CONTRACT MINING
Perfecting performance
To sate increasing demand from clients , contract mining firms are accelerating hiring and training , as well as investing in new technology , Dan Gleeson reports
It ’ s easy to spot an in-demand sector from afar : it is full of merger and acquisition activity as companies within the sector scrabble to grab market share .
That is certainly the case in the contract mining space , with Australia a particularly hot spot .
COVID-19 has exacerbated an issue that was showing signs of emerging prior to the pandemic – fears of incoming supply deficits in major commodity markets , close-to-record low unemployment levels on a national basis and an ageing workforce within mining .
Overlay this with 12-18 months of lockdown in some major cities where people re-considered their careers – resulting in some leaving the mining sector – and it ’ s easy to see why there is a real scrabble for people and resources .
M & A glut
This scrabble has resulted in many contract mining service companies trying to acquire their peers , as well as bolstering their own organic strategies for developing in-house talent .
The most recent piece of M & A activity in Australia involved MACA and a tussle between Thiess and NRW Holdings .
Both companies lodged bids for the Welshpool-based outfit in August , with Thiess coming out the winner with a A $ 1.0751 per share cash offer .
In its initial Bidder Statement , Thiess said it intended to operate MACA in materially the same manner supported by MACA ’ s workforce , brand and assets .
The acquisition of MACA by Thiess is consistent with its diversification strategy , which is particularly focused on increasing its presence within metals and minerals hard-rock mining operations in Western Australia .
To this point , the company ’ s Western Australian hard-rock mining exposure has consisted mostly of work with BHP ’ s Western Australia nickel assets , in addition to a recent contract award at the Covalent Lithium joint venture project .
MACA has exposure to the state ’ s iron ore sector thanks to contracts with Fortescue and BHP ; the burgeoning gold segment through contracts with Regis Resources , Ramelius Resources , Capricorn Metals and Red 5 ; and nickel and lithium exposure from the Ravensthorpe nickel mine and Pilgangoora lithium mine , respectively .
Thiess said in its Bidder Statement that it saw “ a significant opportunity to combine the operational capability of both companies to continue enhancing service quality , particularly in relation to technical solutions such as deploying autonomous machinery or reducing the carbon emissions of mining services on project sites ”.
Thiess has been involved in several large-scale automation firsts in mining and is collaborating on zero-emission haulage alternatives ( see Technology take-up section ), and MACA ’ s own experience of applying such technologies at smaller-scale operations will complement this .
On the autonomy front , MACA , this year , announced a partnership with SafeAI to create one of the largest autonomous heavy equipment fleets in Australia , “ powering safer , more productive and more cost-effective mine sites ”. This followed a six-month proof of concept trial with SafeAI ’ s technology at client Capricorn Metals ’ Karlawinda gold operation , in Western Australia .
The company has also previously stated it is looking at a whole-of-life battery solution for mining vehicles , working with Mitsui & Co Ltd , AVL and Forsee Power on a battery-electric vehicle ( BEV ) project .
Thiess , together with WesTrac and Caterpillar , recently completed a world-first for autonomous drilling , successfully rolling out a system that involved three Cat drill rigs being remotely operated by a single operator at an operation in the Hunter Valley of New South Wales
This major piece of M & A activity follows a breathless four-year period of corporate consolidation in Australia where Mastermyne Group acquired PYBAR Mining Services and became Metarock Group , Downer EDI sold its Open Cut Mining East business to an Australiabased subsidiary of PT Bukit Makmur Mandiri Utama , NRW added BGC Contracting to its offering , MACA bought Downer EDI ’ s Mining West business , Macmahon Holdings purchased GBF Group and Ausdrill ( now Perenti ) captured Barminco .
One of the newest entrants in this space – which also has its own mining assets – is Bill Beament-led Develop .
The company recently started underground work at Bellevue Gold ’ s namesake mine in Western Australia around the same time it bolstered its contract mining resources through the acquisition of Premium Group .
The Premium Group is a well-established provider of specialist mining personnel and equipment to the underground mining industry , according to Develop .
The two parties recently entered an agreement pursuant to which Develop acquired Premium Mining & Civil Pty Ltd and Premium Mining Personnel Pty Ltd ( together , the Premium Group ) for total consideration of A $ 7.46 million ($ 5.3 million ) less net debt .
The acquisition bolstered Develop ’ s capabilities in providing underground expertise and equipment , while helping it achieve its goals as a mine owner / developer and “ mining services business partner ”, it said .
40 International Mining | NOVEMBER / DECEMBER 2022