Australia's Leading Online Business Magazine
Subscribe Today. It's Free!

Barminco Limited

An unrivalled hard rock underground contract miner

Barminco Limited is on a global path to greatness

For 21 years this team has worked tirelessly, unceasingly, to be the go-to vehicle for any mining house in need of hard rock underground contract mining services, and following its latest triumph—the second largest underground mining contract to be awarded in Australia and the largest contract it has bagged to date—Barminco Limited, of Western Australia, has the global limelight firmly focused on them.

The company that started as a decline mining services provider in Western Australia in 1989—when the technique was in its infancy—has just been awarded a renewal of its contract with AngloGold Ashanti Australia Ltd. for works at the Sunrise Dam gold mine; a five-year contract worth an estimated $500 million over its tenure. In addition to its home ascendency, the group has enviably positioned itself in West Africa where it provides a range of services including those typically seen under the owner-operator mining umbrella, to assist with lacking infrastructure and amenities. Now with three focus areas—Australia, Central Africa and later on, Latin America—there appears to be no stopping this best-in-class hard rock underground contract mining services master.

Growing core competencies globally

In 1995 Barminco was awarded the first of its many full services underground mining contracts, giving the company its opportunity to move from offering not just the development function, but the production mining also. It then diversified into concrete and crushing in 2003, and entered West Africa though a joint venture with Ausdrill called AUMS—African Underground Mining Services. In 2008 operations commenced in Ghana and, in 2009, Barminco exclusively, was awarded a contract for the Sukari gold mine in Egypt. Soon thereafter, the company commenced deep directional diamond drilling operations in South Africa—a component of its service offering which dates back to its first full services contract in Australia in 1995—marking its global navigation according to market demand for its expertise.

“There are two markets of particular interest to us today, starting with Central Africa which began to attract significant amounts of exploration later than the West African market, so it’s more immature but it’s following a similar growth path,” David Noort, Group Client and Commercial Manager tells AuBJ.

“Over the next ten years we expect to see a number of open pit mining projects converting to underground in the central and east African market, as is occurring in the West African market currently.”

With 35 open pit mines currently operating in West Africa—given the techniques Barminco offers in decline underground mining—each mine has a high level of prospectivity for converting to an underground mine as is often the course of events. With this potential comes a healthy outlook for Barminco and its relatively unique capabilities in this space, as well as strong grounds for its burgeoning interest in central African states.

“On a long-term basis the Latin American market has some attraction but it’s not the same current level of strategic imperative as the Central African market is to us—that’s something we’re maintaining on a close-watch basis,” Noort adds.

The group’s projects, past and present, demonstrate its range of capabilities both in Australia, as its position continues to strengthen in West Africa, and as the company also moves into more central African states.

In demand and ongoing growth

Epitomizing the group’s dexterity in stepping into activities typically viewed as the realms of owner-operator, is the AUMS joint venture’s work on Newmont’s Subika mine in Ghana where it has been busy since February 2010.

“After a tender process that comprised several of the world’s specialist underground hard rock mining contractors Newmont engaged us to carry out initial trial mining and exploration at one of their open pit operations that has moved underground in order to evaluate it. It’s potentially a very large operation that is moving into the next stage at the moment and discussions are ongoing,” says Glenn Heard, AUMS’s General Manager.

“We also have the Randgold Loulo gold mine which comprises two contracts for us: There’s the Gara underground mine and the Yalea underground mine. The Loulo operation includes multiple open pit and underground mines, but all of the ore goes through the one milling operation.”

Randgold’s first underground undertakings at the Loulou mine, in Mali, began as a contract mining function. Prior to AUMS’s arrival at Loulo, arrangements for parts of the underground mining function with other contract miners was proving unsatisfactory and having observed AUMS’s performance in Ghana, Randgold elected to bring the company in for the Gara project.

“We really have shown to the client the benefits of having a “fit for purpose” contracting team for meeting market expectations and bringing in a project on schedule. We have taken over a large portion of the owner mining function and returned it into a contract mining function again, which led to the opportunity at Yalea where we’re developing independent access to the ore body below the current level of the mining horizon to establish a new approach to mining it,” Heard says.

“That heavily relies on our core competencies to improve the overall operating performance of the mine. As an example when you compare the development advance rates at Yalea to that of ours at Gara, AUMS have excelled,” Heard says. “The average advance per month at Yalea since project inception has sat at approximately 360 metres from six jumbo machines. Recent AUMS average performance at Gara is exceeding 400 metres (from one jumbo machine). Those sorts of statistics make you start to appreciate our value proposition.”

With its aptitude and experience in the region clearly defined, Barminco is well-placed to act advantageously alongside what Noort explains are a number of factors that cause West Africa’s industry to favour contract mining.

A sustainable, safe and bright future

Accessing supply chain and infrastructure requirements in support of a healthy mining operation in West Africa, Noort says, there are immediate and distinctive differences to doing so compared to Barminco’s native Australia where, “you can essentially purchase these on a fee-for-service basis because they’re well-established.”

“Companies have to build these themselves and that’s much more of a challenge. Once you have a provider there running multiple operations with obvious benefits to scale servicing those operations, incrementally every subsequent client is provided an even greater value proposition,” he explains.

“That’s why we feel that it’s been a challenge entering the market, but now we’ve done that and the hard yards have been done such as establishing training programs and understanding how to do business there, there is a significant barrier to entry for competitors and AUMS provides a compelling value proposition to our clients.”

Likening West Africa and its many open pits with the propensity to become underground operations as “a Nirvana for the group,” Noort demonstrates why, as the mining industry and operations mature and grow, so will this company. Looking more widely at specific bullish commodities, he says, Barminco sees some significant trends in the copper market.

“Rio Tinto has put out some publicity in the last couple of years, and the way they have it total global copper production will move from the current around 26 per cent from underground sources to anywhere between 40 to 50 per cent by 2025. Primarily that comes from changes in Chile, but certainly it exists around the world too,” he says.

“From a global context I think that advances in exploration technology and being able to find deposits without surface expression hasn’t really matured at the rate of consumption of mineral products and that’s forcing mines to go deeper which favours underground mining a lot.”

With Latin America in its long-term sights, Barminco is currently readying to commence work at the recently awarded $60 million contract for Western Areas’ Spotted Quoll nickel mine. The company will carry out what Noort describes to be very typical work in terms of services: Starting from the initial portal development and accessing the ore body, developing and delineating the ore body, then commencing the production mining process—and in terms of its future service offering there are no plans to change doing what the company does so well.

“We certainly intend to remain doing what we are today, that is underground hard-rock miners through and through, and we don’t have any intention of diversifying from that in the immediate future. Underground coal mining has been raised—although there are of course significant differences in knowledge and approach required to enter that market,” he says.

“We say we’ll do anything that involves underground hard rock mining, or at least we’ll consider it. There are a number of services we provide our clients on a sub-contract basis, so we can look to acquire this capability internally, organically or inorganically, depending on the application”

Drawing on its experiences globally, Barminco will also pay continual attention to its work in place of owner operator activities—work which Noort says will be increasingly prominent as the group continues to internationalise.

“This includes evaluation of deposits, finding good mining strategies, planning, advisory—even engineering services and project management. Typically in the domestic market such requests aren’t as common (there are plenty of established providers) but in countries like Africa those options realistically don’t exist and clients are increasingly turning to us,” he says.

“As those requests come in we’re looking to develop that capability in-house so that’s another option for us.”
It is one option of many for the company today, but it is also evident that Barminco does not take a scattergun approach to plans for furthering the exponential geographical, client and capabilities growth it has already achieved. For any miner in West or Central Africa grappling with a lack of supply chain and infrastructure, the company is on hand to provide solutions. For any opportunity to build client relations, expand on previous works or provide full services hard rock underground contract mining, it is the first name that springs to mind. And for any mining house looking for an experienced, responsible, safe and extremely capable contractor to take on a challenge, there are few contenders that can match up to Barminco’s progress both historically and today.