barminco limited - The International Resource Journal

BARMINCO LIMITED
www.barminco.com.au
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MINING • Barminco Limited
An unrivalled ha
underground co
Barminco Limited is on a g
JUNE 2011 • The International Resource Journal
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MINING
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ard rock
ontract miner
global path to greatness
photo credit: aums
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MINING • Barminco Limited
JUNE 2011 • The International Resource Journal
For 21 years this team has worked tirelessly, unceasingly, to be
the go-to vehicle for any mining house in need of hard rock
underground contract mining services, and following its latest
triumph—the second largest underground mining contract to
be awarded in Australia and the largest contract it has bagged to
date—Barminco Limited, of Western Australia, has the global
limelight firmly focused on them.
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MINING • Barminco Limited
The company that started as a decline mining
the Sukari gold mine in Egypt. Soon thereafter, the
services provider in Western Australia in 1989—
company commenced deep directional diamond
when the technique was in its infancy—has just
drilling operations in South Africa—a component of
been awarded a renewal of its contract with
its service offering which dates back to its first
AngloGold Ashanti Australia Ltd. for works at
full services contract in Australia in 1995—mark-
the Sunrise Dam gold mine; a five-year contract
ing its global navigation according to market
worth an estimated $500 million over its tenure.
demand for its expertise.
In addition to its home ascendency, the group
“There are two markets of particular inter-
has enviably positioned itself in West Africa
est to us today, starting with Central Africa which
where it provides a range of services including
began to attract significant amounts of explora-
those typically seen under the owner-operator
tion later than the West African market, so it’s
mining umbrella, to assist with lacking infra-
more immature but it’s following a similar growth
structure and amenities. Now with three focus
path,” David Noort, Group Client and Commercial
areas—Australia, Central Africa and later on,
Manager tells IRJ.
Latin America—there appears to be no stopping
“Over the next ten years we expect to see a
this best-in-class hard rock underground contract
number of open pit mining projects converting
mining services master.
to underground in the central and east African
market, as is occurring in the West African mar-
Growing core competencies globally
In 1995 Barminco was awarded the first of its many
ket currently.”
With 35 open pit mines currently operating
full services underground mining contracts, giving
in West Africa—given the techniques Barminco
the company its opportunity to move from offering
offers in decline underground mining—each
not just the development function, but the produc-
mine has a high level of prospectivity for con-
tion mining also. It then diversified into concrete
verting to an underground mine as is often the
and crushing in 2003, and entered West Africa
course of events. With this potential comes a
though a joint venture with Ausdrill called AUMS—
healthy outlook for Barminco and its relatively
African Underground Mining Services. In 2008
unique capabilities in this space, as well as
operations commenced in Ghana and, in 2009,
strong grounds for its burgeoning interest in
Barminco exclusively, was awarded a contract for
central African states.
JUNE 2011 • The International Resource Journal
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MINING • Barminco Limited
“On a long-term basis the Latin American
of owner-operator, is the AUMS joint venture’s
market has some attraction but it’s not the same
work on Newmont’s Subika mine in Ghana
current level of strategic imperative as the Central
where it has been busy since February 2010.
African market is to us—that’s something we’re
maintaining on a close-watch basis,” Noort adds.
The group’s projects, past and present,
“After a tender process that comprised several
of the world’s specialist underground hard rock
mining contractors Newmont engaged us to carry
demonstrate its range of capabilities both in Aus-
out initial trial mining and exploration at one of their
tralia, as its position continues to strengthen in
open pit operations that has moved underground
West Africa, and as the company also moves into
in order to evaluate it. It’s potentially a very large
more central African states.
operation that is moving into the next stage at the
moment and discussions are ongoing,” says Glenn
In demand and ongoing growth
Epitomizing the group’s dexterity in stepping
into activities typically viewed as the realms
Heard, AUMS’s General Manager.
“We also have the Randgold Loulo gold mine
which comprises two contracts for us: There’s
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JUNE 2011 • The International Resource Journal
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MINING • Barminco Limited
photo credit: aums
JUNE 2011 • The International Resource Journal
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the Gara underground mine and the Yalea under-
for meeting market expectations and bringing in a
ground mine. The Loulo operation includes mul-
project on schedule. We have taken over a large
tiple open pit and underground mines, but all of
portion of the owner mining function and returned
the ore goes through the one milling operation.”
it into a contract mining function again, which led
Randgold’s first underground undertakings
to the opportunity at Yalea where we’re developing
at the Loulou mine, in Mali, began as a contract
independent access to the ore body below the cur-
mining function. Prior to AUMS’s arrival at Loulo,
rent level of the mining horizon to establish a new
arrangements for parts of the underground min-
approach to mining it,” Heard says.
ing function with other contract miners was prov-
“That heavily relies on our core competencies
ing unsatisfactory and having observed AUMS’s
to improve the overall operating performance of
performance in Ghana, Randgold elected to bring
the mine. As an example when you compare the
the company in for the Gara project.
development advance rates at Yalea to that of
“We really have shown to the client the benefits of having a “fit for purpose” contracting team
ours at Gara, AUMS have excelled,” Heard says.
“The average advance per month at Yalea since
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MINING • Barminco Limited
project inception has sat at approximately 360 me-
establishing training programs and understand-
tres from six jumbo machines. Recent AUMS average
ing how to do business there, there is a significant
performance at Gara is exceeding 400 metres (from
barrier to entry for competitors and AUMS provides
one jumbo machine). Those sorts of statistics make
a compelling value proposition to our clients.”
you start to appreciate our value proposition.”
With its aptitude and experience in the region
Likening West Africa and its many open pits
with the propensity to become underground
clearly defined, Barminco is well-placed to act
operations as “a Nirvana for the group,” Noort
advantageously alongside what Noort explains
demonstrates why, as the mining industry and
are a number of factors that cause West Africa’s
operations mature and grow, so will this compa-
industry to favour contract mining.
ny. Looking more widely at specific bullish commodities, he says, Barminco sees some signifi-
A sustainable, safe and bright future
Accessing supply chain and infrastructure re-
cant trends in the copper market.
“Rio Tinto has put out some publicity in the
quirements in support of a healthy mining opera-
last couple of years, and the way they have it
tion in West Africa, Noort says, there are im-
total global copper production will move from the
mediate and distinctive differences to doing so
current around 26 per cent from underground
compared to Barminco’s native Australia where,
sources to anywhere between 40 to 50 per cent
“you can essentially purchase these on a fee-for-
by 2025. Primarily that comes from changes
service basis because they’re well-established.”
in Chile, but certainly it exists around the world
“Companies have to build these themselves
and that’s much more of a challenge. Once you
too,” he says.
“From a global context I think that advances
have a provider there running multiple operations
in exploration technology and being able to find
with obvious benefits to scale servicing those op-
deposits without surface expression hasn’t really
erations, incrementally every subsequent client
matured at the rate of consumption of mineral
is provided an even greater value proposition,”
products and that’s forcing mines to go deeper
he explains.
which favours underground mining a lot.”
“That’s why we feel that it’s been a chal-
With Latin America in its long-term sights,
lenge entering the market, but now we’ve done
Barminco is currently readying to commence work
that and the hard yards have been done such as
at the recently awarded $60 million contract for
JUNE 2011 • The International Resource Journal
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MINING • Barminco Limited
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Western Areas’ Spotted Quoll nickel mine. The
good mining strategies, planning, advisory—even
company will carry out what Noort describes to be
engineering services and project management.
very typical work in terms of services: Starting from
Typically in the domestic market such requests
the initial portal development and accessing the
aren’t as common (there are plenty of estab-
ore body, developing and delineating the ore
lished providers) but in countries like Africa those
body, then commencing the production mining
options realistically don’t exist and clients are
process—and in terms of its future service offer-
increasingly turning to us,” he says.
ing there are no plans to change doing what the
company does so well.
“We certainly intend to remain doing what we
are today, that is underground hard-rock min-
“As those requests come in we’re looking to
develop that capability in-house so that’s another
option for us.”
It is one option of many for the company
ers through and through, and we don’t have any
today, but it is also evident that Barminco does
intention of diversifying from that in the immedi-
not take a scattergun approach to plans for fur-
ate future. Underground coal mining has been
thering the exponential geographical, client and
raised—although there are of course significant
capabilities growth it has already achieved. For
differences in knowledge and approach required
any miner in West or Central Africa grappling with
to enter that market,” he says.
a lack of supply chain and infrastructure, the
“We say we’ll do anything that involves under-
company is on hand to provide solutions. For any
ground hard rock mining, or at least we’ll consider
opportunity to build client relations, expand on
it. There are a number of services we provide our
previous works or provide full services hard rock
clients on a sub-contract basis, so we can look to
underground contract mining, it is the first name
acquire this capability internally, organically or inor-
that springs to mind. And for any mining house
ganically, depending on the application”
looking for an experienced, responsible, safe and
Drawing on its experiences globally, Barmin-
extremely capable contractor to take on a chal-
co will also pay continual attention to its work in
lenge, there are few contenders that can match
place of owner operator activities—work which
up to Barminco’s progress both historically and
Noort says will be increasingly prominent as the
today.
group continues to internationalise.
“This includes evaluation of deposits, finding
www.barminco.com.au
AS SEEN IN THE JUNE 2011 ISSUE
OF THE INTERNATIONAL RESOURCE JOURNAL