Mining companies advised to invest in the future

24th April 2015

By: Bruce Montiea

Creamer Media Reporter


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Despite tough conditions currently, mining companies should still invest in building their operations for the future, as “the cycle will eventually turn”, says Roger Dixon, chairperson and consultant of SRK Consulting, a firm of engineering consultants and scientists.

He adds that it is important for a mining company to “take advantage of the good times when they do inevitably come around again”.

Dixon tells Mining Weekly that 2015 did not start well for the mining industry, not only in South Africa but also worldwide. “The commodities sector is tough. Growth rates in Europe are down to below 2%, and even though the US has made a recovery, it is not significant. Prices of commodities, such as iron-ore, coal, gold, platinum and copper, are at seven-year lows.”

Mining companies are, therefore, not only cutting back on projects but are also reducing capital and exploration expenditure, as well as staff numbers, to reduce operational costs, he notes, adding that this is expected to continue throughout 2015.

However, Dixon tells Mining Weekly that this situation may also present an opportunity for consulting firms such as SRK because work is created when mines reallocate their capital to priority projects. There is a certain amount of technical work that has to be done following such decisions, such as due diligence studies, which is one of the company’s areas of expertise.

He adds that SRK has projects in the pipeline for the year: “The current climate means that our success rate on proposals submitted is not as high as we would like it to be, but we methodically submit proposals".

He says the kind of projects that SRK tends to procure pertain to ore-reserves audits, competent person’s reports and feasibility studies, adding that the company’s multidisciplinary approach to its service offerings is beneficial in this regard.

“We have the ability to provide in-house services and project management in more than six disciplines, including environmental and social impact studies; hydrogeology, or the study of groundwater; hydrology, which has to do with surface-water management; geotechnical; civil engineering; and mineral processing.”

SRK is able to assist mining companies in surviving the difficult times by reviewing their plans and provide realistic advice on how best to manage risk, improve efficiencies and achieve reasonable returns, Dixon notes.

Further, he adds that the application of technology is going to be the secret to success for mining companies, especially in terms of optimising operational systems and real-time monitoring of operations.

Training and Development
Dixon says, even in the tough mining environment, consulting engineers have to continuously train and develop engineers to ensure that they have the right skills to offer clients in the long term.

He adds that SRK has always taken a long-term view to ensure a continuous pipeline of engineers, adding that very few of the company’s consultants come directly from university: “We prefer that they have industry experience, but we do have exceptions where we employ engineers with postgraduate qualifications who are engaged in research in the areas in which we work”.

Further, Dixon tells Mining Weekly that the downturn in the mining industry makes it difficult for mining-industry-related graduates to find experiential learning opportunities as mining companies are cutting back on expenditure.

Having said that, for the past ten years, SRK has partnered with the University of the Witwatersrand’s (Wits’) School of Mining Engineering to provide financial support for selected students enrolled in the school’s postgraduate rock engineering research programme, offering internship opportunities at SRK whenever possible.

“The bursary programme has allowed some of our top students to specialise in rock engineering, which is a key discipline for mining, but, for various reasons, the discipline attracts relatively little postgraduate interest among the graduates,” says Wits School of Mining Engineering head Professor Cuthbert Musingwini.

The scheme was initiated by the School of Mining Engineer- ing’s Professor Emeritus Dick Stacey, a previous chairperson of SRK South Africa, who approached several companies and organisations in the mining sector to help deal with numerous requests from bright but underresourced students wanting to enrol for the MSc degree.

“I was delighted when SRK took up this challenge, and the company also offered to take in some of the students as interns. Internships are valuable for postgraduate students, giving them real-life work experience and practical mentoring while enabling them to complete their studies,” says Stacey, who was employed by SRK for 25 years.

The internship system has allowed some of the MSc graduates to progress within SRK and to become mentors to the newer interns.

While SRK does not have the capacity to absorb all the programme’s interns, there is considerable opportunity for those who are chosen to progress through the ranks.

“At least seven of SRK’s best technical minds have contributed to our MSc courses as guest lecturers. SRK experts have also invested considerable time in being external examiners for these courses,” says Stacey.

Edited by Leandi Kolver
Creamer Media Deputy Editor


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