Karin van der Merwe 22 June 2012 - Fossil Fuel+18,6 mtROM / annum Projects Glencore/ Xstrata merger...
Transcript of Karin van der Merwe 22 June 2012 - Fossil Fuel+18,6 mtROM / annum Projects Glencore/ Xstrata merger...
22 June 2012Karin van der Merwe
"Shanduka" which means "Change" in Tshi Venda
is a fitting name for a company that is growing
and developing in tandem with the broader
changes that South Africa has experienced.
At Shanduka Coal, we have embraced the
meaning of our name and have been adjusting
to our business environment, remaining
competitive, growing our business and its
people continuously.
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� who are we?
� how is Shanduka Coal different?
for discussion today…
� the critical element required to be successful,
big or small
� a final word
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� Acquired Graspan Colliery
� Effective 31 March 2006
� 6,0 mt ROM / annum
� Acquired Wakefield Investments
� Effective 17 July 2007
� +7,5 mt ROM / annum
� Acquired Steelcoal Reserve
� Contiguous to Middelburg Townlands
� Acquired 50% of SpringboklaagteReserve
� JV with Umcebo Mining
� Acquired SpringlakeColliery
� + 1,2 mt ROM Anthracite / annum
November 2005November 2005November 2005November 2005 June 2007June 2007June 2007June 2007 March 2008March 2008March 2008March 2008 December 2008December 2008December 2008December 2008 July July July July 2009200920092009
Shanduka Coal’s growth path then …
13,5 mt ROM
+1,2mt Anthracite6,0 mt ROM / a 13,5 mt ROM / a
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� Wakefields comprised the following collieries:
– Middelburg Townlands
– Bankfontein
– Leeuwfontein
– Lakeside
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� Lakeside / Leeuwfontein put on Care & Maintenance
� -4,5 mt ROM / annum
� Umcebo Mining Integration
� +7,8 mt ROM / annum
� Projects
� Optimum Integration
� +18,6 mt ROM / annum
� Projects
� Glencore / Xstrata merger
December 2010December 2010December 2010December 2010 November 2011November 2011November 2011November 2011 April 2012April 2012April 2012April 2012 FutureFutureFutureFuture
and Shanduka Coal now … and into the future …
9,0 mt ROM
+1,2mt Anthracite
16,8 mt ROM
+1,2mt Anthracite
35,4 mt ROM
+1,2mt Anthracite
annum � Projects
– Wonderfontein
– Argent
� Projects
– Optimum Reserves
– KoornfonteinReserves
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locality plan
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responsible corporate citizenship
� Shanduka Coal has its operations on Middelburg’s doorstep with several new projects coming on line◦ We are committed to a sustainable business model from a health and safety,
environmental and social point of view;
◦ We endeavour to minimise our impact on the workforce, our local communities and the environment;
◦ We believe that we have a social responsibility towards the communities where we ◦ We believe that we have a social responsibility towards the communities where we operate. We therefore not only focus on the SLP and LED projects associated with our mining permits, but also get involved on another level
� To this end we strive to ensure that:◦ The necessary permits and licences are in place◦ Mandatory COP’s are in place◦ Regular HSE monitoring is conducted, and◦ Risk assessments are in place◦ We build relationships with or communities
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� Our leadership model supports our operating model …… it is specifically seen in the successes we celebrate in our safety
achievements
leadership at Shanduka Coal
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� General Managers have the freedom to operate their mine sites without corporate
interference because the trust is there
� Employees have shown they take responsibility for their own safety
� Supervisors do the minimum required paperwork to allow them to spend time in the
field
leadership at Shanduka Coal
field
� Very dynamic and flexible, with a flat managerial structure allowing for speed of
decision making and implementation
� We manage the human factor at the lowest levels by empowering supervisors to
make decisions
� Shanduka Coal management systems measure employees and contractors together
… we do not differentiate
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� When evaluating a block of coal, one will consider the potential to explore and the potential to develop the block of coal with different markets in mind. The factors taken into account in the evaluation will carry differential weighting depending the desired end-result:◦ specific markets (Thermal Coal, Metallurgical Coal, Export / Inland markets…)
◦ mining methodology (long wall, bord & pillar, mechanised, conventional…)
resource evaluation
� The initial base from which any new exploration or mining project starts, is the geology. On this base, financial models are built taking into consideration mining processes, extraction, beneficiation processes and markets. The initial understanding of the geological conditions are critical to determine future costs in developing an identified resource.
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� The main elements identified1 on critical investment criteria (as ranked in an
industry wide survey) is summarised as:
◦ Geological criteria
◦ Regulatory criteria
◦ Economic criteria
� Fiscal criteria
research shows that …
� Fiscal criteria
� Monetary criteria
� Profit criteria
� Operational criteria
◦ Marketing criteria
◦ Environmental criteria
◦ Geographical location
◦ Political environment
◦ Social environment1 Otto and Bakkar 1992 Mining Royalties
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� A broad brush approach
� The detail (coal example)◦ Exploration methods applied
� Drilling – core / percussion
� Logs available
� Analytical data available
� Geophysical data available
� Aeromagnetic surveys available
� Electronic data available
what to look out for?
◦ Coal related information:
� In situ reserves / resources
� Stratigraphic profiles
� Depth of coal seam(s) from surface
� Reserves / resources & thickness of different coal seams present
� Lithology & thickness of partings between coal seams
� Roof & floor lithology of the main coal seams
� Seam thickness continuity (constant / variable)
� Coal seam structure (flat / undulating / inclined)
� Hydrology – water table, annual rainfall, porosity & permeability of strata
� Methane content
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◦ Main structural geological features� Frequency and magnitude of faults� Frequency and magnitude of washouts� Occurrence of intrusives� Joints, fractures� Basin morphology
◦ Coal quality information (mean, minimum, maximum, standard deviation)
� Raw coal� Beneficiated qualities (wash curve, RD fractions)
what to look out for?
� Beneficiated qualities (wash curve, RD fractions)� Proximate analysis (ash, moisture, volatiles, fixed carbon)� Calorific value� Sulphur content� What other types of analyses are available
◦ Geological maps� Total seam thickness maps of main coal seams� Structure contour maps of main coal seams
◦ Regional information� Extent of coal field in the country� Types of coal and total estimated tonnage available
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� Operating models are often “lean and mean”◦ Management structure with contractor mining & consultant services
◦ Management structure, owner mining & consultant services
� The Shanduka Coal operating model is a combination of both
� The risk within the operating model is that the company memory is not within the company
the junior miner operating model
within the company
� Not using the same consultants increase the risk of “memory loss”
� Quality control on service delivery is critical
� Critical risk management in geological services:◦ Drilling contractor selection
◦ Logging and sampling protocols (especially where different consultants are used)
◦ Selecting analytical services
◦ Data management & control
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� Systems to check geological data◦ Databases
� Excel, Access
� Filing system for hard copies
� Centralised data management
� Long standing consultants used:
what worked for Shanduka Coal?
� Long standing consultants used: ◦ reputable geologists, geo-modellers and geoscientists
� We got the basics right most of the time!
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� A lot of historical data to manage with the acquisitions
� We do not have the history and do not know what quality controls were there
◦ often no hard copies available, or
what were problematic for Shanduka Coal?
◦ often no hard copies available, or
◦ only hand written copies available
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� Growing the Mining Services department:◦ Geology,
◦ Planning,
◦ Survey, and
◦ Project Management
… to accommodate the greater number of operations and projects within the group
� Relying less on consultants:
what does the new environment hold for Shanduka Coal?
Relying less on consultants: ◦ creating our own memory
◦ creating flexibility
� Investing in Technology
� Standardising processes and systems across the group of companies
� We have to ensure that we get the BASICS right… every time!
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� Our operating model works:◦ High degree of trust in the management teams
◦ Speed of decision making and implementation
◦ We empower our supervisors to make decisions
◦ Accountability by leadership
� We are a caring company, acknowledges
in conclusion
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� We are a caring company, acknowledges
our environmental and social responsibilities
as a corporate citizen and we make a
difference.
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