Knowl­edge is the rock of ages

– There’s a lot to learn when you work for a com­pany like BHP and there’s even more to learn when you jump from a min­ing gi­ant to a small com­pany that has only been in ex­is­tence for 13 years. Yet Ben Ham­mond has taken it all in his stride and this young g

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Ben Ham­mond wanted to work in eco­nom­ics, but he found him­self study­ing ge­ol­ogy, be­came a ge­ol­o­gist, worked for BHP and is now the CEO of Cen­trex Metals. The four years he spent at BHP were in­valu­able, par­tic­u­larly when he moved away from ge­ol­ogy and into busi­ness im­prove­ment.

“That was the best thing I ever did, be­cause that al­lowed to me work across the busi­ness,” Ben says. “I worked in ports, rail and main­te­nance and had lit­tle to do with ge­ol­ogy for a few years there.”

The BHP busi­ness im­prove­ment pro­gram, which al­lowed its em­ploy­ees to cross all its busi­ness sec­tors, helped Ben to fine tune sev­eral skills that go a long way in busi­ness man­age­ment in both big and small com­pa­nies.

“You’re not work­ing full-time in any one area, you’re gain­ing ex­pe­ri­ence in all ar­eas from long-term plan­ning, through to pro­cess­ing rail ports and deal­ing with in­vestors and staff at all lev­els from a whole sup­ply chain point of view.”

Ben gained knowl­edge in a myr­iad of ar­eas.

“It helps to know a bit about a lot of things across the busi­ness, es­pe­cially if you are mov­ing into a smaller com­pany with fewer re­sources. It’s not like a big com­pany where you have ex­perts in spe­cific ar­eas to lean on. Al­though you can’t be an ex­pert in all ar­eas it helps to at least be able to ask the right ques­tions par­tic­u­larly in a small com­pany where you’re re­ly­ing on a lot of ex­ter­nal con­sul­tants. The ac­tual busi­ness im­prove­ment side helped me a lot as well: hav­ing all those sta­tis­tics in your head, the var­i­ous parts of the op­er­a­tions and their ex­pected ef­fi­cien­cies or where the bot­tle­necks may be, and just know­ing which key ar­eas to deal with first. I also had in­volve­ment with the tech­ni­cal mar­ket­ing that aided to un­der­stand the cus­tomer’s end. So all this as a back­ground com­ing into Cen­trex was very handy.”

Dur­ing the first 6 years of his ca­reer Ben was also study­ing his MBA through cor­re­spon­dence as he moved from town to town, and state to state. It was an MBA de­signed for en­gi­neers, and re­lated back to min­ing and petroleum, so held him in good stead.

“I could ap­ply it di­rectly back to ev­ery­thing I did. I wouldn’t rec­om­mend an MBA to some­one who al­ready has a commercial back­ground, but, cer­tainly for a ge­ol­o­gist, sci­en­tist, or an en­gi­neer, I think it’s per­fect be­cause it gives you those ex­tra commercial skills you don’t nec­es­sar­ily have.”

When Ben moved to Cen­trex Metals in 2007 as project man­ager he made an im­me­di­ate im­pact, jump­ing straight into the deep end to help fa­cil­i­tate ne­go­ti­a­tions with Bao­tou Iron & Steel on the Bungalow Mag­netite Joint Ven­ture lo­cated on the north­ern Eyre Penin­sula, South Aus­tralia. While a HOA for the joint ven­ture was al­ready in place, tech­ni­cal due dili­gence was just start­ing and de­tailed agree­ments re­quired draft­ing, al­low­ing Ben to ap­ply both his tech­ni­cal and commercial skill sets.

“What cer­tainly be­came clear was there was still a long way to go to ac­tu­ally get a joint ven­ture in place and most of that was on the tech­ni­cal, due dili­gence side. So my first role was to re­ally con­vince them.”

While the ne­go­ti­a­tions with Bao­tou were on­go­ing, in 2008 he com­menced mar­ket­ing the Com­pany’s projects on the south­ern Eyre Penin­sula which lead to ne­go­ti­a­tions for the Eyre Iron Mag­netite Joint Ven­ture with Wuhan Iron & Steel.

Af­ter pro­tracted ne­go­ti­a­tions with the two Chi­nese steel ma­jors and in­vest­ment ap­provals pro­cesses, both of the joint ven­ture trans­ac­tions were com­pleted in 2010.

The Bungalow joint ven­ture gives Bao­tou the right to a 50% in­ter­est in the Bungalow mag­netite project by spend­ing the first $40 mil­lion on de­vel­op­ment. To date Bao­tou has spent $24 mil­lion and the project has de­fined 338Mt of Min­eral Re­sources. The project is cur­rently the sub­ject of a Prefea­si­bil­ity Study tar­get­ing a 5Mtpa mag­netite con­cen­trate oper­a­tion.

For their 60% in­ter­est in the Eyre Iron Mag­netite Joint Ven­ture, Wuhan

paid Cen­trex $78 mil­lion di­rectly plus a fur­ther $75 mil­lion in de­vel­op­ment fund­ing. The joint ven­ture’s flag­ship project at Fu­sion has 680Mt of Min­eral Re­sources to date and fur­ther drilling is un­der­way to ex­pand the re­sources and com­plete a Prefea­si­bil­ity Study for an­other 5Mtpa mag­netite con­cen­trate oper­a­tion.

Both mag­netite joint ven­tures will trans­port the prod­ucts be­tween 40km and 100km to Cen­trex’s Port Spencer de­vel­op­ment, an­other joint ven­ture with Wuhan.

“The $78 mil­lion we got di­rectly into the com­pany as part of the Wuhan deal is re­ally why we’re in such a strong cash po­si­tion right now. We moved early to a model where we didn’t have to rely on the eq­uity mar­kets over here.”

Com­mence­ment of the Eyre Iron Mag­netite Joint Ven­ture be­tween Cen­trex and Wuhan saw him sec­onded at the de­sire of the Chi­nese as Chief Op­er­at­ing Of­fi­cer to Eyre Iron Pty Ltd, the joint ven­ture man­age­ment com­pany, to over­see its im­ple­men­ta­tion. He spent two years in the role at the same time as he was ful­fill­ing his role as Chief De­vel­op­ment Of­fi­cer at Cen­trex, be­fore be­ing ap­pointed act­ing CEO of Cen­trex in Fe­bru­ary 2013 and CEO in July. He re­mains a Di­rec­tor of Eyre Iron as well as Port Spencer Pty Ltd. Ben could see what needed to be done to move Cen­trex for­ward while he was in the role of Chief De­vel­op­ment Of­fi­cer. His goal was to take Cen­trex back to a com­pany that de­vel­oped projects rather than an­other as­pir­ing miner.

“The big­gest as­pect we’ve started work­ing on, that’s re­sulted in a sup­ple­men­tary deal with Wuhan re­cently, is to try to iso­late the eq­uity needs of the joint ven­tures from the par­ent com­pany, and to free up our cash and al­low us to keep re­peat­ing the model of de­vel­op­ing projects and find­ing for­eign part­ners.”

In 2013 Ben worked on yet an­other Chi­nese backed joint ven­ture. The

The CSL Group is the world’s largest owner and op­er­a­tor of self-un­load­ing ves­sels, and spe­cialises in pro­vid­ing fast, re­li­able and en­vi­ron­men­tally-re­spon­si­ble ship­ping and han­dling ser­vices. The com­pany of­fers cus­tom­ized tran­ship­ment and top-off ser­vices to iron ore cus­tomers around the world.

Goul­burn zinc-lead project is lo­cated in the Lach­lan Fold Belt in New South Wales. Geo­phys­i­cal map­ping of the project has shown promis­ing con­duc­tor tar­gets lo­cated on the edge of a ma­jor grav­ity high ad­ja­cent his­tor­i­cally de­fined zinc, lead and cop­per min­er­al­i­sa­tion. Shan­dong 5th Geo-Min­eral Prospect­ing In­sti­tute has signed a joint ven­ture agree­ment to spend $2 mil­lion on ex­plo­ration in 2014 to earn a 35% in­ter­est. Shan­dong have fur­ther op­tions to earn up to 80% by fund­ing a project through to pro­duc­tion should a de­posit be de­fined. Com­ple­tion of the joint ven­ture awaits Chi­nese Govern­ment ap­provals.

“A big part of mar­ket­ing and ne­go­ti­a­tions has been pre­par­ing pre­sen­ta­tions and learn­ing how the Chi­nese digest and re­spond to in­for­ma­tion. I think that’s the key learn­ing we’ve had in this com­pany is how to present in­for­ma­tion to the Chi­nese – it is crit­i­cal. You have to re­alise the lev­els of the or­gan­i­sa­tion you’re pre­sent­ing to. The right in­for­ma­tion has to go to the right de­part­ments.”

The de­vel­op­ment strat­egy has the sup­port of share­hold­ers. Ben says the com­pany is very tightly held, with the top 20 share­hold­ers own­ing nearly 80% of the busi­ness. This causes liq­uid­ity chal­lenges, but at the same time re­la­tion­ships are close and ev­ery­one is on board with the di­rec­tion.

As the min­ing in­dus­try has soft­ened, Cen­trex’s big­gest op­por­tu­nity but also chal­lenge is to look for ac­qui­si­tions.

“We re­viewed hun­dreds of op­por­tu­ni­ties and it’s find­ing those next projects that is be­com­ing more dif­fi­cult, cer­tainly out­side of the ma­jors,” Ben says. And there are re­lated prob­lems. “The in­dus­try needs more com­pe­ti­tion. If the coun­try’s go­ing to grow its re­sources to be able to com­pete with other re­source rich coun­tries, costs need to come down, we’re start­ing to see that al­ready but it’s got some way to go yet. Land ac­cess ac­tu­ally is one of the great­est is­sues fac­ing the in­dus­try at the mo­ment. Many of the re­main­ing ex­plo­ration op­por­tu­ni­ties are in higher use land ar­eas.”

“So we’re be­ing proac­tive in terms of land ac­cess. We’re not go­ing to shy away from it; we’ll try and find commercial so­lu­tions. We’ve had great suc­cess on the Eyre Penin­sula and NSW to date. We’re the first in 20 years to get on at Goul­burn, so we’re try­ing to build a com­pet­i­tive ad­van­tage in that area and I think that’s the next fron­tier.”

The strength of Cen­trex is that it can lever­age be­tween each project; there are great syn­er­gies that al­low this to hap­pen even though the com­pany op­er­ates across two re­gions. Ben is also look­ing at new tech­nolo­gies and ways to ease the bur­dens on the com­pany. Re­cently he adopted a new style tran­ship­ping model for the Port Spencer Joint Ven­ture on the Eyre Penin­sula.

“Ports have al­ways been a chal­lenge, par­tic­u­larly for iron ore, but we were cer­tainly watch­ing the de­vel­op­ments in tran­ship­ping up the coast from us, and af­ter 12 months could see it would be a suc­cess­ful model. It’s a ma­jor step change in tech­nol­ogy. Tra­di­tion­ally just the op­er­at­ing costs could be pro­hib­i­tive, but these new ‘mini-ships’ are self-un­load­ing and self-moor­ing, so they can com­pete on op­er­at­ing costs, while re­duc­ing the port and in­fra­struc­ture costs dra­mat­i­cally. Our jetty length sig­nif­i­cantly re­duced and we don’t need a full size wharf, we only need a point ship loader as they can move them­selves un­der­neath it for load­ing. We knocked al­most half the cap­i­tal off and yet can still ramp up with mul­ti­ple or larger tran­ship­pers. This kind of so­lu­tion al­lows a smaller project to jus­tify its own port.”

Ben is look­ing at au­ton­o­mous min­ing and new tech­nolo­gies around non-in­va­sive ex­plo­ration to aid in the land ac­cess is­sues. He sees his role as seek­ing out po­ten­tial op­por­tu­ni­ties and get­ting for­eign in­vestors on board. It’s been a quick rise, but you feel his skills ac­quired across a range of projects and large and small busi­ness holds Cen­trex in good stead.

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