Tag Archives: mining consultants

ERM on executing the mining sector’s sustainability strategies

With sustainability close to the number one topic shaping the business landscape, the mining industry faces perhaps more scrutiny today than ever before. From stakeholder engagement to employee welfare and the emissions generated from using mined commodities, there is a spectrum of issues on which mining companies are judged. Not just by traditional critics such as NGOs, but increasingly by policymakers, investors and consumers themselves.

As a result, mining companies are seeking the advice of consultants that live and breathe environmental, social and governance (ESG) issues to adapt to this evolving backdrop (see the mining consultants focus in IM October 2021 for more on this).

In this regard, they don’t come much bigger than ERM, which calls itself the largest global pure play sustainability consultancy. With a remit that goes into strategic, operational and tactical challenges, the company’s services have been in serious demand of late.

Louise Pearce, ERM Global Mining Lead; Jonathan Molyneux, ERM Mining ESG Strategy Lead; Peter Rawlings, Low Carbon Economy Transition Lead; and Geraint Bowden, Regional Client Director – Mining, were happy to go into some detail about how the company is serving the industry across multiple disciplines.

In demand

According to the four, there is increasing demand for services from miners interested in energy/battery minerals (lithium, cobalt, nickel, copper, platinum, palladium and rhodium (PGMs)) on the back of rising numbers of new mines coming onto the scene, “shorter supply chains to customers”, the perceived need to secure domestic supply of these minerals, and requirements of “evidence of responsibly-produced certifications from industry organisations such as the Initiative for Responsible Mining Assurance (IRMA)”.

Such trends have been underwritten by a shift in both the requirements and considerations around the extraction of these minerals, according to Molyneux.

“In the last five to seven years, the main ESG incentives for change have come from access to capital (ie investor ESG preferences, especially in relation to catastrophic incidents),” he said.

“Over the last three years, we have seen a strong rise in expectations from downstream customers, particularly leading brands.”

Jonathan Molyneux, ERM Mining ESG Strategy Lead

Automotive original equipment manufacturers like BMW and Daimler are placing sustainability at the centre of their brands, according to ERM. Their initial focus has been on ‘net-zero’ driving/electrification – and they have made progress on this with several major electric car launches. They then shifted to examining the carbon emissions and ESG, or responsible practices, of tier-one and tier-two component manufacturers. The last step has been a full analysis of the ESG credentials of input materials right back to source, ie the mine.

“We see a shift from the historic lens of customers managing supply risk by sourcing from organisations which ‘do little/no harm’ (eg human rights compliance, catastrophic incident avoidance) to supply partners that can contribute to the ‘do net good’ or ‘create value for all stakeholders’ (ie communities, workforce, nature positive),” Pearce said.

Such a shift has resulted in more clients considering “circular thinking” in their operational strategy, as well as carrying out risk reviews and transformation projects focused on a company’s social or cultural heritage. Tied to this, these same companies have been evaluating their water use, biodiversity requirements and, of course, decarbonisation efforts.

It is the latter on which the steel raw materials companies predominantly have been looking for advice, according to ERM.

The focus has been on ‘green’ iron ore, low-carbon steel and ‘circular’ steel, according to Molyneux and Bowden, with ERM providing input on how companies in this supply chain can integrate sustainability into their strategy and operations.

On the thermal coal side, meanwhile, it is a very different type of ERM service in demand: mine retirements, closure/local/regional regeneration transitions and responsible disposals.

Delivering on decarbonisation

The mining industry decarbonisation targets have come thick and fast in the last 18-24 months, with the latest announcement from the International Council on Mining and Metals (ICMM) seeing all 28 mining and metals members sign up to a goal of net zero Scope 1 and 2 greenhouse gas (GHG) emissions by 2050 or sooner, in line with the ambitions of the Paris Agreement.

Many have gone further than Scope 1 (direct emissions from owned or controlled sources) and Scope 2 (indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the reporting company) emissions, looking at including Scope 3 (all other indirect emissions that occur in a company’s value chain) targets.

Fortescue Metals Group, this month, announced what it said is an industry-leading target to achieve net zero Scope 3 emissions by 2040, for example.

These are essential goals – and ones that all interested parties are calling for – in order to deliver on the Paris Agreement, yet many miners are not yet in the position to deliver on them, according to Pearce, Molyneux, Rawlings and Bowden.

“Miners need to look at decarbonisation at a holistic level across their operations and value chain, and cannot just delegate the net zero requirements to individual assets,” Rawlings said. “The solutions needed require investment and are often at a scale well beyond individual assets/sites.”

Much of this decarbonisation effort mirrors other industries, with the use of alternative fuels for plant and equipment, accessing renewable electricity supplies, etc, they said.

Process-specific activities can present challenges and is where innovation is required.

“These hard to abate areas are where a lot of efforts are currently focused,” Rawlings said.

Tied into this discussion is the allowance and estimates made for carbon.

There has been anecdotal evidence of miners taking account of carbon in annual and technical reports – a recent standout example being OZ Minerals inclusion of a carbon price in determining the valuation of its Prominent Hill shaft expansion project in South Australia – but there is no current legislation in place.

“We are seeing a broad spectrum of price and sophistication (targeted audience, knowledge level), but it is an active board level discussion for most clients,” Bowden said on this subject. “Most clients view this as market-driven requirements as opposed to a voluntary disclosure.”

This has been driven, in part, from the recommendations of the Task Force on Climate-Related Financial Disclosures, which many miners – including all the majors – are aligning their reporting with.

Some clients are also looking into scenarios to work around carbon regimes such as the Carbon Border Adjustment Mechanism, which proposes a carbon-based levy on imports of specific products.

Having acquired several companies in recent months focused on the low carbon economy transition – such as E4tech, Element Energy and RCG – ERM feels best placed to provide the technical expertise and experience to deliver the sustainable energy solutions miners require to decarbonise their operations.

“With these companies, combined with ERM’s expertise, it means we can support clients on the decarbonisation journeys from the initial strategy and ambition development through to implementation and delivery of their roadmaps,” Rawlings said. “We can support clients from boots to boardroom as they assess decarbonisation options and technologies; help them understand the financial, policy and practical aspects linked to deployment of solutions; and access the financing necessary to support deployment.”

ESG dilemmas

There is more to this evolving backdrop than setting and meeting ambitious environmental goals, yet, in ERM’s experience, the advice provided by consultants – and requested by miners – has historically been focused on individual ESG domains.

“This has often been driven by their realisation that their (miner’s) in-house policies and standards require updating,” Pearce said.

Louise Pearce, ERM Global Mining Lead

A siloed or disaggregated approach to ESG strategy development often reduces risk, but rarely generates value for the enterprise at hand, according to Pearce.

“What we have learned is that in order for organisations to create value, they need to focus on value drivers for the corporation,” she said. “These value levers are typically influenced by an integrated suite of ESG dimensions. For example, this could be looking at carbon emissions, connected with water use and nature, connected with local socio-economic development.”

“Sustainability and ESG are about understanding the inter-relationships between our social, natural and economic environments over the longer term. It cannot be about addressing one topic at a time or responding to the loudest voices.”

This is where ERM’s ‘second-generation’ ESG advice, which is driven by data and opportunities to create value as well as manage risk, is fit for the task.

“We are also finding that, at its heart, the central issue to second-generation ESG performance delivery/improvement for our clients is not just the strategy, but a willingness of organisations to reflect on their core values, how these have driven their traditional approaches and decisions and how they will need to evolve these if they want to achieve a genuine brand and reputation for ESG and achieve impact on the value drivers they have selected,” she added.

Such thinking is proving definitive in ERM’s mining sector mergers and acquisition due diligence.

“We have multiple experiences where clients have asked us to carry out an ESG review of a target portfolio, only to find that there is too great a gap between the target’s ESG asset footprint to align them with the client’s standard – or, that the carbon, water, closure or tailings profile of the target carries a too high-risk profile,” Molyneux said.

This is presenting clients with a dilemma as they want to increase their exposure to certain minerals, but are, in some instances, finding M&A is a too high-risk route. At the same time, the lead time to find and develop their own new assets is longer than they would wish for building market share.

Such a market dynamic opens the door for juniors looking for assets early in their lifecycles, yet it places a high load on the management teams of these companies to think strategically about the ESG profile of the asset they are setting the foundations for to eventually appeal to a potential acquirer.

“This is, in itself, a dilemma because, typically, the cash scarcity at the junior stage leads management teams to focus on the immediate technical challenges, sometimes at the cost of also addressing the priority non-technical challenges,” Bowden said.

Those companies who can take a strategic view on the ESG requirements of the future – rooted in a deep understanding of how to deliver change on the ground – will be best placed in such a market, and ERM says it is on hand to provide the tools to develop such an appropriate approach.

(Lead photo credit: @Talaat Bakri, ERM)

MEC Mining looks to fill geotechnical engineering gap with new services arm

Australia-based engineering consultancy MEC Mining will soon launch a geotechnical services arm to cater for industry demand, the company has announced.

The geotechnical engineering division will be led by MEC Mining’s Technical Services and Western Australia Manager, Erin Sweeney (pictured), who is an internationally experienced Geotechnical Engineer.

MEC appointed Sweeney to open its Perth, Western Australia, branch in November last year and in that short time her team has grown from three to 11, with plans to now employ a geotechnical engineering team as well.

After discussions with clients, and through research, she recognised there was a shortage of geotechnical engineers in the market and knew clients would benefit if MEC offered the service as an in-house speciality division, the company said.

“We are really excited to launch the geotechnical engineering arm, which will complement our technical and advisory service arms,” Sweeney said. “I’d like to see us grow to be the most trusted geotechnical services brand in mining globally.

“We will be providing a one-stop-shop, as previously clients may have had to manage multiple consultants and now all trusted advisers will be working together to collaborate more effectively.

“For our clients in the mining sector, it gives them just one consultancy to go to for both their geotechnical services and mining design needs.”

MEC Mining General Manager, Christofer Catania, said MEC’s move to provide a geotechnical services arm was part of the company’s vision to provide clients a full suite of technical services.

“It’s exciting to further grow MEC’s service offerings to meet the needs of our clients,” Catania said. “Since establishing the Western Australian office in November, our team has continued to grow and it’s a trend we see continuing despite these somewhat challenging economic times.

“We see Western Australia as the front and centre of the next mining uplift, with some great projects coming online.”

Cyient and IG Partners to create ‘unique value proposition’ for mining industry

Cyient, a global engineering and digital technology solutions company, has agreed to acquire specialist Australia-based consulting firm, IG Partners, to expand its end-to-end offerings for the local and regional resources sector.

The acquisition will enable customers to take advantage of the growing convergence of operational and information technologies by leveraging the synergies between Cyient’s proven ability in operational efficiency, asset optimisation, and digital transformation, and IG Partners’ value creation and transformation in asset and capital-intensive industries, Cyient said.

“Cyient has a growing presence in Australia, providing solutions to the mining, oil and gas, rail, telecom, and utility industries,” the company said. “With rapid sectoral growth in the region, the company continues to invest in expanding its footprint and creating sustainable value for all stakeholders. The IG Partners transaction, the terms of which are confidential and remains conditional on regulatory approvals, will result in Cyient taking full ownership of the global partnership.”

IG Partners was formed in 2012 and has a team consisting of partners, practice leads, consultants, project managers and analysts. The partnership will enable the development of a unique customer proposition, Cyient says, allowing customers to take full advantage of the growing convergence between operational and information technologies.

Cyient’s Managing Director and CEO, Krishna Bodanapu, said: “Mining is an important focus industry and Australia a strategic region for Cyient’s growth. The mining industry is getting transformed with convergence of digital technologies. With this investment, the powerful synergy of Cyient’s digital execution capabilities and IGP’s advisory expertise creates a unique value proposition for the industry. This acquisition also adds to our footprint in Australia, which is an important region for our future growth.”

Herman Kleynhans, Founder and Managing Partner, IG Partners, said: “Our team welcomes the firm’s proposed acquisition by Cyient as a transformative moment for both businesses. In joining Cyient, we see tremendous synergies in supporting our customers’ benefit from Industry 4.0. The combination of Cyient’s leading engineering and technology solutions and IG Partner’s mining and utilities expertise uniquely positions us to support value and productivity breakthroughs leveraging digital technologies.”

IG Partners’ customers include large mining players comprising multiple Fortune 500 companies, according to Cyient.

“The company has well-established methodologies and a proven track record in transformation within asset and capital-intensive industries,” it added. “It is intended that all its key management personnel will stay with the business under Cyient ownership.”

Datamine adds mining consultancy expertise to portfolio with Snowden buy

Datamine, a wholly owned subsidiary of Vela Software, has acquired mining consultancy and software business Snowden.

As part of the transaction with Datamine, the Snowden brand will be retained, it said, with the company explaining: “We are dedicated to maintaining consistent high levels of expertise and support that you have come to expect from Snowden.”

Being part of the Datamine group will provide long-term benefits for Snowden, its staff and customers, according to the company. “We will have the opportunity to strengthen and grow our business by leveraging resources including an office network across 20 countries, and deep software expertise.”

Tarrant Elkington, Global Manager, Snowden, said: “Snowden has a proud 33-year history, evolving from a geological consulting company to a diversified advisory consulting, software and training business. This acquisition marks the next step on our growth journey.

“The software expertise and global footprint of Datamine offers tremendous opportunities for the growth of our business and to improve the experience of our clients. For example, we will now be able to offer in-country support to our supervisor clients in South America. And we can easily and cost-effectively expand our consulting business to other countries.

“This is a great day for our business, and our people, and we look forward to exploring the synergies that Datamine offer.”

John Bailey, Executive General Manager at Datamine, said: “We are excited to acquire the Snowden business which aligns closely with our existing offering to the mining industry. Snowden has a strong, expert brand with a wealth of experience and has developed industry-leading products that complement Datamine’s software portfolio.”

Snowden refers to Datamine as the world’s leading provider of technology to seamlessly plan and manage mining operations.

“With operations in 20 countries, Datamine provides solutions spanning exploration, resource modelling, mine planning, operations, logistics and marketing to over 6,000 companies worldwide,” Snowden said.

Supervisor is a complementary solution to Datamine’s existing resource estimation suite, offering a simple intuitive interface and workflow, advanced local and global estimation optimisation functionality and compatibility with all major mine planning software packages.

Reconcilor provides a robust system to identify differences between grade and tonnage estimates, plans and actual mine production. The Reconcilor solution is highly complementary to Datamine’s inventory tracking and metal balancing solutions, with several customers already using the combined systems.

Deloitte builds out operational transformation services offering with Global IO

Deloitte has acquired Global IO, a leader in integrated operations (IO) in the energy and resources (E&R) and mining sectors, as the Fortune 500 company aims to offer clients a “complete delivery of operational transformation services”.

Founded in Perth, Australia, in 2014, Global IO operates globally and has offices in Montreal, Perth, and Santiago, Chile.

In mining, specifically, companies have looked to leverage integrated operations to improve productivity and lower their cost base. Majors like Rio Tinto (remote operations centre, pictured above), BHP and Vale have installed remote integrated operations centres to coordinate iron ore production hubs in Australia and Brazil, respectively.

Global IO is joining Deloitte’s Consulting practices in Canada, Chile and Australia, more specifically as part of the operations transformation offering.

Anthony Viel, CEO, Deloitte Canada, said: “This addition is a key differentiator for our firm, and a major win for our clients who will truly benefit from a one-stop shop approach. Global IO’s strong reputation, deep relationships within the E&R and mining sectors, and credibility will allow us both to expand our efforts and provide dependable services to our clients from start to finish in a more agile and deliberate way.”

By joining Deloitte, Global IO will significantly expand its services, including how it engages in change management, project management, analytics, and digital strategy opportunities, as well as a range of unique operational productivity improvement projects.

“The collaboration with Global IO, which in the past has successfully worked with Deloitte on several large engagements with key clients, will also further the firm’s qualifications and capabilities in delivering end-to-end integrated operations projects independently,” Deloitte said.

With a team of qualified professionals in design, implementation, operations management process, and integrated operations deployments in the E&R and mining sectors, 17 Global IO employees will be joining the firm across offices in Montreal, Vancouver, and Calgary (Deloitte Canada), Santiago (Deloitte Chile), and Perth (Deloitte Australia). Global IO partners joining Deloitte include: Dominic Collins, Partner, Deloitte Chile; Pieter Lottering, Principal, Deloitte Australia; and Eamonn Treacy, Director, Deloitte Canada.

Collins said: “This is a great opportunity for us to not only better serve our clients under the banner of Deloitte, but to expand our services with new resources, to broaden our scale and scope. We’re now able to increase our efforts in areas like change management, digital strategy, and analytics, and deliver dependable services our customers, and Deloitte’s, have come to expect.”