www.shiftminer.com Shift Miner Magazine Monday November 27, 2017,News Edition 206 READY TO LOAD 2018: GROWTH, AUTOMATION AND WAGE WARS RETURN OF PERMANENTS SKILLS SHORTAGES FORCING FULL-TIME >> Page 15 HOW TO MAKE A QUICK $M45 TERRACOM REVALUES BLAIR ATHOL >> Page 9 November 27, 2017 1 Shift Miner Magazine www.shiftminer.com News CONTENTS NEWS 07 EXPANSION INEVITABLE 08 BIG BED BUY 10 COOK REVIVAL? 14 AUTOMATION ARRIVES REGULARS 19 FRANK THE TANK 19 MAD MUMZIE 22 PUZZLES 25-26 MINER’S TRADER For all general enquiries 07 4921 4333 or [email protected] NEWS & SUBSCRIPTION EDITORIAL Magazine: Only available on bulk subscription to SPQ’s and similar Overall editor is Alex Graham venues. Costs $10 per week [email protected] or 074921 4333 Individual: Weekly subscription news service available direct to inbox, ADVERTISING through the iPhone App and online. Costs $3.99 a week [email protected] or 0428 154 653 Contact [email protected] or 0428 154 653 Shift Miner is published by Fitzroy Publishing Pty Ltd A.B.N 72122739879 36B Williams St Rockhampton QLD 4700 - PO Box 1440 Rockhampton QLD 4700 November 27, 2017 3 Shift Miner Magazine www.shiftminer.com News Expansion has to happen is a problem not seen for a while. “However, new risks are the number one risk to mining ”Due to significant project emerging as the industry switches businesses surveyed. overruns and poorly timed M&A, to growth and while there will be According to EY companies there have been significant relatively less cash commitments are scrambling to get efficiencies impairments across the industry, for debt reduction purposes, out of their businesses by applying and management remains mining and metals companies digital technology to areas like cautious about allocating cash for have signalled intentions to return how they buy and maintain expansion projects,” EY says. cash to shareholders. machinery, how they respond to “But simply returning cash to “Over the last five years, their customers, and of course shareholders is not a long-term CapEx spent on resource automation and machine learning. strategy, ultimately, good projects replacement has declined by 66% “Digital goes beyond adopting executed effectively will offer from US$20.5b to US$6.8b due technology though — it needs better returns for shareholders to lower commodity prices and to be solving a business issue Deciding how much money in the long run…. exercising returns. and is key to resolving the is allocated to new projects good judgment in investment “ Now that growth is back on sector’s number one operational is a significant business risk opportunities are crucial actions the agenda, mining and metals challenge: improving productivity confronting mining companies toward offering shareholders a companies are allocating more across the value chain,” EY said. according to accounting firm unique value proposition.” sustaining or growth capital to get As a consequence, Ernst & Young. In a similar vein two other the most out of current projects…. cybersecurity is now considered Based on discussions with risks titled “Cash optimisation” we have yet to see a significant a significant risk to mining mining companies (number not and “resource replacement” increase in exploration CapEx.” companies coming in at number known), EY has put together a list came in at number six and eight Notably, skills shortages three in the report. of what they think are the top 10 respectively. and infrastructure access risks The risks around the social business risks facing mining and “A recovery in commodity have dropped out of the top 10 licence to operate, regulatory metals. prices and the relentless cost- altogether despite being at the environment and the price of At number two on the list is cutting exercises have resulted in top of the list in 2008’s boom energy, remain perennial business a risk defined as: “competitive higher margins and improved cash times, and perhaps surprisingly risks sitting in the top 10 for more shareholder returns” which EY says generation,” EY said. EY says digital readiness is now than a decade. “Gone to shit” Good solid contract The CFMEU says a meeting yesterday beyond 100 days is a disproportional experience in the Bowen Basin,” with the management of the Glencore response by Glencore. he said. owned Oaky North mine has not “This is likely to mean 180 “Importantly for the broader resolved any differences - in fact, it has workers and their families are going industry as a whole it is a good moved the parties further apart. to be without work or income over the solid contract that is going to be District Vice President for the Christmas period,” Mr Brodsky added. worth people coming back to the CFMEU Chris Brodsky says he expects “The Union is going to look after them, sector for. the industrial dispute to continue and try and keep things as normal as we “For a long time coal has been through Christmas and into the new can, but when workers went on strike a sector where people didn’t see year, with no visible sign of a resolution earlier in the year, Glencore said they any long term opportunity, but in sight. lost 6400 man hours. these are real jobs for real people.” “Yes everything has gone to shit,” “Well by locking them out all this time, Construction of the project he told Shift Miner it has cost them more than 300,000 is scheduled to commence later “We met with them yesterday and had a man hours. BMA has awarded contracts this year and take 18 months to pretty decent meeting. “It’s a discussion I have been having worth more than $50 million complete. “We went, willing to move a little bit with a lot of people lately about what for the construction of a new In addition to the new on the big hitter issues like workplace is a fair or proportional response in this 11-kilometre overland conveyor conveyor, BHP says they will build representation and the disputes clauses, negotiation.” linking Peak Downs mine with the a new stockpile pad and Run-of- but they responded by saying they Glencore has not yet responded to Coal Handling Preparation Plant Mine station at Peak Downs and wanted a whole lot of other smaller requests for comment. However, they (CHPP) at the neighbouring Caval upgrade the Caval Ridge CHPP things included as well, that they had recently told Shift Miner earlier strike Ridge Mine. and stockyard. previously conceded. action cost them 28-thousand hours of Mackay-based G&S BMA will also invest in a “So the result is that we are further labour at the mine. Engineering has been awarded a new mining fleet, including apart.” They also claim the average salary $9.5 million work contract, while excavators, and trucks. Under the Fair Work Act, both for permanent employees at Oaky North CIMIC Groups CPB Contractors “The progression of this employers and employees have levers is about $180,000 a year and increased has been awarded $38 million important project for our business they can pull to influence negotiations around 10% between 2011 and 2016 worth of work. means we can continue to safely during an enterprise negotiation. when wages were adjusted for inflation. G&S CEO Mick Crowe said the and productively produce our The employees can go on strike which According to the CFMEU, short of a project was a great opportunity high-quality metallurgical coal for costs the employer, while the employer resolution between the two parties, the and they will be recruiting new steelmaking around the world.” can lock out the workforce which only thing that can end the lockout now people to get the job done. BMA Asset President, Rag Udd costs the workers. Both actions can be is a Federal Government intervention “This is a great project to said this week. classified as protected by the Fair Work or a new ruling by the Fair Work deliver a homegrown solution, Since coal prices spiked late Commission, meaning they are not Commissioner. They say it’s now bringing together our local in 2016, BMA has been using illegal. the longest lockout of employees in knowledge of the Caval and Peak haul trucks to take coal from Peak However, the CFMEU says the Australian history. sites along with our high-quality Downs to the under utilised Caval Lock-Out - which has now extended infrastructure and construction Ridge CHHP. 4 November 27, 2017 Shift Miner Magazine www.shiftminer.com News An eye watering loss of 2018, and Bounty aims to pro- gressively increase production to a total 1.8 million tonnes of product over 12 months. “These transactions will provide Bounty with revenue from the Cook Colliery and a mid-term development project in Minyan- go, for which a mining lease has already been granted.” While the Minyango under- ground coal project is still a long way from being operational, it does have potential, with previous mine plans allowing for up to 7 Contractor Bounty Mining is likely the time said the takeover would be fourth mining cycle he had worked million tonnes of coal exports a to be a mine owner by Christmas, a “significant step forward in the through. year. following their successful bid of company’s strategy of acquiring However, as former CEO of around $40 million for the Cook more resources investments”. Caledon Coal Brett Garland told Colliery and Minyango mining Bounty mining has historical- Using that experience, he says Shift Miner in 2013 when they lease from liquidators of the ly operated in the Bowen Basin they now plan to reconfigure the hatched their plans for a longwall now-defunct Caledon Resources.