
8
Version 1, 28 April 2014
Follow our updates on
www.smrs.net.au
WCSA
Well Control School Australia
W
ell Control School Australia Pty Ltd (WCSA) is a leading provider of accredited well control training. WCSA delivers first-class
training courses globally to the oil and gas industry via online, computer-based, and instructor-led training methods. Training centers
will open in Perth during the fourth quarter of 2014.
WCSA is an affiliate of Well Control School (WCS), which was established in 1979 in New Orleans, Louisiana USA. WCS was one of the first
commercial well control school to offer IADC WellCAP® (International Association of Drilling Contractors Well Control Approved Provider) and
IWCF (International Well Control Forum) certification courses. These certifications are recognised globally and serve as benchmarks in setting
curriculum guidelines for well control training standards.
WCS developed the first IADC WellCAP® accredited e-learning courses known as System 21 Well Control e-Learning. This innovative, ondemand training program provides introductory, fundamental, and supervisory courses in drilling, workover/completion, well servicing (coiled
tubing, snubbing, and wireline) for applicable surface and/or subsea stacks. Taken by thousands of students worldwide, System 21 is an
effective training method to track and measure key performance indicators with recordable reports.
For more information, visit www.wellcontrolschool.com.au. On-Demand IADC Accredited Well Control Training
COMMITTED TO QUALITY...
DELIVERING VALUE!
Well Control School Australia’s System 21 e-Learning Well Control
Training provides online IADC certified courses to prepare you to meet
well control situations, at your convenience. Ideal for beginners and
experienced personnel, System 21 e-Learning courses utilize high-tech
training tools and simulation scenarios to cover over 2,000 topics and
skills for surface and subsea well control, including drilling, workover/
completion, snubbing, coiled tubing, and wireline operations.
Benefits
• Cost effective
• Self- paced
• Available globally at your convenience
• Preparation for real well control situations
• IADC WellCAP® certificate upon completion
• 24x7 technical support
Get started today
Register at www.wcsonlineuniversity.com
Coming soon
Instructor-led IWCF accredited courses and computer-based training labs in
Brisbane and Perth.
FOLLOW US ON
TM
www.wellcontrolschool.com.au
www.smrs.net.au
9
Edition 10 - 2014
PHOENIX ONE
The Ultimate Time Out!
A
crown jewel of the South
Pacific, PHOENIX ONE is a luxury
motor yacht offering packages or
individually customized charters to just
about anyone with their sea legs!
Based on the east coast of Australia, Phoenix
One cruises between the Gold Coast and
its environs, including touring many of the
Pacific’s untouched regions. Phoenix One
offers those on board an unbelievable
experience catering to your every whim, and
leaving you with a truly unforgettable memory.
Did you know that:
• It’s believed that Captain Cook named
the Whitsunday area when, in 1770 he
travelled through the islands on Whit Sunday
(the seventh Sunday after Easter).
• The islands are actually the tips of
mountains that, prior to a melting of the
northern ice cap some 18,000 years ago,
were once a range connected to the mainland.
Today the Whitsundays is one of Australia’s
premier tourist destinations attracting people
from all over the world.
During the months of July to September
Phoenix One, our premier 32 metre luxury
cruiser visits the gorgeous Whitsunday islands
where she charters for day trips and livaboard
cruises.
Operating as a charter vessel for more
than 10 years, Phoenix One has entertained
countless guests, from businesses, holiday
makers and celebrities, all enjoying her
hospitality.
With 4 well-appointed ensuite cabins
sleeping up to 8 guests and equipped with
Jet Ski, hot tub and spacious deck areas, she
is luxury afloat.
As the only vessel of this calibre with a yearly
schedule taking in all the splendour of the
Gold Coast to the Northern Territory, Phoenix
One has the most beautiful destinations right
on her door step.
Edition 11 - 2014
Adding to that, the Whitsundays offer some
of the most picturesque areas on Australia’s
East Coast. Snorkelling, beach cricket and
riding the Jet Ski are favoured among the
more energetic guests on Phoenix One while
relaxing in the hot tub with a glass of wine is
more in line with those who wish to just take
it easy and make the most of what Phoenix
One has to offer.
The Whitsundays is strategically placed to
the Mackay regional mining areas with only
a short trip to Airlie Beach where you will
find Phoenix One berthed during the winter
season. And with the convenience of frequent
flights from all major cities to Proserpine and
Hamilton Island, this makes Phoenix One
easily accessible to local, interstate and
international travellers alike.
Corporate meetings or conferences
Searching for a unique way to treat your
Management team and shareholders/
stakeholders at your next annual meeting or
conference? How about holding your next
board meeting in paradise?
Want to impress potential clients or entertain
a group? Then look no further! Phoenix One
is an idyllic floating 5 Star venue for your every
need.
Catering for up to 8 livaboard or 40 for a
day trip, it is the ideal escapism for the ever
pressed executive team.
You will enjoy delicious food prepared by
the on-board chef accompanied by excellent
wines and served by our attentive and friendly
crew. Consume a cocktail or two and watch
the sun go down over one of the many islands
in this beautiful area.
Humpback whales travel through the region
at this time of the year and during your cruise
it’s almost guaranteed that you will see some
of these magnificent creatures playing in
the warm tropical waters. Mothers teaching
the youngsters the art of breaching and fin
10
slapping, offers many a photo opportunity and
is a sight you won’t forget in your lifetime!
Luxury fishing safaris in the wilderness of
Arnhem Land NT
Do your all-star performers deserve
something a little extra this year?
How about rewarding your top achievers
with a luxury fishing safari customised just for
them!
Phoenix One offers Blue water, estuary
and fly fishing experiences in the Bays of
Arnhem Land and the Wessel islands. Battle
the beautiful barramundi, grapple with a Giant
Trevally or capture a Coral Trout for dinner it’s all on offer in these unspoiled wilderness
areas of the Northern Territory.
Cairns, Lizard Island and the Great Barrier
Reef are also on the itinerary so if you fancy
diving the reef or catching the giant black
marlin during the season the Phoenix One is
your floating hotel for this area.
Getting married or know someone who
is?
Intimate Boutique style Weddings are very
popular on board Phoenix One with guests
loving the backdrop of these stunning islands
while their every wish is catered for by the
crew. If romantic, intimate dinners for up to
16 is your style, or enjoying the company of
40 friends and family is what you have in mind
look no further than Phoenix One for your
wedding day.
Come for a cruise on Phoenix One and you
too, can see what everyone is raving about.
Ph. Lynette 0407 374950
Email: [email protected]
PHOENIX ONE
www.smrs.net.au
DRILLING CONTRACTOR OBLIGATIONS UNDER
THE PETROLEUM AND GAS (PRODUCTION AND
SAFETY) ACT 2004 WORKSHOP
WHO SHOULD ATTEND
Executive Safety Managers
Operators
Site Safety Managers
Safety Advisors / Supervisors
OVERVIEW
The Drilling Contractor’s Obligations under the QLD Petroleum and Gas (Production
and Safety) Act 2004 provides participants with an understanding of the pivotal roles and
responsibilities under the QLD P&G Act 2004, with an emphasis on the statutory reporting and
the management of safety requirements.
Topics covered include:
What businesses
should do to
successfully
manage petroleum and
gas drilling contracts
Application of
appropriate risk
assessment, incident
investigation and
hazard management
techniques
Reporting requirements
under the Petroleum
and Gas Act and
Regulations
Understand your
role and responsibilities,
and the duty of care you
hold on a petroleum
and gas site
Learn about the
elements of the QLD
Petroleum and Gas
(Production and Safety)
Act 2004
• Roles and obligations for:
Executive Safety Managers,
Site Safety Managers, and
Operators;
• SafeOP Audit Tool;
• Incident Reporting;
• Statutory Reporting;
• Auditing and Reporting;
• Simultaneous Operations;
• Safety Management Plans;
•
•
•
•
Risk and Hazard Management;
Skills, Training and Competency;
Overlapping tenure requirements;
Principal Hazard Management
Plans;
• Emergency Response
Preparedness; and
• Statutory Appointments and
Communication.
INCLUDES: Participant Training Manual; Certificate of Completion;
Catering – morning and afternoon tea, lunch, and refreshments; and all
stationery. Attendees will receive a workshop manual and SMRS Certificate of
Attendance.
WHERE:
The Broncos Leagues Club in Red Hill, Brisbane. Free on-site parking.
Wheelchair access and amenities provided.
BOOKINGS: Call: 07 5514 8597 or 0404 039 081 Email: [email protected]
Website: www.smrs.net.au
START DATE: The next workshop will be: Thu 28 August 2014 Time: 8:30am
Can’t make it to the
workshop?
SMRS can come to
you!
Contact us to organise
your in-house
workshop today.
Do you have an Appetite?
Risk Appetite
A Definition
According to ISO 31000, Risk Appetite is, “The amount and type of risk that an organisation is prepared to pursue, retain or take
also known and measured as residual risk.” The challenge with risk appetite is how to implement and enforce it, making it relevant to
business units on a day-to-day basis, meaning linking risk appetite to business decisions and having appropriate business metrics
to measure it. That’s where risk tolerance comes in.
Risk Appetite & Tolerance
Both risk appetite and risk tolerance set boundaries of how much risk an entity is prepared to accept. Risk appetite is a higher level
statement that considers broadly the levels of risks that management deems acceptable while risk tolerances are narrower and set
the acceptable level of variation around objectives. For instance, a company that says that it is does not accept risks that could
result in a significant loss of its revenue base is expressing appetite. When the same company says that it does not wish to accept
risks that would cause revenue from its top 10 customers to decline by more than 10% it is expressing tolerance. Operating within
risk tolerances provides management greater assurance that the company remains within its risk appetite, which, in turn, provides a
higher degree of comfort that the company will achieve its objectives.
www.smrs.net.au
Edition 11 - 2014
Effective Risk Assessment is
Increasingly Important to the
Safety of any Business
Today’s business place is an ever changing beast – always unpredictable and becoming more complex
every day. By its very nature, the business place is loaded with risk.
H
istorically, risk has been viewed as a
necessary evil that must be mitigated
or removed where possible. In the last
decade, the growth of regulatory requirements
has forced businesses to consume significant
resources in the name of risk identification
and management, leading shareholders to
examine whether businesses have the right
controls in place to do the job appropriately.
In the current global economic environment,
identifying,
managing,
and
exploiting
risk across an organisation has become
progressively more important to the success
and longevity of any business.
Risk assessment provides a mechanism for
identifying which risks represent opportunities
and which represent potential pitfalls.
Done correctly, a risk assessment gives
organisations a clear view of variables to which
they may be exposed. A good assessment
is anchored in the organisation’s “risk
appetite” and “risk tolerance”, and provides
a basis for determining risk responses. A
robust risk assessment process, applied
consistently, empowers management to
better identify, evaluate and exploit controls to
ensure effective and efficient operations and
regulatory compliance.
Whilst organisations have been conducting
risk assessments for years, many still find it
challenging to extract their real value. Risk
assessments can be mandated by regulatory
demands, and focus on such processes
as operational risk management including
activities and plant, monitoring of client
accounts, and internal control over financial
reporting. They can also be driven by an
organisation’s own goals such as business
development, talent retention and operational
efficiency. Regardless of the scope or
mandate, risk assessments must bring
together the right parties to identify events
that could affect the organisation’s ability to
achieve its objectives, rate these risks, and
determine adequate risk responses.
Risk assessment discipline evolves and
matures over time. Organisations typically
start with a broad, qualitative assessment and
gradually refine their analysis as they collect
and analyse sufficient and relevant data to
support decision making and allocation of
resources.
Edition 11 - 2014
Purpose and Applicability
Risk assessment is intended to provide
management with a view of events that could
impact the achievement of objectives
, and can be conducted at various levels
of the organisation. The objectives and events
under consideration determine the scope
of the risk assessment to be undertaken.
Some examples of frequently performed risk
assessments include:
• Strategic Risk Assessment. Evaluation of
risks relating to the organisation’s mission
and strategic objectives, typically performed
by senior management teams in strategic
planning meetings, with varying degrees of
formality.
• Operational Risk Assessment. Evaluation
of the risk of loss resulting from inadequate
or failed internal processes, people, and
systems, or from external events. In certain
industries, regulators have imposed the
requirement that companies regularly identify
and quantify their exposure to such risks.
• Project Risk Assessment. Evaluation of
the risk factors associated with the delivery
or implementation of a project, considering
stakeholders, dependencies, timelines, cost,
and other key considerations.
• Compliance Risk Assessment. Evaluation
of risk factors relative to the organisation’s
compliance obligations, considering laws
and regulations, policies and procedures,
ethics and business conduct standards,
and contracts, as well as strategic voluntary
standards and best practice to which the
organisation has committed.
• Financial Statement Risk Assessment.
Evaluation of risks related to a material
misstatement of the organisation’s financial
statements through input from various parties
such as the controller, internal audit, and
operations.
• Market Risk Assessment. Evaluation of
market movements that could affect the
organisation’s performance or risk exposure,
considering interest rate risk, currency risk,
option risk, and commodity risk.
• Customer Risk Assessment. Evaluation
of the risk profile of customers that could
potentially impact the organisation’s reputation
and financial position.
• Supply Chain Risk Assessment. Evaluation
12
of the risks associated with identifying the
inputs and logistics needed to support the
creation of products and services, including
selection and management of suppliers.
• Product Risk Assessment. Evaluation of the
risk factors associated with an organisation’s
product, from design and development
through manufacturing, distribution, use, and
disposal.
Every organisation should consider what
types of risk assessments are relevant to its
objectives. The scope of risk assessment that
management chooses to perform depends
upon priorities and objectives.
Common challenges to effective risk
assessment
While risk assessment provides the means
to identify and address potential risk factors,
failure to perform assessments effectively
can lead to missed opportunities, both to
avoid and capitalise on risk events. Common
business challenges include the following.
• Risk assessment is viewed as a sporadic
initiative providing limited value. The owner of
a risk assessment must clearly communicate
its purpose, process, and expected benefits.
The right parties must be engaged to
ensure relevant input, informed assessment,
and meaningful and actionable results.
Furthermore, the assessment must be a
repeatable process that integrates into regular
business practices, adapts to change, and
delivers more than one-time value.
• The amount of information and data
gathered is difficult to interpret and use.
Failure to effectively organise and manage
the volume and quality of assessment data
makes interpreting that data a challenge.
Tools, templates, and guidance are necessary
to ensure consistency in data capture,
assessment, and reporting.
• Results of the risk assessment are not
acted upon. Lack of clarity and accountability
around objectives frequently leads to a failure
to follow through on assessment findings. It is
therefore important that the risk assessment
process begins by clearly articulating
objectives, designating their ownership, and
linking them to the risks being assessed.
Likewise, owners should be assigned to the
action items related to risk responses as well
as to milestones and timelines for completion,
www.smrs.net.au
which serve as triggers for any necessary
follow-up.
• Over-controlling risk can be costly and stifle
innovation. An organisation is responsible for
ensuring that its controls are designed and
operating effectively, focusing on key controls
to the extent possible. It must also determine
how much risk is acceptable and how much
variability it can tolerate. It must prioritise risk
responses based on a cost/benefit analysis
and availability of resources. Lack of an
effective risk assessment process and defined
risk tolerance could result in an organisation
over-controlling a risk, which could place an
excessive cost burden on the organisation
and/or stifle its ability to seize opportunities.
• Risk assessments become stale, providing
the same results every time. Without refreshing
their data capture, process, and reporting
from time to time, risk assessments may lose
relevance. Breakdowns may occur without
triggering key risk indicators to management.
Organisations must continuously challenge
themselves to build upon the information and
data collected. They must continually update
their assessment techniques and mechanisms
in order to refine their analyses of risks, have
greater predictability over risk events, and
create better response mechanisms for
dealing with surprises.
• Risk assessment is added onto day-today responsibilities without being integrated
into business processes. While tools and
templates are helpful to ensure consistency
in data capture, assessment, and reporting,
it is important that the risk assessment
process be anchored and integrated into
existing business processes. This may include
building trigger levels into existing systems to
raise potential issues to management as part
of daily operations, or including an explicit risk
assessment discussion as part of business
planning, execution, and evaluation meetings.
Risk assessment then becomes a discipline
within a process rather than an additional
process bolted on top of existing ones.
• Too many different risk assessments are
performed across the organisation. A shared
approach should be defined for performing
risk assessments, using common tools or
templates, common data sets (e.g., risk
categories, libraries of risks and controls,
rating matrices), and flexible hierarchies
to enable streamlined data capture, an
integrated assessment process, and flexible
reporting. This enables a reduction in the
number of risk assessments requested of the
business or operating units and an increased
ability to rely on integrated processes while
still meeting the risk requirements of the
various stakeholders. In order to develop
these integrated processes, an organisation
should inventory its current risk assessment
processes and then share best practices and
identify overlaps and gaps.
• Risk assessment will not prevent the next
big failure. As risk assessment provides a
means for facilitating the discussion around
key risks and potential control failures, it helps
reduce the risk of breakdowns, unanticipated
losses, and other significant failures. Effective
governance over the process—in particular
independent review by risk managers—is
key to ensuring that risks are adequately
assessed and that controls are not sidestepped to cover up certain information.
Risk assessments need to summon the right
subject matter experts and consider not only
past experience but also forward-looking
analysis.
• Putting key principles to work. Customers,
regulators, investors, and other stakeholders
expect organisations to manage risk effectively,
with a robust risk assessment process serving
as a cornerstone to their risk management
programs. The challenges listed above can
impact organisations through business
disruption, missed opportunities, financial
penalties, or damage to reputation and
brand value—but following key management
principles can help organisations avoid these
challenges. With organisations facing a fluid
and seemingly endless array of risks and
obligations, leveraging these key principles
can provide the consistent platform necessary
to effectively manage these risks in a costeffective and sensible way.
By Sharyn McCulloch
PHOENIX
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water fishing. All whilst experiencing standards of quality
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3 purpose built Stacer Barra Pros offer seating
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Phoenix One Boat Charters www.phoenixone.com.au
www.smrs.net.au
13
Edition 11 - 2014
Hydraulic
Systems
Basics
The Effects of WATER in
Oil on Equipment
by Greg Wilson
I
n all cases water in lubricating oils whether
they be engine, gearbox or hydraulic is bad
news. Catastrophic failures in essential
equipment drivelines lead to operating cost
blowouts.
Water in lubricants rapidly accelerates
failure of critical components depriving
moving contact surfaces of lubrication. The
ongoing issue results in:
• Oxidation, rust, and corrosion increases,
raising levels of contamination
• Wear caused by loss of a lubricating oil film
increases bearing failure
• Shortened life of components means
unscheduled rebuilds of drive lines
• Standard oil filtration systems are
compromised as water reacts with filter
media
The amount of water required to render a
tank of oil useless is minimal.
Measuring of Water (contaminants) in Oil
Units are expressed in Parts Per Million
(ppm), a test result above 100 ppm requires
investigation.
In a fluid 1 ppm is equal to one milligram
per litre, 5000 ml is approximately equal to 1
teaspoon of fluid.
One teaspoon of water per litre of oil
is enough to cause major problems if left
untreated.
Detection
Requirement to check for contamination
should form part of a pre-start or other formal
inspection process. A visual check of the oil
Edition 11 - 2014
level sight glass could show cloudy liquid, or
dip sticks show a rising level of milky oil. It may
already be too late if you are finding this.
Regular oil sample lab test results will
indicate all levels of contaminates including
water. Take a sample every 60 days if unsure
of your requirements, then 90 days once
you are confident you have it under control.
Make sure the equipment manager or relevant
person has access to this information and your
lubricants supplier can usually recommend an
independent test laboratory if in doubt.
So how do we deal with it?
Options for treatment of oil containing
water include:
If the volume of oil is relatively small, say
less than 1000 litres it may be more efficient
to simply change out the old oil for new and
keep repeating this process on a regular basis
until the fluid system is flushed clean. This is
usually the case with mobile equipment.
For larger systems with thousands of litres
of oil the preferred method is to set up an off
line filtration unit that does not interfere with
the normal use of the machine.
Off line units employ various technologies
including:
• Centrifuge units that spin your oil clean
using the G forces developed to separate
contaminates by weight.
• Absorption filter media where replaceable
filter element(s) are fed by a low flow off
line pump unit that eventually turns over
the entire contents of the reservoir.
• Vacuum dehydration units that separate
14
water, gases and particles of
contamination in a hi-tech application.
The types of filtration equipment as
mentioned above are available as portable
units able to be setup for onsite work.
Prevention of water / moisture entering
stored oil systems
As the volume of fluid in a reservoir changes
level it must draw in air from the atmosphere.
As air contains a moisture component the
oil becomes contaminated with particles
contained in the air.
Hot oil cooling down over night also
draws moisture into the oil, to address this,
breather’s that contain fine filters and moisture
absorbing crystals are used. Also make sure
reservoir inspection plates and joints with tank
mounted components are sealed air tight
against ingress of rain water.
A flexible diaphragm can also be fitted
between the breather and the oil surface
under the reservoir lid to eliminate contact
with the outside air.
Drums of new oil must be kept sealed up
to the point of filling the oil reservoir to avoid
ingress of moisture. Be suspicious of oil
drums with loose screw caps as they may
contain contaminated oil.
Remember the hydraulic drive or lubricating
system is only as good as the condition of the
oil.
Greg Wilson
Manager
Actfix Hydraulics
Ph: 0419 742 264
www.smrs.net.au
Or are they?
By Phil Spence
I
f you started in the Drilling industry a couple
of years ago, you probably couldn’t help
but think you’d won the jackpot. You would
have seen high wages and cushy rosters,
great camps and great food, and if you didn’t
like working where you were you just moved
on; it all seemed too good to be true! Well
guess what? It was!! The days of pick and
choose your employer are over and just like
musical chairs, you better keep your attention
heavily focussed on the chair you want, and
even then don’t be surprised if your chair is
taken out of the game.
If you are lucky enough to be involved with
a long term project, then you should do your
best to keep that position. Contracts involving
more than a few drill holes are becoming rare,
so just like we used to do before the “boom”,
take the work while it’s there.
Anyone who has been in this game a while
will know that the boom we just had was a
good one, and probably the best I have seen
in my 25 years in the drilling game. Some old
school guys say the best was mid-70’s to
mid-80’s, so that’s 20 years before this boom
started and I hope it’s not 20 years before it
kicks on again or I will be watching through the
geriatric ward window! But what we all must
understand is that a boom is not the norm in
the industry. Booms don’t last forever, it’s just
not sustainable. The cycle we find ourselves
in now is not necessarily a bust; it’s more like
the lull before everything returns to a normal
situation (minus a boom). Well maybe it’s a
little bit worse than that, but not by much.
So what do you do if you started working
in this industry in say 2010, and were a
supervisor by 2012 and now you find yourself
out of work? The best thing you can do if you
want to stay in this game is ride it out anyway
you can. That means taking a job as a Driller,
offsider, water truck driver or anything else
that keeps you close to the action because
let’s face it, you may have been made a
supervisor (or driller) out of necessity rather
than because of your experience, and that
certificate you have doesn’t mean that you
have any real experience.
That’s not a dig at fresh personal in the game,
just a reality. And as I have written before, more
emphasis has been put on reporting and risk
assessments when training men, rather than
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of the finer technical points and organisational
skills required for productive drilling. I am sure
that a heap of great people have joined the
industry in the past few years and hope that
they can hang on just a little while longer.
If you started today, in 2014, you wouldn’t
get to drive the Toyota (or Great Wall ☺) for 12
months let alone get on the levers. So those
of you who adjust your expectations as far as
position and wages go will come out the other
side far more valuable than you went in. And
those of you who think that the last few years
is all you will accept, well good riddance.
15
This cycle may last a few years yet, and
those of you sticking it out at the moment will
be the foundation that the industry builds off
for the next busy period. So here’s looking
forward to a safer and more professional start
up when things come back for us - hang in
there, and keep going around and down
when you can.
Here’s also hoping that the greenies don’t
come up with an alternative to good old
Carbon based energy, and we get another
romp .
Edition 11 - 2014
How dependent are we on
the Middle Kingdom?
Chris Towsey, Executive Director, Citigold Corporation Limited.
C
ommentators seem to focus to an
extraordinary degree on how the
mining industry’s business relationship
with China controls mining’s fate. According
to the popular press, when China sneezes,
Australia dies of pneumonia. To quote
Moran Zhang of the International Business
Times (April 04 2014, www.ibtimes.com),
“The China resources boom is over, leaving
Australia with no other option but to rebalance
its economy…. China’s investment boom
has been the key driver of stronger demand
for copper, iron ore and steel over the past
decade. As a result, the first set of economies
affected by a dramatic slowdown would be
big commodity producers that sell to China or
rely on its demand indirectly. Australia, which
dispatches more than a quarter of its exports
to China, has already felt the pain.”
But is it true?
Certainly, China is a major economy. With a
population of the People’s Republic of China
estimated at 1.4 billion in 2014 and growing at
2.7% or 37 million a year, the Middle Kingdom
is adding about 1.7 times the entire population
of Australia to itself each year. With successful
business trading, the middle class is growing
and consuming more of the trinkets of an
affluent society. There is also pressure to build
accommodation for the increasing population
and to feed them. The expanding businesses
need premises and factories, so concrete and
steel are in demand. Australia is prudent to
ensure it stands available to supply China with
the two main components of steel – coal and
iron ore.
However, God, in his wisdom, or as a bit
of fun, put Australia’s coal on one side of the
country and the iron ore on the other side –
91% of the iron ore is in Western Australia
and 8% in South Australia. Queensland and
Edition 11 - 2014
NSW produce the coal and Western Australia
ships out the iron ore. While WA has a fairly
easy shipping run to China – the pirates in the
Malacca Straits don’t seem to fancy red dust
– God ran the Great Barrier Reef for 2,000
kilometres down the Queensland coast to
increase the challenge for the east coasters.
WA certainly has China as a major buyer of its
iron ore, but China, while a significant buyer
of Queensland’s coal, is not our prime export
target – we export more to Japan and nearly
as much to India, with Korea hot on their
heels. The Australian economy is still strong.
HSBC Chief Economist Paul Bloxham,
quoted in Zhang’s article above, said, “Mining
investment is now falling, after a substantial
ramp-up in recent years … but low interest
rates are supporting a rise in housing prices,
residential construction and consumer
spending, which is rebalancing growth.”
Construction, especially major projects, is
the driver for metal and non-metal commodity
prices as highways, bridges, dams,
supermarkets and residential properties
consume aggregate, concrete (limestone),
steel (iron ore and coal), copper, silica as glass,
zinc and aluminium. Consumer spending
drives consumption of cars, requiring steel,
alloys of aluminium, magnesium and zinc
and lead for batteries, plus burning coal
for electricity to drive air conditioners. Low
interest rates are the key to getting both
consumers and businesses to spend money
and stimulate the economy. A quick look
at one bank’s web site offered a home loan
variable interest rate of 5.23% per annum, but
if you look at their table of future fixed interest
rates, they offered:
16
1 year
2 years
3 years
4 years
5 years
10 years
Interest Rate
4.89% pa
4.94% pa
5.15% pa
5.54% pa
5.79% pa
7.74% pa
Table 1. Fixed interest rates being offered
by one of the four major banks as at 3
July 2014, compared to their current
variable rate of 5.23%.
Remember, a bank’s purpose is to rip as
much money as possible off you to keep
their shareholders’ dividends up and their
own salaries and bonuses flowing, so they
will tempt you to take up a fixed rate that
will benefit them more (and you less) than if
you stayed on your variable rate. So the guys
who know and control interest rates, the
“banksters”, are offering fixed rates that are
LESS than the current variable rate for the
next three years, indicating they believe that
interest rates will fall and be less than their
current variable 5.23%, and will still be below
5.15% in three years’ time (2017) so they are
still ahead of the game making a profit on your
5.15%, but variable rates will be below 5.15%.
They then predict interest rates will rise above
in four years’ time (2018) and beyond, so
that in 2018 when you are paying 5.54%,
the guys on the variable rates will be paying
slightly less. This marks 2018 as the year
when everything goes to hell – interest rates
will be going up, demand for commodities
drops off as construction dies off, prices go
down and the mining companies cut back on
exploration.
Tracking how many geologists are out of
work gives you an idea of how your drilling
business may be going. If people aren’t
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employing geologists, they’re not exploring
and there is no exploration drilling. The
Australian Institute of Geoscientists just put
out the results of their last unemployment
survey in June 2014 (released 3 July
2014). Their June 2014 survey attracted an
excellent response. In all, 1,069 geoscientists
completed the survey – more than one in
eight geoscientists in Australia according to
the most recent Australian Census figures.
It showed unemployed and under-employed
geologists at their highest levels since the
Global Financial Crisis in 2008, but the good
news is that the number of unemployed rockhoppers has started to drop off, as shown
below in Figure 1. More geos employed
means more drilling (in a little while)! The next
two to three years are still looking good, but
get your rig paid off before late 2017.
Certainly, times have been tough in the past
two years. The Australian Bureau of Statistics
report No. 8415 for 2012-2013 showed the
following data and key points:
KEY POINTS
• During 2012-13, sales and service income
for the Australian Exploration and other
mining support services industry fell 4.7%
between 2011-12 and 2012-13.
• Total income fell 11.6% over the same
period.
• Employment fell 5.1% to 46,350 people at
end June 2013,
• Wages and salaries rose 2% (so your
costs went up).
• Total expenses fell 0.1% (you started costcutting).
• People were running at a loss overall.
Operating “profit” before tax fell from a
loss of $894m in 2011-12 to a greater loss
of $2.8b in 2012-13.
• EBITDA fell from an almost break even
position at -$28m in 2011-12 to a loss of
-$540m in 2012-13.
• Industry value added declined by 5.4%,
meaning $6.4b was wiped off our industry.
Will China fix this?
As China manufactures more steel from
Australian imported coal and iron ore, it will
start to recycle it. The World Steel Association
estimates that because steel is magnetic
and easily recoverable, about 80% of postconsumer steel is recycled. By sector, steel
recovery rates are estimated at 85% for
construction, 85% for automotive, 90%
for machinery, and 50% for electrical and
domestic appliances. Australia has 25% of
the world’s iron ore economically developable
deposits, followed by Brazil with 17%, Russia
14% and China 13%. In 2012, WA produced
505 Mt (97% of Australia’s total) with SA
producing 10 Mt. Some 494 Mt was exported
in 2012, up 13% on 2011, with Australia
consuming 21 Mt.
In Queensland coal, in 2011–12 Japan
remained the main export destination for
www.smrs.net.au
Figure 1. Unemployed and under-employed geoscientists from 2009 to June
2014. Source: Australian Institute of Geoscientists.
Queensland coal and accounted for 46.8 Mt
of export sales, down slightly from 49.3 Mt in
2010–11. China ranked as the second
largest buyer at 26.9 Mt with India filling third
place with 25.3 Mt, just ahead of Republic of
Korea in fourth position at 23.3 Mt. In 2011–
12, Queensland sold a total of 187.6 million
tonnes (Mt) of coal, of which 164.86 Mt, worth
A$30.94 billion (free-on-board basis), were
exported to some 30 countries.
Exports consisted of 118 Mt of metallurgical
coals with the remaining 46.8 Mt being
thermal coal. An additional 20.5 Mt of thermal
coal were supplied to domestic markets in
Australia including 18.6 Mt to markets within
Queensland. Markets in Asia account for over
80 per cent of sales.
Figure 2. Top four export destinations for
Queensland coal.
Indicator
2011-12
2012-13 Employment at end June
no.
48 822
46 350
Wages and salaries
$m
4 814
4 911
Sales and service income $m
15 936
15 189
Total income
$m
16 910
14 951
Total expenses
$m
18 016
17 997
Operating profit before tax $m
-894
-2 783
Earnings before interest,
$m
-28
-540
tax, depreciation and amortisation
Industry value added (IVA) $m
6 732
6 366
Change from
2011-12 to
2012-13 %
-5.1
2.0
-4.7
-11.6
-0.1
211.2
1 859.0
-5.4
Table 2. Exploration and Mining Support services data 2012-2013 (Source: ABS – Report
8415. Mining Operations, Australia 2102-2013, 4 June 2014).
17
Edition 11 - 2014
CHINA CONT.
In terms of total exports of all goods and
services in all industry sectors, Australia
exports $300 billion in goods (83%) and
services (17%).
China is a major player. It accounts for 37%
of the Top 10 export destination markets for
goods and 19% of services.
So Japan is our biggest recipient of coal,
and India and Korea are close to overtaking
China. Another interesting factor is how you
do business with Asian countries. Japan is by
far the preferred country for most Australian
companies, according to industry gossip.
Japanese companies are generalised by
some as incorporated legal entities, often run
by elder statesmen who have the Japanese
Bushido sense of honour. That’s not to say
they are an easy target – they are shrewd
business people who can drive a tough
bargain, but it’s usually fair. A fair deal is
usually one where neither side is delighted,
or got exactly what they wanted – there is a
compromise. They enter into contracts, the
contracts are honoured and when contracts
go to court, you have a chance of justice, or at
least a proper ruling in law. According to a few
unsupported anecdotal comments, Chinese
“companies” are often basically government
departments of the federal or provincial
governments. People have commented that
while the individual people you deal with
are reliable, trying to sue the “company”
in a contract dispute is effectively suing the
Chinese government – you are on a hiding to
nothing with Buckley’s chance of getting an
enforceable result. Business dealings with
India seem to be variable.
Figure 3. Australia’s total
export proportion of goods and services.
CONCLUSION
While China is a significant business
partner, there are sufficient alternate markets
that Australia is not dependent on it. Japan
has been a consistently reliable market for
commodities and a major export destination,
India is poised to at least match and even
overtake China as a consumer of our exports,
and is closer with lower total freight costs.
Korea is also a significant player on the
sidelines ready to run on.
The Australian domestic market remains
the major driver of mining services demand
within Australia, and the outlook for the
next three years appears to be improving.
The unemployment rate for self-employed
geologists is improving. Low interest rates
are being forecast until 2017 but in 2018
and beyond rates are predicted to rise,
slowing exploration services demand with
the inevitable downturn for contract and
consultant geologists and drillers.
Figure 4. The Top 10 export
market destinations for total Australian goods.
Figure 5. The Top 10 export market
destinations for total Australian services.
Edition 11 - 2014
18
www.smrs.net.au
The Secret
Do you wish to make the mountains bare their head
And lay their new-cut forests at your feet?
Do you want to turn a river in its bed,
Or plant a barren wilderness with wheat?
Shall we pipe aloft and bring you water down
From the never-failing cisterns of the snows,
To work the mills and tramways in your town,
And irrigate your orchards as it flows?
We were taken from the ore-bed and the mine,
We were melted in the furnace and the pit—
We were cast and wrought and hammered to
design,
We were cut and filed and tooled and gauged to fit.
Some water, coal, and oil is all we ask,
And a thousandth of an inch to give us play:
And now, if you will set us to our task,
We will serve you four and twenty hours a day!
It is easy! Give us dynamite and drills!
Watch the iron-shouldered rocks lie down and
quake
As the thirsty desert-level floods and fills,
And the valley we have dammed becomes a lake.
We can pull and haul and push and lift and drive,
We can print and plough and weave and heat and
light,
We can run and race and swim and fly and dive,
We can see and hear and count and read and write!
But remember, please, the Law by which we live,
We are not built to comprehend a lie,
We can neither love nor pity nor forgive.
If you make a slip in handling us you die!
We are greater than the Peoples or the Kings—
Be humble, as you crawl beneath our rods!Our touch can alter all created things,
We are everything on earth—except The Gods!
Would you call a friend from half across the world?
If you’ll let us have his name and town and state,
You shall see and hear your crackling question
hurled
Across the arch of heaven while you wait.
Has he answered? Does he need you at his side?
You can start this very evening if you choose,
And take the Western Ocean in the stride
Of seventy thousand horses and some screws!
Though our smoke may hide the Heavens from your
eyes,
It will vanish and the stars will shine again,
Because, for all our power and weight and size,
We are nothing more than children of your brain!
The boat-express is waiting your command!
You will find the Mauretania at the quay,
Till her captain turns the lever ’neath his hand,
And the monstrous nine-decked city goes to sea.
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By Rudyard Kipling
19
Edition 11 - 2014
Velseis seismic crew enjoying a
Russian winter
Health, Safety and the
by Steve Hearn
V
elseis is a service provider to the resource
sector, carrying out subsurface seismic
imaging for coal, gas and petroleum.
We do a lot of driving, use some reasonably
large hydraulic equipment, and regularly work
overseas and in remote locations – obviously
plenty of scope for health and safety to be
front and centre. What follows are a few
thoughts regarding our pilgrimage towards a
workable and rewarding safety management
system.
A Historical Perspective
I started in the seismic industry in the early
80s working for one of the big multi-national
companies. At that time there weren’t any
formalised systems in place. Site inductions,
if they happened, were three minutes rather
than three days. There was no concept of
vehicle compliance, and fitness-for-work
had yet to be invented. I recall on my first
seismic crew being amazed at the resilience
of the workers when it came to partying fairly
seriously every night, but emerging seemingly
unscathed the next morning for a huge days
work.
Despite the seemingly relaxed approach to
most things, I don’t recall there being notably
more incidents than today. It’s possible that
in the absence of a formalised protective
Edition 11 - 2014
umbrella, the workers tended to think more
about what they were doing, and how best
to look after themselves. In practice that
system was pretty effective, but of course
competence could only really be verified by
direct observation or word of mouth.
Two Steps Forward, Two Steps Back
When I arrived at Velseis as Chief
Geophysicist in 2000, the health and safety
revolution was just beginning. At the time
Velseis had a strong verbal reputation for
technical capability, and also for practical
aspects including logistics and safe operation.
I am sure this was largely due to the general
capabilities of a very experienced staff. In
retrospect our senior staff, including myself,
were not overly enthusiastic about the need
for more formalised systems. It seemed to go
against our inherent company personality of
flexibility and lateral thinking.
One by one, however, our clients wanted
more formalised demonstrations of our
claimed competence in safety matters. Where
once prestart meetings were dominated
by technical discussions, more and more
the meetings were dominated by safety.
Obviously our managers were far too busy
to get seriously involved! I suppose following
accepted wisdom, first a consultant, and
20
then a safety manager were engaged. Good
formalised OH&S qualifications, but no
understanding of our operations, or how our
people thought.
I remember wading through numerous
bloated and confusing safety documents, and
generally viewing the process as something
of a distraction from the main game which
was to me more about technical excellence.
Similarly it was clear that our field workers
were not really engaging in the process. How
could they – the approach being taken was
far too esoteric.
Crossing the Rubicon
By about 2005, we’d accumulated a lot of
documentation, compiled (and appreciated)
mainly by the safety manager. We’d had
a couple of safety audits and they hadn’t
been particularly pleasant or successful. (I
don’t think we were that special – I know a
few other companies who were struggling
with the transition at the time.) I had just
been appointed MD. Now I was expected to
sit in on the audits, but I had only a limited
understanding of what was required – like a
good manager I was planning to delegate this
one! Bit by bit, however, I became increasingly
frustrated with the apparent impositions of our
clients, but even more so with our seemingly
www.smrs.net.au
Envirovibe seismic source working
in the Hunter Valley
Pursuit of Happiness
convoluted approach to the topic.
In retrospect, fortuitously, our Safety
Manager at the time decided it was time to
move on. This provided the watershed that
was needed. I had to make a decision as to
the way forward and basically thought ‘This
isn’t going away. But surely it doesn’t need
to be this complicated’. Clearly it was time to
bite the bullet. I made a conscious decision to
actively engage in the process and effectively
take control. I junked most of what we had,
and I started writing myself, this time using
simple English. First the Charter, then the
Policies, next one by one the main Company
Procedures. We appointed not a professional
safety person, but in something of a gamble,
one of our field geophysicists who wanted a
change and a challenge. I told him what was
required. ‘Keep it practical. Keep it simple.
Make it all as easy as possible for the guys in
the field. If I can’t understand what you come
up with then it needs to be simpler.’
Despite my newfound zeal, I was
not prepared to accept that safety was
necessarily all that we did. We changed the
acronym of our emerging system to QHSE
(for quality, health and safety, environment).
Our initial focus has necessarily been on
the middle two letters, but our vision is an
integrated management system which also
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satisfies our technical inclinations. A simple
example - our Task Procedure for Planting
Geophones covers not only how to plant the
device without incurring back strain, but also
how to plant it such as to ensure high-fidelity
recording of sound waves.
Onwards and Upwards
Our company conversion was about 7 or 8
years ago. Since then there has been quite a
learning curve for all involved, but the whole
atmosphere around the topic has become a
lot brighter. As soon as our internal approach
and attitude turned the corner, our audits
suddenly seemed less daunting. Our two
main external auditors are no longer feared
intruders, but are valued sounding boards for
our sometimes unorthodox methods.
We still have plenty of frustrations. Here are
a couple of recent examples. A supervisor
called me last week and told me that he
wanted to give me an ‘internal incident report’
and explained that he wasn’t intending to
pass it on to the client on site. Although it
was a relatively minor incident, I had a mild
explosion and reminded him that we report
everything. The supervisor then explained his
initial reticence to report. At the startup toolbox
the client rep had advised “We don’t want any
incidents at all on this job – one incident and
21
you will be kicked off site”. The subtext was
pretty clear. Following my mild rebuke, the
supervisor reported, and of course we weren’t
kicked off site. But we’ve worked hard to get
our supervisors on side - that sort of attitude
from the rep of one of our biggest clients does
not help at all.
The second example came just today as
I was about to write this article. One of our
QHSE admin people asked me if I would read
and sign off a number of work procedures
which had been supplied by a client for
working on their site. The procedure on top
of the pile was entitled “Safe Operation of a
Mattock” - it was 13 pages long. Obviously
there is more to the task than what my dad
showed me.
Which brings me to the distillation of my
15 years of thinking about the topic of health
and safety. It is important but it’s not rocket
science. Keep it simple. Get personally
involved.
We haven’t yet found true QHSE happiness,
but we have a much better idea of where it
might be hiding.
Steve Hearn
MD and Chief Geophysicist
Velseis Pty Ltd
[email protected]
Edition 11- 2014
For the
“In the early morning on the
dew kissed tundra
A mighty engine roars
beneath the crisp blue sky
In a land sometimes harsh,
with trials asunder
This is my world, my rig, my
life”
By S. McCulloch
RIG 2 Fraste FS 500
Carrier: MAN 8x4 truck
50 ton pullback machine
Edition 11 - 2014
16
www.smrs.net.au
Rig MD3 Bournedrill Multipurpose
Carrier: Volvo FM1299A
Capacity: 1000mtrs HQ
of Drilling
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RIG CUN 008 is an Explora 50 Series
Carrier: 4x4 Hino Truck.
Drills to 30m Depth
100mm solid flight auger, washboring and
NMLC diamond coring
17
Edition 11 - 2014
MDP REELSAFE 1000
Carrier: Hino FE & FG
Pumping capacity up to 80lts / sec from 100m depth
RIG DR 24 Foremost (Dual Rotary)
Carrier: Mercedes Actross 8x8
Dual Rotary Air/Mud and DTH Hammer:
Up to 550m (6” to 8”)
Up to 480m (10” to 14”)
Up to 350m (16”to 20”)
Up to 180m (22” to 24”)
Edition 11 - 2014
24
www.smrs.net.au
RIG BED 10 SANDVIK DE840
Carrier: Mercedes Actros 8 wheel drive
HQ Depth 1345mtrs
NQ Depth 2000mtrs
RC Depth 550mtrs
Old Drillers
Old Drillers are a funny bunch; some say
they’ve lost the plot
When the hole’s not doing what it should;
they cuss and swear a lot
They’ll toss stuff at offsiders; who keep
right out the way
And will punch their bloody lights out; if
they want to have their say
Some say their cranky bastards; that no one
will deny
When the hole has gone to bloody shit; keep
your mouth shut or you’ll die
Until the rods get free again; or you start to
see returns
Keep right out the bloody way; or he’ll ream
ass till it burns
They’re mongrel tough old bastards; but
don’t ever tell em that
They’ll give respect to ladies; and always
dip their hat
A completely different breed of bloke; when
things are runnin fine
Spinning yarns of far off places; and tales
from far gone times
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He’ll shout a beer while cooking; around the
fire at night
Or put a snake into your swag; just to give a
bloody fright
He’s always last to dim the lights; and
first one up at the dawn
He’ll have some damper cooking; the billy
boiling while we yawn
If the rig is every broken; he can fix it every
time
With a piece of wire; some nuts and bolts a
slab of greasy slime
These old drillers are becoming rare; in the
outback of today
But their ghosts still live on out there; and
if quite you’ll hear them say
There are two things to beware of mate if
Drilling is your choice
Snakes and bloody geo’s must be avoided at
all cost!
Denny Hutchison
06/06/2014
Rigs
Show me a grid with the rigs towered
up in the mud and dust and the heat
The smell of hydraulics the sweat from
the crew and the engines steady beat
Some are quite impressive, looking so
rugged and tough
Ready to drill to eternity to find that
well sought after stuff
Out there are old roughies, held
together with chewy and wire
But some drillers love the old buggers
to satisfy their desires
D. Hutchison
To while away our time at night,
we drill and ream and case till light
With misty breath and hearts forlorn,
we have our fire to keep us warm
So don’t waste your pity on the like of
us,
cos we love our game, and they breed us
tough
by S. McCulloch
25
Edition 11 - 2014
I
Is Mandatory
Audiometric Testing a
Thing of the Past?
n May 2014 the Queensland Government
decided to rule in favour of the increased
pressure from Queensland small businesses
over the mandated requirement for the Person
Conducting a Business or Undertaking
(PCBU) to provide audiometric testing under
section 58 of the QLD Work Health and Safety
Regulation 2011. Specifically, this section
called for the PCBU to deliver audiometric
testing to relevant workers (worker’s whose
primary source of noise protection on the job
is PPE) within three (3) months of commencing
in the role, and every two (2) years thereafter.
There was much debate over section 58
of the Regulations when the model WHS
legislation was opened for public comment in
2012, the main argument against audiometric
testing was the significant time and costs
associated with this new requirement on small
business in an economic downturn such that
which we are currently experiencing. On the
other side of the fence, the argument for
mandatory audiometric testing is headed by
industry based Audiometrists. Having warned
against the removal of mandated audiometric
testing, stating that there is already a clear
difference in the number of personnel sent for
audiometric testing from large business (who
can afford the costs), and small business (who
cannot). It has been stated that hearing loss
trends are more often found among personnel
in small business than large, however by
removing the mandatory requirement to
undertake this testing, these trends may
begin to occur across the board.
However, while the mandated requirement
for audiometric testing has now been removed,
all eyes turn to the QLD Managing Noise
and Preventing Hearing Loss at Work Code
of Practice; updated on 30 May 2014, the
code continues to reference and encourage
the use of audiometric testing as an effective
control. So what alternative controls does
the code describe in addition to audiometric
testing? It should be noted that although
audiometric testing has been removed from
the Regulation the proposed schedule and
requirements did provide an effective baseline
for monitoring and managing hearing damage
if followed correctly. Therefore while it is no
longer mandated, it is certainly worthwhile
considering keeping this practice as a part
of your noise exposure risk management
strategy.
If, however like many, the time and costs
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associated are a constraint, there are other
options to consider. Firstly we need to
understand how hearing loss occurs. The code
says Hazardous noise affects the functioning
of the inner ear, which may cause temporary
hearing loss… with further exposure to
hazardous noise, the ear will gradually lose
its ability to recover and the hearing loss
will become permanent. Permanent hearing
loss can also occur suddenly if a person is
exposed to a very loud impact or explosive
sounds. Permanent hearing loss is a result of
the destruction of hair cells in the inner ear.
The WHS legislation defines the exposure
standard to noise level as:
- The LAeq, 8h db(A) – average exposure of
85db(A) over 8 hours before hearing
damage may occur;
- The LC, peak of 140 db(C) – noises
occurring over 140db(C) usually occur
with impact or explosive noises such as a
gunshot.
Furthermore, noise cannot only damage
hearing function, but persistent noise can
also have an effect on fatigue levels and
cardiovascular disorders such as heart
disease and high blood pressure, so effective
noise management in the workplace is more
important than ever.
Identifying Areas of Concern
When identifying areas of concern in the
workplace in relation to noise, you should
always consult with your workers. As a rule
of thumb, if you need to raise your voice to
be heard by someone about one metre away
from you, the noise level of that area is likely
to be hazardous. If or when excessive noise
is found that may be exposing your workers
to hazardous levels of noise, a competent
person should be engaged to conduct a noise
assessment. Their assessment should take
into account:
provided to management outlining the findings
and providing appropriate control measures.
The desired and most effective controls come
from eliminating the risk altogether; where this
is possible it is certainly encouraged, however
this is not always possible and therefore other
controls should also be considered.
Elimination
As the title suggests, the most obvious
choice is to ‘eliminate’ the hazardous noise
emitting plant, machinery or process by
substituting the hazard with plant or processes
that are ultimately quieter.
Substitution
If you are unable to find a suitable solution
involving the elimination of the noise hazard,
the next step in the hierarchy of risk control
is substitution. This involves change, for
example change the way the job is performed.
Although not always practicable it can be
very worthwhile to look for alternate ways
to perform the task involving the exposure
to hazardous noise that may/will result in a
reduction in exposure.
Engineering
Engineering controls involve changing
something about the plant or machinery to
minimise the noise from its source. Practical
examples of this include:
- Fitting exhaust mufflers on internal
combustion engines;
- Fitting sound-absorbing materials to hard
reflective surfaces;
- Turning down volume controls;
- Eliminating potential impact zones between
hard objects and/or surfaces; and
- Reducing drop heights or angles at which
objects can fall on to hard surfaces.
- Plant, equipment and other sources of
noise at the workplace;
- How work activities are carried out;
- The length of the shift; and
- Environmental factors (walls, surfaces,
layout or work station, etc.)
After the assessment is complete a report is
26
Edition 11 - 2014
Isolation
This involves separating the worker and
the plant or machinery creating the noise
emission. Options include:
- Locating sources of noise further away
from workers, and placing demarcation
lines down to display “safe noise zones” as
identified in a noise test;
- Building enclosures or sound proof covers
around sources of noise; or
- Installing screens or barriers in the path of
noise to redirect it away from workers.
- Notify other workers prior to using noise
generating machinery so they can take
measures to protect themselves;
- Exclude unnecessary workers from noisy
areas;
- Limit shift times for workers performing
noisy work, in line with the Equivalent
Noise Exposures ratios in table 1 of the
QLD Managing Noise and Preventing
Hearing Loss at Work Code of Practice
2011; and
- Provide quiet areas for meal breaks, etc.
Administration / Training
Now we start to get to the lower end of
the hierarchy of risk controls. Administration
controls do not manage the source of
emissions by amending the plant, machinery
or process in any way, but rather look at
ways to manage the worker’s response and
reaction to the noise hazard. For example:
Personal Protective Equipment (PPE)
PPE is the last line of defence and should
only be adopted as the SOLE risk control if
nothing else is suitable. Of course, PPE used
in partnership with other control measures is
encouraged and most times essential. Where
PPE is used, the PCBU must therefore ensure
the equipment is:
- Organising rosters, etc. so that noisy work
is conducted when the least amount of
people are at work;
- Erecting signage in noisy work areas to
alert personnel of the hazard and their
subsequent requirement to wear PPE;
- Selected to minimise the risk to the health
and safety of the wearer;
- Suitable for the nature of the work and
associated hazards;
- A suitable size and fit, and is reasonably
comfortable for the wearer to wear for
short and longer periods of time;
- Is maintained, cleaned, repaired and
replaced as required, and in line with the
respective Australian Standards; and finally
- Is actually worn, and worn correctly by the
worker. PPE cannot help anyone if it is not
used properly!
PPE options for hearing protection can
range from ear muffs to ear plugs, but must
be appropriately rated to the job for which
they are selected. A risk assessment and
noise assessment can assist in the selection
of the correctly rated PPE to be worn. It is
also important that the worker wear the PPE
as directed throughout the period of exposure
to noise, as failing to do so for even a small
period throughout the day reduced the overall
effectiveness and protection provided.
So there you have it! The QLD Managing
Noise and Preventing Hearing Loss at Work
Code of Practice 2011 provides advice on
many alternatives for a PCBU to adopt in the
control of noise exposure in the workplace.
Further consideration however should be
given to retaining the provision of audiometric
testing in line with the Code as this is a proven
effective tool in the fight against hazardous
noise hearing damage.
Queensland SafeOP Audit
Discount Voucher
OFF
Reference this voucher when you book your SMRS
SafeOP Audit by the end of September 2014
to receive 10% off the hourly consulting rate!
Call 040 039 081 to book now!
Offer expires 30th September 2014
www.smrs.net.au
27
Edition 11 - 2014
The Top Mining
Trends of
2013 - 2014:
By Lauren Dearing
How are we performing
I
2013 2014
t’s no secret the mining game has been
tough of late; in recent months the
Queensland Resources Council President,
Michael Roche, has said that an estimated
10% of mines in the state of Queensland are
now in a very precarious position, and we have
seen 170 jobs slashed from the BHP Billiton
Mt Whaleback iron ore mine in the Pilbara,
40 jobs are under threat in Tasmania’s Nelson
Bay River iron ore mine, and BHP Billiton
has cancelled the Downer EDI Goonyella
Riverside coal mining contract letting go of
approximately 420 workers.
Figure such as these still feel like a shocking
reality lately, but how are we going to push
through? Over the last few years, our industry
experts have been releasing reports into the
Top Ten Mining Trends, with a look at what
is affecting the industry with the biggest
consequences, and options or solutions
available to help mitigate the effects of such
large bouts of unemployment and reduced
productivity in the industry and state.
In 2013 and 2014 Deloitte released an
annual ‘Tracking the Trends’ report into the
predicted and recognised top ten trends in
the mining industry of that year; taking into
consideration the shift in the market in China,
trends such as the following were identified
over the past two years:
Obvious parallels can be drawn between
the two, the top trends of 2013 clearly linger
into 2014 and this can be expected as we are
yet to see a turnaround in the market. Trends
such as increasing costs of doing business,
and the subsequent decrease in productivity
has also been attributed to the introduction of
the carbon tax in July 2012. Recent reports
from our politicians claim the $23 per tonne
carbon tax is high on the agenda to be
scrapped under the Abbott government. In
theory, carbon taxes are a cost effective way
to reduce green-house gas emissions, but on
the other side carbon taxes are considered
a “regressive tax”. To demonstrate this, the
chart below shows the effects that the carbon
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1. Counting the costs
1. Mining productivity hits new lows
2. Managing demand uncertainty
2. Market imbalances wreak commodity 3. Capital project deceleration
price havoc
3. Exploring the innovation imperative
4. Preparing for the M&A storm
(mergers and acquisitions)
4. Debt up, deals down and juniors fight 5. Governments eye the mining prize
for survival
5. Record impairments call capital allocation practices into question
6. Combatting corruption
6. Local community demands intensify
7. Climbing the social ladder
7. Government relations marked by rising
8. Plugging the talent gap
8. Zero tolerance regulatory environments
9. Playing it safe
9. From zero harm to zero fatalities
10. At the IT edge
10. The talent gap widens into executive suites
hostility
complicate compliance
tax had on Australia’s annual GDP growth
before and after the introduction of the carbon
tax – note the rapid decline from its peak in
2012. As the figures for 2014 and 2015 can
only be an estimate at present, can it be
assumed that the slow growth estimation is
attributed to the government’s abolishment of
this tax?
Without delving into the economics of
the iron ore, metallurgical coal and thermal
coal over the last 2 years, this downward
shift can be comparable trend for the coal
mining industry in Australia from mid-2012,
creating an air of ‘reactive cost cutting’ that
some businesses have taken to in order to
see out the current climate. This reactive
28
cost cutting has seen portfolio streamlining,
non-core asset separation, and, perhaps
the most damaging of all is the shrinking
of the company talent pool and limiting
funding for ongoing and new projects that
show the greatest promise. As the Deloitte
report explains, reactive cost cutting is rarely
sustainable, therefore to bring costs down
more sustainably, mining companies must go
beyond tweaking their current cost structures.
Instead, they must evaluate their operating
models to ensure they have the management
and reporting systems necessary to build a
cost management culture.
Edition 11 - 2014
Moving Mining into the Unknown
The Deloitte report has detailed the push
in the mining industry into more and more
remote locations. Typically these locations
are filled with harsh conditions which results
in higher costs of business to compensate.
One of the consequential factors is the
consumption of energy – which most recent
figures indicate can represent from 40-60%
of a mine’s total operating costs. This is a
significantly large figure when you consider
the actual productivity output of a mine; for
example Deloitte remarks that productivity on
a mine site is almost never continuous, taking
into consideration downtime due to weather
events, processes and turnover. Therefore, if
you consider 40-60% of operation costs as
attributed to energy consumption as “normal”,
it seems like a missed innovative opportunity.
And the recent “innovative” trend: Energy
Conservation Planning.
It is suggested that in order to save on
energy expenditure there needs to be a more
integrated approach to mine planning and
design with the aim of coordinating energy
supply and demand from inception of a mining
project. This poses the challenge to mine
planning engineers to develop and implement
a robust energy conservation plan, as in its
development the design should take into
consideration the priorities of the business
including the unique needs of the site, the
formation of an experienced and competent
energy management team to implement
and run the program effectively, someone to
know your funding sources and how best to
approach this source, and determining who
the decision makers in the program will be.
Further to the issues of energy consumption
and efficiency, the practice of mining in remote
areas also leads to challenges with staffing
and skills.
Skills Shortages
It seems unusual to claim a skills shortage
when all we seem to read about lately is the
cutting of jobs across the industry. But while
mining contracts move into more and more
isolated areas to reach previously untouched
resources, businesses are being faced with
the challenges of attracting the right candidate
for the job.
www.smrs.net.au
In 2013 the prediction was made that by
2020 there will be a need to fill at least 86,000
mining professionals and skilled workers – all
the literature and research out there claims
the skills shortage we are currently facing
is creeping up and further afield from the
traditional ‘skilled worker’ to safety personnel
and now senior management and executive
levels. The lucrative salaries, working
conditions and perks that attracted these
workers to the industry in the first place are
no longer a reality, and the talent is leaving the
industry – and the country – to follow those
benefits.
Due to the current economic climate we are
now facing shortages across the board in the
resources industry, namely those listed below.
The big issue we now face by the shortages
in senior executive levels is the possibility that
many companies are led by people who do
not have the key skillset required to survive
climates such as the one we are currently in.
This could end up in any number of ways,
from poor judgement, poor leadership, and
bad financial decisions made by those without
the experience and knowledge to see through
the tough times.
So what can be done? The obvious solution
is to redefine talent acquisition strategies and
look at new ways to improve retention. Recent
29
figures show at least 40% of the resource
extraction industry workforce is at least 50
years old meaning at a conservative guess,
a minimum of one third of this workforce will
be retiring together, and this coupled with the
existing pressures businesses are facing to
retain long-term employees could spell huge
productivity and financial problems within the
industry in the long term. So while businesses
may right now be scrambling to find shortterm cost cutting solutions by reducing
salaries, in the long run creating working
environments that are no longer attractive
to your skilled staff may mean bigger costs.
Deloitte’s report hits the nail squarely on the
head by stating mining companies are walking
a fine line between reducing labour costs and
retaining critical talent. Suggestions such as
targeting university level students and finding
ways to attract them to the industry such
as introducing mining-focussed education
programs like those in countries such as
Europe, Asia, Africa and the United States
are gaining momentum. There are so many
benefits to employing “green” field workers
and training them – these same benefits apply
to personnel with career aspirations in mining
management roles as well. Furthermore,
this kind of educational program is not just
limited to a university platform, but can be
offered to young professionals fresh out
of school looking to crack into the mining
management marketplace as
well. Where possible, companies
may look at developing their own
in-house management programs.
This may address issues such
as that mentioned above where
businesses are being led by
managers who are not equipped
with the right skills set for the
job. Show a strong commitment
to training and re-training led
from the top by management,
and never underestimating who
in the company structure – no
matter how high up the corporate
ladder - could benefit from a little
refresher training.
Furthermore, loyalty can be
earned by offering flexible work/
life balance approach; and there
is a difference between saying
that is a commitment of the
company and proving it. To go back to our
issue of working in more and more remote
areas, changing up the tradition FIFO rosters
to be more attractive to young workers may
encourage the development of a larger talent
pool.
For a full report on the developing and top
ten trends in the mining industry in Australia,
see the Deloitte Tracking the Trends 2014
report.
Edition 11 - 2014
Key Principles for
Effective & Efficient Risk
Assessment
For risk assessments to yield meaningful results with minimal burden to the organisation, the following
key principles should be considered.
1.
determine required actions based on defined
risk tolerance.
Oversight and accountability for the risk
assessment process is critical to ensure that
the necessary commitment and resources are
secured, the risk assessment occurs at the
right level in the organisation, the full range
of relevant risks is considered, these risks are
evaluated through a rigorous and ongoing
process, and requisite actions are taken, as
appropriate.
Management forms a portfolio view of
risks to support decision making.
Governance over the risk assessment
process must be clearly established.
2. Risk assessment begins and ends with
specific objectives.
Risks are identified and measured in relation
to an organisation’s objectives or, more
specifically, to the objectives in scope for the
risk assessment. Defining objectives that are
specific and measurable at various levels of
the organisation is crucial to a successful
risk assessment. Evaluating the risks relative
to such objectives facilitates the reallocation
of resources as necessary to manage these
risks and best achieve stated objectives.
As an organisation defines its objectives,
it should also define its risk appetite, or the
amount of risk it is willing to accept in pursuit
of its mission. Failure to define risk appetite
could result in taking on too much risk to
achieve objectives or, conversely, not taking
on enough risk to seize crucial opportunities.
3.
Risk rating scales are defined in
relation to organisations’ objectives in
scope.
Risks are typically measured in terms of
impact and likelihood of occurrence. Impact
scales of risk should mirror the units of
measure used for organisational objectives,
which may reflect different types of impact
such as financial, people, and/or reputation.
Similarly, the time horizon used to assess the
likelihood of risks should be consistent with
the time horizons related to objectives. Risk
rating scales should provide a common form
of measurement to help prioritise risks and
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4.
While risks are rated individually in relation to
the objectives they impact, it is also important
to bring risks together in a portfolio view that
pinpoints interrelationships between risks
across the organisation. Correlations may
exist, in which an increased exposure to one
risk may cause a decrease or increase in
another.
The portfolio view enhances the ability to
identify events and assess similar risks across
the organisation, to ensure that risks are
managed consistent with risk tolerance levels
reflecting growth and return objectives, and to
develop adequate risk responses.
5.
considering
objectives,
responsibilities,
timing, and input and output requirements.
Responsibilities in the risk assessment
process are assigned to those parties that
can provide meaningful perspective on
relevant risks.
Once the scope and plan are agreed, the risk
assessment process should include these
essential steps:
1. Identify relevant business objectives.
Begin by understanding the relevant
business objectives in scope for the risk
assessment; these will provide the basis for
identifying potential risks that could affect the
achievement of objectives, and ensure the
resulting risk assessment and management
plan is relevant to the critical objectives of the
organisation.
2.
Leading indicators are used to provide
insight into potential risks.
Identify events that could affect the
achievement of objectives.
Risk reports are most meaningful and relevant
when they draw out not only past events but
also forward-looking analysis. Historically,
management has tracked key performance
indicators (KPIs) to help detect issues
affecting the achievement of objectives. In
recent years, organisations have also been
developing key risk indicators (KRIs) to help
signal an increased risk of future losses or
an uptick in risk events. KPIs and KRIs are
tactical in nature, can be collected at any time,
reported on a regular basis or as requested
by management (e.g., as part of a balanced
scorecard), and typically include statistics
and/or metrics (often financial) that provide
insight into an organisation’s risk position.
Based on the organisation’s objectives, the
designated owners of the risk assessment
should develop a preliminary inventory of
events that could impact the achievement of
the organisation’s objectives. “Events” refers
to prior and potential incidents occurring within
or outside the organisation that can have an
effect, either positive or negative, upon the
achievement of the organisation’s stated
objectives or the implementation of its strategy
and objectives. Drivers to consider include
economic, social, political, technological, and
natural environmental events, which can be
identified through external sources such as
media articles, analyst and audit reports, and
insurance broker assessments, and a review
of the organisation’s internal processes,
people, technology, and data helps identify
further events.
Essential Steps for Performing a Risk
Assessment
Performing a risk assessment requires
defining and consistently applying an
approach that is tailored to the organisation.
Any risk assessment exercise should begin
with the establishment of a scope and plan,
30
3. Determine risk tolerance.
Risk tolerance is the acceptable level of
variation relative to the achievement of a
specific objective, and should be weighed
Edition 11 - 2014
using the same unit of measure applied to the
related objective. Risk tolerance considers the
relative importance of objectives and aligns
with risk appetite. Risk appetite must be clearly
defined and reflected in risk tolerances and
risk limits to help ensure that organisational
objectives can be achieved. Risk tolerances
should be defined for each key risk type.
be considered to adequately determine risk
responses. Typical risk response strategies
are to accept, share, reduce, or avoid.
6.
Assess residual likelihood and impact
of risks.
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SAFETY,
so you can focus on
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Events identified as potentially impeding the
achievement of objectives are deemed to be
risks and should be evaluated based on the
likelihood of occurrence and the significance
of their impact on the objectives.
Residual risk assessment considers both the
risks as previously identified and the related
risk response mechanisms and control
activities in place to determine the impact and
probability of their occurrence. In other words,
it evaluates the adequacy and effectiveness
of the internal checks and balances in place,
providing reasonable assurance that the
likelihood and impact of an adverse event are
brought down to an acceptable level.
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Bringing it all together.
• Work Health Safety Legislative
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4.
Assess inherent likelihood and impact
of risks.
Evaluate the portfolio of risks and
determine risk responses.
Based on the defined risk tolerance and
inherent risk assessment, management can
determine how to address the identified
risks. All organisations need to take on
a certain level of risk when conducting
business in order to generate returns for their
stakeholders. Appetite for risk and tolerance
for deviation from objectives must form the
basis for determining how to address risks,
considering their expected impact and
likelihood of occurrence. Risk tolerance can
vary from one risk type to another, depending
on the importance to the organisation’s key
mission, values, and objectives. Accordingly,
responses to different “high” risks may vary,
and a portfolio view of risk exposures should
The organisation can now bring its individual
residual risk ratings together into a portfolio
view to identify interdependencies and
interconnections between risks, as well as
the effect of risk responses on multiple risks.
Management can then determine any actions
necessary to revise its risk responses or
address design or effectiveness of controls.
Action plans should be assigned to parties
with the capability and authority to effect
change, with specified milestones and
timelines that are documented and tracked
for completion. Successful implementation
should translate into reduced risk exposures
on the organisation’s risk map.
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Know thou that the Pusher of Tools is a man of many moods.
When he smiles, seeketh him out, praise his rig and laugheth much at
his jests. However, when he moveth with great haste and the sweat
standeth out on his brow, make thyself scarce. If he curseth under
his breath, do not wish him a good day or long life for he will fall upon
thee like the whirlwind. The Driller shall feel his anger, and the Roughneck shall know his
wrath. Not even thy hardhat can protect thee. Ask nought of the Driller, for he despises thy youth. He will ask
many questions of thee which thou canst not answer, and then he
will puff out his chest in pride at his superior knowledge. He is thy
supervisor, however, and thou art required to do his bidding, although
he careth nothing for flattery.
Make a companion of the Logger of Mud, for he always hath
doughnuts in his quarters and he can always find a current
newspaper. Take him thy reading material and share thy sparse food
supply with him, for he provides shelter during thunderstorms away
from the doghouse.
Oilfield Proverb
Listen, all ye miserable sinners who have entered into the land of
the tall derricks through the V-door. Tread softly on thy journey, and
carry a big twenty-four in this dry and thirsty land. Harken to my
voice, all ye of smooth skin and unwrinkled countenance, for I have
dwelt in this land for many years and mine eyes have witnessed all
manner of folly and woe. Verily, I have tasted of the bitter fruit of stuck
drillpipe and I have drunk the dregs of the cup of lost circulation. Grid
up thy loins, my son, and take up thy time sheets with great care.
Listen to the counsel of the sadder and wiser man than thee. When the Drilling Superintendent approaches thee, make thyself
scarce, for he will make thee sweat. Look thou on-the-ball, for
he loveth to chew on thy posterior. Keep out of his sight lest he
know thee by name, for he who arouses the wrath of the Drilling
Superintendent will go many times into the mud house.
The wise man searcheth out the easy jobs on the rig, but the fool
sticketh out his neck.
Latcheth onto the young floor hand, for he is innocent and eager
to help. He is proud and foolish, and will handle many nasty jobs in
his vain attempt to receive recognition and favor. His youth betrays
him, while he stands in the freezing rain to curry favor. Older and
wiser men will laugh at his recklessness, and those with "snow on the
mountaintop" will mock him.
www.smrs.net.au
Regard my words carefully, my son, and thou shalt dwell happily
and prosper in the land of derricks for many years. If you fail to heed
this wisdom, thou shalt be doomed to meaninglessly toil at the home
of the hamburger. Selah
31
Edition 11 - 2014
Shorty and Bob’s
Australian Pub
H
ey Folks, hope you enjoyed the first
instalment of “Shorty & Bob’s Great
Australian Pub Crawl”. We finally left
Curtin Springs (didn’t want to) and due to
unsafe road conditions, changed our plans.
Instead of heading out The Gun Barrel Hwy
to WA, we headed south towards Coober
Pedy.
It didn’t take long to find another little
outback pub. The Kulgera Pub – another
classic bushie!! Our hosts are Reg and Josie.
Reg is a pilot who used to train commercial
pilots and Josie is a former secretary with
15 years’ experience. What a great find! Our
bar person for our time here is Ruth, a lovely
young Dutch girl about to head home after 2
years in Oz on a working visa. After working
on a cattle station at Meekathara, life at
Kulgera has to be a lot easier for her! What a
great personality, I’m sure Reg and Josie will
be sad to see her go.
amazing with a wide range of mouth-watering
food. Included in the menu are crocodile
and kangaroo snags as well as a ship of the
desert burger (camel)! A bushman’s culinary
feast! Outside the pub there’s a tree that has
mementos of past travellers and since I have
a blowout on my Japanese safety boots
(thongs) from yesterday, I’ll be adding to the
foliage.
atmosphere. Man, life’s tough but hey, we’ll
take one for the team and do the hard yards!
Not only is there a great camping area for
our Motorhome, but accommodation is also
available in the form of cabins ranging from
basic backpacker rooms to luxurious ensuite
cabins. Also provided is a little piece of
heaven… a swimming pool. If you’re a person
who enjoys a big brekky then you’re in for a
treat. Jessie Reschke, one of our legendary
outback road train pilots, just enjoyed a huge
feast cooked up by TK, chef extraordinaire,
and served by the lovely young Pei.
This pub has enough memorabilia to keep
you occupied while downing a few liquid
sangers! Another gem in “Shorty & Bob’s
Great Australian Pub Crawl”.
All tongue in cheek guys; the Kulgera is an
awesome stopover for the weary traveller.
“Kulgera” which means weeping/crying
hills, has been under new management
since August 2013 by Reg and Josie Phillips
and Chris and Jarla Le Page. Their plans
are to continue the friendly outback pub
atmosphere. This iconic pub is actually
listed not only as the first and last pub in the
Northern Territory, but lies 14kms north of the
Geodetic Datum, declaring it to be the dead
centre of Australia. Truth be known, there are
five Geodetic Datums which all claim to be
the centre but the Federal Government built
a monument out here so I tend to believe this
is the place!
The pub has a fantastic atmosphere with
friendly staff. For a bush pub the menu is
Edition
www.smrs.net.au
10 - 2014
With satellite TV and the V8 Supercars on
this weekend as well as a big night planned
by the pub, I guess Bob and I might find
ourselves marooned here for a few days
whilst indulging in the fine dining and friendly
32
18
Also, if you’re into hiking off into the bush
the Kulgera Pub also offers safe long term
storage for your vehicle. This service is
provided free of charge but no responsibility
is accepted.
When was the last time you went to a pub
that had bar snacks laid on? The Kulgera
Pub does it in style with banana prawns.
They tried to tell me they’re local yabbies
but hey, a feed is a feed, especially when it’s
free! Couldn’t keep Bob away from them!
The great thing about the Kulgera Pub is
that it’s open for a beer at 7:00am, 7 days
www.smrs.net.au
Edition 11 - 2014
Great
a week. Some pubs in the Northern Territory
don’t sell take away, some don’t open until
2:00pm, etc., it’s all very confusing, but with
Clint, our friendly barman, I can always get
my heart starter as the sun comes up over
the outback desert.
The fact that I’ve gone feral (no shaving
or haircut) has worked in my favour as every
place we go to now, all the tourists think
we’re locals!
I’ve just been informed that the Vin Diesel
movie Pitch Black and also Pricilla Queen
of the Desert were both filmed in this area.
I have missed so much of this great country
by sitting on my ass living the high life on the
Gold Coast – a big cheer for Bob Lane for
the invite to join him on this journey.
We are thanking our lucky stars we headed
south from Alice! It’s been raining in Cadney
all night. If we’d gone out the Gunbarrel we
would be stuck in mud by now. Day light
saving finishes this Sunday, thank God,
because the sun doesn’t rise until 7:45am
at the moment and that sucks. Too much to
do and see! Unbelievable that yesterday we
had 38 degrees Celsius and today is a cold
wet 15 degree Celsius. The desert can be a
fickle place.
Hey peeps, headed out of Kulgera at
sparrows this morning, back on the Stuart
Hwy heading towards Coober Pedy. 180kms
down the road we came to a little place
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www.smrs.net.au
called Marla. Unfortunately not a pub that fits
our criteria - too suburban. We found some
phone service so did what I could and then
Bob and I decided to move on. Down the
track, believe it or not, a sign popped up
saying “Cadney Homstead 50kms”. I said
to Bob I hadn’t been home for a while so
anything with the word “home” in its name
sounds good to me. As Sheldon from The
Big Bang Theory would say… BAZINGA – we
struck another pearler. Cadney Homestead
rocks. Whilst writing this, Bob is salivating
over a huge rump steak cooked to perfection
and I’m drooling over my chook parmi.
All round great meal cooked by Warren
(Wazza) Henwood, chef to the outback for
the last six years.
Having a coldie this morning with Mark
“Buzz” Bzowy, the owner of Cadney
Homestead; he suggested we head out
to the Painted Desert out in the Arkaringa
Hills. Well worth the arduous journey by 4x4
according to Buzz! Wow, he wasn’t wrong.
If you ever get the chance to get out here
this is a must on your bucket list. Arkaringa
Station is a friendly homestead but does
have limited facilities for vans and camping.
We turned off 2kms south of Cadney
Homestead and headed east for about
90kms and ran smack bang into what could
have been a western movie set. Absolutely
stunning. Dry and dusty and sadly my phone
died when we first got there (my bad), so I
didn’t get all the pictures I wanted.
Sitting in the bar having a burb and coke,
we were joined by some weary travellers
from the Gold Coast; Jun, Mako, Kei and
Taku have one week to drive from Cadney
Homestead to Darwin and then back to the
Gold Coast. Rushed trip but good luck guys!
33
19
Ok peeps, looks like we’re in for a bit of
wet. 60kms wind and black skyline. First rain
since Darwin. So… desert storm? Maybe,
saying Goodnight now while we go batten
down!
Well, it’s time to hit the road again and
keep heading south towards Port Augusta.
Next stop is Coober Pedy. We had a great
time at Cadney Homestead. Buzz, James,
Wazza and the crew were awesome folks.
Sitting around the bar swapping stories
was a highlight of our stay. Evan passing
road train drivers joined us for a chat. One
in particular, driving a triple trailer gave us a
chuckle because of what he was hauling!!
I’ve never seen so many “camel toes” in one
place at the same time.
Watch out for the final instalment of Shorty
and Bob’s Great Australian Pub Crawl
featuring the “Back to Kingoonya” party held
annually at the Kingoonya Hotel in the next
edition of The GUARDIAN Magazine, out in
October 2014!
Edition
Edition10
11--2014
2014
CALENDAR OF EVENTS
8-20
August 2014
Ninth
International
Mining Geology
Conference 2014
Adelaide,
South Australia.
2-14
August 2014
The role of the mining geologist has developed into an important role in the
business chain in recent years; given their knowledge and experiences,
geologists are becoming widely involved in the decision making process for
many business-critical steps, from interaction with exploration and mine planning
to mineral processing and marketing. We recognise that, because the mining
industry is built on minerals, geologists are the key professionals who interact
right across the value chain. The International Mining Geology Conference 2014
program incorporates a range of papers on relevant aspect of mining geology,
including practical and applied case studies illustrating good practice and
innovation. For more information, visit www.ausimm.com.au/imgc2014/
National Drilling Conference.
Gold Coast, Australia.
DRILL 2014 is the Australian Drilling Industry Association’s (ADIA) flagship national
conference; it is Australia’s only drilling conference catering for the full range of onshore
drilling sectors: groundwater, minerals exploration, geotechnical / environmental, HDD
(Horizontal Directional Drilling) and CSG (Coal Seam Gas).
For more information, visit http://drillconference.org/.
International Mining and
Resources Conference
Melbourne, Victoria
22-26
September 2014
IMARC is Australia’s only truly international mining
event. Uniting the entire mining industry, IMARC is where mining leaders, policy makers,
financiers, technical experts, innovators and educators are brought together under one
roof. For more information, visit http://imarcmelbourne.com/
5-6
November
2014
AusRock 2014:
Third Australasian Ground
Control in Mining Conference:
Sydney, New South Wales
Aimed at practical mine site operators, geotechnical and mining engineers, technical
support staff, consultants and researchers in the field of mining geomechanics and ground
control, the third Australasian Ground Control in Mining Conference, held in Sydney in
2014, will provide attendees with an opportunity to interact and share information between
the coal and metalliferous sectors of the industry, focusing on new technologies and
developments, industry needs and mine site problem solving, and practical case studies.
For more information, visit http://www.groundcontrol2014.ausimm.com.au/
Edition 11 - 2014
34
24-26
November 2014
Orebody
Modelling
and Strategic Mine
Planning
Perth, Western Australia
The Orebody Modelling and Strategic
Mine Planning 2014 event is a
three-day international symposium
highlighting the latest advances,
technologies, practices and concerns
in the field of mine planning. In 2014,
under the theme of globally optimising
mineral supply chains the symposium
organisers and presenters will examine
whether the approaches applied in this
field are adequate to manage emerging
challenges, stressing the uncertainty
in supply and demand while seeking
risk management and enhanced
performance.
For more information, visit http://
www.smp2014.ausimm.com.au/
www.smrs.net.au
ACM12 Sandvik DE840 / UDR 1200
Carrier: Mercedes 4144
Capacity:
2000m NQ
1200m HQ
800m PQ
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35
Edition 11 - 2014
ACM57 McCulloch DR 950
Carrier: Mercedes Actros 3244
Capacity:
1000m NQ
700m HQ
500m PQ