Ser­vice com­pa­nies hope­ful of im­prov­ing min­ing con­di­tions

Ser­vices com­pa­nies and con­trac­tors are of­ten a casualty of a min­ing in­dus­try down­turn. We talk to com­pa­nies ser­vic­ing the sec­tor in Pa­pua New Guinea about how they have coped with the down­turn, and the po­ten­tial for a turn­around.

Business Advantage Papua New Guinea - - Mining -

De­spite dif­fi­cult con­di­tions in Pa­pua New Guinea’s min­ing in­dus­try, Li­hirian landowner com­pany, Ani­tua Min­ing Ser­vices, is hope­ful of a re­bound and is con­sid­er­ing a num­ber of new op­por­tu­ni­ties that would grow its project port­fo­lio.

Min­ing-fo­cused com­pa­nies in PNG con­tinue to face chal­lenges as the coun­try’s min­er­als sec­tor strug­gles to re­cover from a down­turn that has been felt on a global scale.

While con­di­tions have been fore­cast to im­prove, with Deloitte PNG say­ing in its Novem­ber bud­get anal­y­sis that the min­ing sec­tor will grow by 12% in 2015 as new strate­gic min­ing plans take ef­fect, Ani­tua Min­ing Ser­vices gen­eral manager Mark Ed­wards be­lieves a re­bound in PNG will take more time.

Ed­wards says over the past 18 months in par­tic­u­lar Ani­tua Min­ing Ser­vices had felt the ef­fects of the in­dus­try down­turn in PNG.

‘Con­di­tions will im­prove but it is go­ing to take time—it is the same through­out PNG—IT has been a bit of a roller coaster but I don’t think the in­dus­try here has been hit as hard as it has been else­where in Australia,’ Ed­wards tells Busi­ness

Fu­ture op­por­tu­ni­ties

De­spite an out­look that will re­quire pa­tience, Ed­wards says the Ani­tua min­ing ser­vices team was cur­rently con­sid­er­ing a num­ber of new projects to bol­ster its port­fo­lio.

‘PNG is ac­tu­ally pre­sent­ing it­self with quite a few op­por­tu­ni­ties (for us) at the mo­ment. We have to make sure what we choose is sus­tain­able and it is go­ing to be the right thing by the landown­ers—at the end of the day we work for the Li­hiri­ans,’ Ed­wards ex­plains.

Lower ac­tiv­ity

En­gi­neer­ing com­pany Kramer Ausenco is an­other that has been af­fected by the min­ing down­turn, with Chief Ex­ec­u­tive Of­fi­cer Frank Kramer say­ing the lower ac­tiv­ity had prob­a­bly been the ‘most no­table as­pect’ of the com­pany’s per­for­mance in 2014.

Kramer adds that there is no sign of a rapid change to th­ese con­di­tions, but PNG’S ma­jor mines do have the po­ten­tial to de­liver a lift in ac­tiv­ity.

‘The re­ally large min­eral re­sources projects—wafi Golpu and Frieda River—they’re still just tick­ing along, there’s no de­fin­i­tive sign that any­thing sig­nif­i­cant is go­ing to hap­pen,’ Kramer says.

‘Li­hir, which is a brown­field site also, can ac­tu­ally kick back up more quickly if the Newcrest peo­ple de­cide to do some­thing with it, and that’s got a much shorter re­sponse time than the green field sites.’

Tech­nol­ogy pull

While in­vest­ment into ex­plo­ration and min­ing ex­pan­sions has fallen, op­er­a­tional op­ti­mi­sa­tion con­tin­ues to be a key part of strate­gic plans for min­ing com­pa­nies.

All­commcr PNG man­ag­ing direc­tor Luke Byer says there has been quite a sig­nif­i­cant in­crease in min­ing com­pa­nies seek­ing out the ICT ser­vices it pro­vides.

‘Min­ing is some­thing that has al­ways been on our radar and we have seen that area grow. Com­mu­ni­ca­tions are of key im­por­tance to them,’ Byer says.

‘We are find­ing work with the more es­tab­lished min­ers in the coun­try. Some of the more ju­nior min­ers and their ex­plo­ration projects are only in their in­fancy and have been wound back or shelved un­til mar­ket con­di­tions im­prove. But cer­tainly .the more es­tab­lished min­ers are al­ready there, al­ready ac­tive and they know what they want.’

‘Con­di­tions will im­prove but it is go­ing to take time’

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