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Far-sighted mining houses are delving deeper into the technology resources of their suppliers, aiming more than ever to leverage outside innovation for their own productivity.

Protracted pressure on margins over many years has put miners’ focus squarely on productivity. Lower commodity prices with a steadily rising cost base and growing compliance requirements have created a perfect storm. Africa has not been left behind in terms of technology-focused efforts to raise productivity, with the development of one of the world’s first automated mines in Mali. To pursue this direction, mines are getting closer to suppliers, to better understand what they have to offer – both now and in the future.

Making this possible is the continuous advance in digital technology and data management. For success depends not just on engaging a supplier’s new technology; it must integrate – preferably seamlessly – with the mine’s ever more complex system of planning, monitoring and reporting.

The traditional ‘commodity bid’ by a mining company’s procurement department is becoming less and less useful to a corporate productivity strategy. When a mine places an order for the supply of emulsion explosive, for instance, the tender may have traditionally prioritised the price element. If a mine has a strategic focus on raising its milling efficiency, however, it will be looking beyond the emulsion as a commodity. It will rather be looking at how the supplier can contribute to better blasting methods – to optimise key blasting outcomes like fragmentation. Underground mines will also want to quantify the benefits of emulsions in terms of shaft efficiency, as emulsions do not require dedicated shaft times and can even be dropped into underground workings via dedicated pipelines. In this way, larger miners are increasingly wanting to know about how a supplier’s technology offering will promote long-term productivity gains.

This means that any supplier that talks about ‘partnership’ with mining customers has to put their money where their mouth is – to ensure they have the capacity to integrate their technology systems with mining operations. Only then can mines get the full operational benefit, while properly tracking and quantifying its impact on the whole enterprise.

Technology integration

Mines are looking for productivity tools that integrate with their mine systems. The ‘Internet of Things’ now makes this possible – and technology partners are soon going to be required to connect their solutions with mines’ open data systems.

Transparency

This trend is demanding greater transparency from both sides. Some of the larger mining players are bringing suppliers into their confidence about strategic intentions going forward. At the same time, they are wanting more detail on what is in suppliers’ technology pipelines.

Applied research

Beyond the demand for outcomes-based technology – where the solution performs its current role – mines are increasingly looking for future improvements. This search even includes applied research, exploring completely different ways of doing things.

Innovation track record

Here, the capacity of the supplier to initiate and follow through on applied research is becoming more of a consideration for the mining majors. A supplier’s track record in the ideation and commercialisation of productivity-enhancing technology is likely to become more valued.

The beauty of big data in this context is that suppliers’ impact on productivity could be better gauged, even beyond their specific aspect of a mine’s value chain. As growing volumes of data are collected on each aspect of a mine operation, there are increasingly sophisticated analytical tools to make the data meaningful. This includes drawing links between cause and effect – where improvements in one aspect of mine activity lead to savings or better performance in another.

The growing interest shown by mines in the technology pipelines of their supply partners is an encouraging trend. The insights that this provides will hopefully feed the mining industry’s vision of what may be technologically possible going forward. It will also help guide the direction of much-needed research and development – on which narrow margins have had a depressing effect in recent years.

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The Wits Mining Institute (WMI) at Wits University will hold a three-day ‘Empowering Leaders for 21st Century Mining’ seminar from 6 to 8 August 2019.

Covering important topics relevant for women and leadership in mining, the programme has been carefully designed to inspire, support, empower and develop leaders, said WMI director Professor Fred Cawood. It will also offer continuous professional development (CPD) points. The seminar is aimed at future leaders – especially women – including graduates, supervisors and managers in the mining sector.

“The need for growing talent and leadership for the South African economy – and the mining sector in particular – is greater than ever before,” said Professor Cawood. “The disruption that the fourth industrial revolution is causing is significantly affecting twenty-first century mining, employment and skills.”

Going into the future, he noted, there are uncertainties on the future of mining and work.

“To explore these important concepts, the seminar sessions will make use of exciting methodologies, including visits and reflection sessions – for application and impact back into the workplace,” he said.

Three modules will be covered during the three days. The first module – Introducing 21st Century Mining – has a strong focus on 21st century mining. The second is Transformation in Mining, in which leaders from industry and business share insights on transformation and leadership. The third module is Leadership for 21st century mining; this aims to empower leaders through the tools of self-awareness, personal development, mentoring, coaching, emotional intelligence and networking.

Included in the programme is a visit to the Wits Sibanye-Stillwater Digital Mining Laboratory (DigiMine), which is a 24/7, digitally monitored, realistic underground mining environment.  There will also be a visit to the exciting Wits Tshimologong Digital Innovation hub in Braamfontein.

The WMI is a centre of excellence to promote innovation and sustainability in the extractive sectors through developing skills and technology. It is part of the Faculty of Engineering and the Built Environment at Wits University in Johannesburg.

Further information is available by calling Eunice Sediti at +27 11 717-1188 or emailing Eunice.Sediti@wits.ac.za. Registrations are required by 1 July 2019, and can be made at https://wits-enterprise.co.za/c/empowering-leaders-for-21st-century-mining.

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MiningNe.ws by Mpinane Senkhane - 18h ago

South Africa’s struggling gold industry has suffered yet another humiliation, losing its status as continent leader to Ghana.

The country that led global gold production for a century and extracted about half the bullion ever mined is now Africa’s second-largest gold producer. Output is shrinking as operators capitulate to stubbornly high costs, regular strikes and the geological challenges of tapping the world’s deepest mines.

Meanwhile, Ghana, a country whose gold mining industry dates back to the 19th century, is benefiting from lower-cost mines, friendlier policies and new development projects.

South African industry stalwarts AngloGold Ashanti and Gold Fields are shifting their focus to other countries – including Ghana – where deposits are cheaper and easier to mine. The largest remaining gold miner in South Africa, Sibanye Gold, is cutting thousands of jobs and diversifying into platinum group-metals as it struggles to contain costs.

The difficulties facing South African gold mines mean output is contracting even though it’s got the world’s second-largest reserves of the metal, according to estimates from the US Geological Survey.

In Ghana, gold output jumped 12% in 2018, according to data from the Ghana Chamber of Mines. Small producers account for the largest share of the total, although Ghana also hosts some of the world’s biggest gold miners, including No. 1 producer Newmont Goldcorp. Although Newmont is exploring in Ethiopia, Ghana is the only place in Africa where it operates.

The West African nation’s output will get a further boost when AngloGold Ashanti’s Obuasi operation, previously overrun by illegal miners, restarts later this year. Production from Obuasi is forecast at 350 000 to 450 000 ounces of gold annually during the first ten years.Gold Fields, which has operated in Ghana for 26 years, says authorities there understand what makes for a “sound” business environment. Ghana cut corporate taxes in 2016 and in 2017 changed Gold Fields’ mineral royalty to a sliding scale based on the gold price, from a 5% flat rate.

“The government of Ghana’s 10% free-carry stake in all mining companies provides a level of security to the investment,” said Sven Lunsche, spokesman for Gold Fields.

Back in South Africa, a dearth of exploration and investment means the sector that once powered SA will continue to shrink, said Mineral Resources and Energy Minister Gwede Mantashe. As South Africa’s 130-year-old industry limps toward its final years, mining investors must look beyond gold for better returns, he said.

“Gold is an old sector and naturally it will decline,” Mantashe said. “New minerals that are discovered are becoming more important.”

– Bloomberg
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Sibanye-Stillwater said on Wednesday about 3,450 jobs would be lost in the proposed restructuring of the South African company’s gold mining operations, following financial losses at some of its mines since 2017.

The number of job losses is lower than a February forecast that put layoffs at about 5,870 employees and 800 contractors.

The precious metal miner said it had concluded talks with stakeholders on restructuring its gold operations following financial losses at the Beatrix 1 and Driefontein 2,6,7,8 shafts since 2017, with only 3,450 jobs now affected.

Voluntary separation, early retirement and natural attrition would account for the bulk of the affected jobs, with forced layoffs limited to about 800 employees and 550 contract workers, it said in a statement.

Gold producers in South Africa have had profits squeezed by rising costs, labour unrest and declining grades. But job cuts are politically sensitive in South Africa, where the unemployment rate is more than 27 percent.

“Although restructuring is a difficult and emotive process, the sustainability of our remaining operations is our primary focus,” Chief Executive Officer Neal Froneman said.

“To ensure further sustainability of the West Rand gold mines, avoiding premature mine closure will require an ongoing regional approach to reduce costs through the rationalisation of infrastructure and services, including a regional mine water management solution.”

As part of the agreements, Driefontein 8 shaft would remain in operation as long as it makes a profit, on average, over any continuous period of three months, after accounting for all-in sustaining costs, the miner said.

That shaft would provide extended employment for about 970 employees and 55 contractors, but in the event that the operation became loss making again, it would be placed on care and maintenance with immediate effect, Sibanye-Stillwater said.

Beatrix 1 and Driefontein 2 shafts would be placed on care and maintenance, while Driefontein 6 and 7 shafts and Beatrix 2 plant would be closed, the company said

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Sandvik Mining and Rock Technology - YouTube

Sandvik Mining and Rock Technology Southern Africa showcases mining solutions, which have been developed in conjunction with mines to boost overall safety and productivity across all types of mines. Delivering first class service and innovation.
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The world’s 40 largest mining companies continued to consolidate their stellar performance of the past several years by delivering steady growth in 2018 according to PwC’s Mine 2019report released yesterday.

  • Revenue up 8% to $683 billion
  • EBITDA up 4% to $165 billion
  • Record dividend paid to shareholders of $43 billion up 13%
  • Market capitalisation of the Top 40 down 18% to $757 billion, 31 Dec 2018 with partial recovery thereafter

As a group, the Top 40 increased revenue by 8%, buoyed by higher commodity prices and marginally improved production. They also boosted cash flows, paid down debt and provided a record dividend to shareholders of $43 billion.  Forecasts indicate continued steady performance in 2019. Revenue should remain stable, with weaker prices for coal and copper offsetting marginally higher production and higher average prices for iron ore.

Yet investors seemed unimpressed by the Top 40’s result, judging by market valuations, which fell 18% over 2018. While total market capitalization rose in the first term of this year, it remains 8% down compared to the end of 2017.  Over the past 15 years, total shareholders’ return in mining has lagged that of the market as a whole as well as comparable industries such as oil and gas.

Michal Kotzé, PwC Africa Energy Utilities & Resources Leader says: “In spite of the strong operating performance of the world’s top miners, there is still more room for improvement for mining to continue to create and realise value in a sustainable manner. Both investors and other stakeholders have concerns about the mining industry’s ability to respond to the risk and uncertainties of a changing world.

“Globally, stakeholders are concerned that the industry is lagging when it comes to a number of factors that have not been a traditional focus of the mining industry. These include dealing with emissions, investing in differentiating technology and digitisation, engaging more proactively with consumers and building brand.

“The mining industry will have a window of opportunity to adapt to the growing and changing expectations of stakeholders. By utilising technology to operate safely and more efficiently, addressing global concerns, and maintaining a disciplined strategy to create ongoing value for its stakeholders, the industry can forge a better future for all beneficiaries of mining.”

 A chance to fix brand mining

With strong balance sheets and cash flow, now is the time for the mining industry to address the issues weighing down market valuations. Climate change, technology and changing customer sentiment are among many of the business challenges. In order to restore faith in ‘brand mining’, the top miners will need to prove they are keeping up with the pace of change. Miners have a critical role to play in addressing the awareness gap between the brand of mining and the benefits of mining.

Balance sheets remain strong; capital expenditure up but slow

In 2018 the Top 40 paid down $15.5 billion in net borrowings, resulting in the gearing position dropping below the 10-year average. All liquidity and solvency ratios improved during the year, leaving the world’s largest miners with strong balance sheets and cash flows.

In line with expectations, capital expenditures started to rise again, albeit from historically low levels.  The 13% increase over the previous year to $57 billion suggests that miners are continuing to proceed cautiously; approximately half of the capital expenditure in 2018 was for ongoing projects.

Copper and gold dominated spending in 2018, attracting $30 billion of investment. Capital expenditure on coal was consistent, year on year, and we expect miners will maintain current production levels while the coal price remains high.

Shareholders, government and other stakeholders rewarded

An 11% lift in operating cash flows has allowed the Top 40 to increase shareholder distributions in 2018 to a record $43 billion. Dividend yield for the year was 5.5%. There was a notable jump in share buybacks to $15 billion, up from $4 billion in 2017. Rio Tinto and BHP accounted for 70% of the total activity returning proceeds of non-core disposals to shareholders.

In 2018 the share of value distributed to governments in the form of direct taxes and royalties   increased from 19% to 21%. Employees received 22% of the total value distribution from the Top 40. “Mining along with oil & gas, distributes a greater share of its value to governments than almost any other sector,” adds Andries Rossouw, PwC Assurance Partner. “A number of countries have also implemented carbon taxes and/or emissions trading schemes.” Of 25 countries in which the Top 40 operate, 13 countries have already implemented these taxes/schemes and nine countries are actively considering implementation.

M&A activity picks up

After several years of sluggish activity, M&A picked up significantly in 2018. The value of announced transactions rose 137% to $30 billion, driven by a flurry of activity in the gold sector, the on-going push by miners to optimise their portfolios, and momentum to acquire energy metals projects.

Rossouw comments further: “This renewed appetite for large transactions looks as though it will continue throughout 2019, with the deal value announced to 30 April 2019 already surpassing the value of all the announced deals in 2017.

Gold sector consolidating

The gold sector is experiencing a renewed round of consolidation, driven by a shrinking pipeline of projects, fewer new high-grade discoveries and a lack of funding for junior developments. Gold deals increased from 8% of total Top 40 deal value in 2017 to 25% in 2018, and this year are tracking at close to 95% of deals as at the end of April.

“Gold mining companies need to be rigorous and disciplined with prospective deals. With substantially all the value generated by mergers and acquisitions between 2005 and 2012 now lost, investors are still reeling from past transactions where purchasers overpaid for assets,” Kotzé comments.

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The proliferation of borrow pits to simplify the supply of sand and aggregates for road construction crews has once again come under the spotlight following the deaths of two workers at a borrow pit in Limpopo recently.

The two had apparently been digging sand for a road construction project when a collapse occurred and buried them under tons of sand and debris. Despite rescuers attempts they could not be rescued in time and succumbed to injuries on site. Two other workers were recovered by police rescuers and were hospitalised with serious injuries.

The latest incident has spurred a call from surface mining industry association, ASPASA, for the Government to put an urgent end to all forms of illegal mining including the mining of sand and aggregates from unlicensed borrow pits. The Regulator has also been called upon to urgently act on this type of illegal mining to avoid further loss of life.

ASPASA director, Nico Pienaar, says he hopes that the reappointment of Minerals and Energy Minister, Gwede Matashe, will hasten the process, as he is well aware of the problem . “ASPASA believes there will be a better focus on the issue of illegal mining, especially in the North of the country – which is especially prone to Illegal mining of sand.

“The regulator seems to focus on the established and legal operations with frequent visits and demands, while the industry is competing with illegal operations, who don’t pay the minimum wages, nor attend to Health and Safety or even worse the environment.

“This allows for unregulated business (which needs to be focused on by the departments) such as SARS (no VAT or taxes are paid), Water Affairs, Environmental Affairs, SAPS, Home Affairs (illegal migrants) and then the Department of Mineral Resources. If all these departments get together and work together then the problem could be resolved quickly, but it seems that the decay of the Government departments have gone much deeper than is believed.

“Some time ago Minister Mantashe closed some of the Department of Mineral Resources regional offices due to funny business taking place, ASPASA was requested to report any unprofessional activities to the Ministers’ offices which we have done. We now wait to see what the changes will be now that the Minister has a second stint in this portfolio,” concludes Nico.

Aspasa, Nico Pienaar, Tel: (011) 791 3327, Fax: 086 647 8034, Email: nico@aspasa.co.za, Web: www.aspasa.co.za

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By Garyn Rapson, Partner at Webber Wentzel

On Friday, 17 May 2019, the Minister of Environmental Affairs published the long-awaited 2nd draft of the ‘Proposed Regulations Pertaining to the Financial Provision for the Rehabilitation and Remediation of Environmental Damage caused by Reconnaissance, Prospecting, Exploration, Mining or Production Operations’ (2nd Draft FP Regulations) for comment.

Originally promised before the end of December 2018, the mining and oil & gas industries have now been afforded a final opportunity to submit representations or objections on the 2nd Draft FP Regulations. The deadline for submissions is 1 July 2019.

The 2nd Draft FP Regulations seek to entirely replace the NEMA Financial Provisioning Regulations, published on 20 November 2015, as amended (Financial Provisioning Regulations, 2015).

Highlights of the 2nd Draft FP Regulations

1. Focus on facilitating environmentally sustainable mining
For the first time, the 2nd Draft FP Regulations highlight that the purpose of setting aside financial provisioning is to ensure that operations can be brought to the approved sustainable end state at closure.
Companies have the scope to define a credible sustainable end state in the final rehabilitation, decommissioning and mine closure plan (Appendix 2) which is to be submitted. Appendix 2 says that the sustainable end state must reflect local conditions, regulatory complexities, stakeholder expectations, environmental opportunities and technical solutions for the infrastructure and facilities to support the sustainable end state.
The mind shift from classic mine closure (returning the land to its pre-mining state) to thinking focusing on a transitional economy is hugely encouraging. Opportunities for agri-processing, water reclamation plants and power-plants on mined out areas are abundant and will become a legislative imperative.

2. Financial vehicles?
The previous restrictions on the use of trust fund contributions have been removed and contributions to ‘closure rehabilitation companies’ continue to be recognised as a permissible financial vehicle.
Companies will have the leeway to structure their financial provisioning to best suit their needs.
The founding documents of a trust deed or closure rehabilitation company will need to be aligned to the minimum requirements set out in Appendix 6 and financial guarantees will need to be aligned with the template provided for in Appendix 7.

3. Section 11 and 102 applications?
The 2nd Draft FP Regulations continue to propose that applications for section 11 consent or section 102 amendments under the MPRDA will be formally regulated i.e. updated financial provisioning reviews and adjustments are likely to be required as a pre-requisite to obtaining these approvals.

4. Calculating financial provisioning
The proposed methodologies for calculating financial provisioning for new (Appendix 4) versus existing (Appendix 5) operations have been revised and simplified.
The calculation for existing operations includes all current disturbed areas, areas to be disturbed over the next 12 months and residual and latent liability associated with the premature closure.
Funds for the costs required to implement the activities for annual rehabilitation must be funded out of the operational budget of the holder.

5. Early access to financial provisioning
Withdrawal applications continue to be contemplated to access funds required to facilitate final rehabilitation and closure activities. Such applications will be strictly regulated i.e. can only be submitted within 10 year period before closure, one application per year, subject to Ministerial approval etc.

6. Timing?
Holders of mining / prospecting rights or permits who applied for the right or permit before 20 November 2015 will be expected to comply with the new regulations by no later than 3 months following the first FYE of the holder post 19 February 2020.
Depending of the holders FYE this will be a welcomed proposal.

7. Other?
CEO sign-off;
public access to financial provisioning documentation; and
third party, independent specialist requirement to prepare financial provisioning reports and audits, remain applicable under 2nd Draft FP Regulations.

Conclusion
Industry has one final chance to influence the content of the 2nd Draft FP Regulations before they are published as final to replace the Financial Provisioning Regulations, 2015.

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Tanzania’s mining minister said on Monday Acacia Mining had been fined 5.6 billion Tanzanian shillings ($2.4 million) for alleged pollution at its North Mara mine.

Acacia, majority-owned by Barrick Gold, is embroiled in a long-running tax dispute with Tanzania.

It was forced to cut output by a third after the government banned the export of mineral concentrates from its two other mines, Bulyanhulu and Buzwagi, in 2017.

Tanzania’s National Environment Management Council (NEMC) has issued an environmental protection order (EPO) relating to alleged pollution from North Mara’s tailings dam, mining minister Doto Biteko said.

“The North Mara gold mine has been given two weeks to pay the fine and three weeks to rectify the problem at its tailings storage facility,” Biteko told Reuters.

“If the mine fails to comply to the order, tougher measures will be taken against it.”

Last week Biteko and the country’s environment minister, January Makamba, visited the mine, where operations remain unaffected despite the crackdown by the environmental agency.

Acacia confirmed on Friday that the mine would be issued with an EPO relating to alleged historical breaches of environmental regulations in Tanzania.

“The mine’s technical team has been working constructively and collaboratively with the government of Tanzania to try to address … concerns regarding alleged breaches of various environmental regulations and alleged discharges of a hazardous substance from the mine,” Acacia said in a statement.

Acacia said in January it had been fined 300 million Tanzanian shillings over allegations of breaching environmental regulations at the mine.

The company said it has been asked to build a new tailings dam, a structure for storing uneconomical ore.

Acacia faces a $190 billion tax bill from Tanzanian authorities, which has severely limited the London-listed company’s operations in the East African nation.

-Reuters

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Following the announcement in October 2018 of WorleyParsons’ binding offer for Jacobs’ Energy, Chemicals and Resources (ECR) line of business, the combined new entity has come together under a new brand – Worley – as of 29 April 2019.

While financially an acquisition, operationally the transaction is a combination of two highly complementary organisations that creates a pre-eminent global provider of professional project and asset services in energy, chemicals and resources, offering global sector leadership across hydrocarbons, chemicals, and minerals and metals.

As one of the world’s largest project delivery organisations, Worley has been a leading global provider of professional services to the resources and energy sectors, and the complex process industries, covering the full project lifecycle in the hydrocarbons, power, minerals and metals, chemicals, and infrastructure sectors. This now includes key strengths from the heritage Jacobs ECR business of complex petrochemical and chemical projects, maintenance, modifications and operations (MMO) for hydrocarbons projects, including onshore and offshore production facilities and integrated project delivery, construction and technical services.

Andrew Wood says, “This merger is about more than capacity and capability. It’s about opportunity. The opportunity to become the partner of choice for our customers, the employer of choice for our people, and to deliver enhanced returns for our shareholders.”

Wood adds that the integration of the two organisations will create a global company of nearly 60 000 people across 50+ countries, fully committed to helping customers meet the world’s changing energy, chemicals and resources needs. The combined force will offer full life cycle services for customers across hydrocarbons, chemicals, and minerals and metals, with extended global delivery centre capabilities, supported by world-class people and systems.

Outgoing CEO of WorleyParsons RSA Denver Dreyer, who effective immediately is taking up the role of Senior Vice President Mining, Minerals & Metals (MM&M) for Europe, Middle East and Africa for Worley, comments that the merger will increase the organisation’s global footprint in the minerals, metals and mining sector. South Africa will continue to be a Global Centre of Excellence in mining and minerals processing, providing solutions for each step of the mining value chain. The Worley MM&M division for Africa will be headed up by Robert Hull, who had been responsible for the management of all projects delivered locally and globally from WorleyParsons RSA.

Hull’s counterpart, Ed Hanbidge, will head up the EC&S (Energy, Chemicals & Services) division for southern and eastern Africa. Hanbidge was previously MD of Jacobs Matasis, the South African arm of Jacobs ECR. In South Africa since 2010, Jacobs Matasis has been a significant contributor of expertise to the region and a major service provider of engineering, technical, professional and construction services to the refining, oil and gas, and chemicals industries. The company is known for its long-standing customer relationships, as well as project portfolio and alliance experience.

“The presence of these two complementary divisions in South Africa – one focusing on minerals and mining, the other one on energy, oil and gas – will create a stronger, united entity in many respects, through combined services, delivery programmes, resources and expertise,” says Hanbidge. “As a unified, integrated organisation, we will be able to serve our clients better, not just in one particular area, but in a number of areas. Our synergies of executing work will be stronger. Our clients won’t have to deal with multiple companies, but rather with one company that can now provide much more in terms of service, which in turn will also deliver cost benefits to our customers.

Hull concurs. “As one of the biggest one-stop-shops in Africa for professional services in energy, chemicals and resources, our customers can expect greater efficiencies, more services, and a greater diversity of skills.” He assures that customers will be working with the same people under an integrated, unified banner.

“We won’t be changing our DNA of working – our relationship-based way of working will continue,” affirms Hanbidge. “Business will continue as usual, but services will be delivered in a more cost-effective way, while bringing our customers the best of both worlds.”

Dreyer further comments that while this is a global merger, locally the new entity will be focusing on issues that are relevant to South Africa.

“This is a merger of two equals in terms of capabilities and competencies, strong track records of delivering projects, and ethical codes of conducts. As a combined organisation of substantial size and expertise, we are strongly positioned to help our customers in South Africa navigate some of the complex local challenges such as the new mining requirements, gas programme, power programme, and the demand for clean fuels.

“Together, the new entity – Worley – is even more equipped to solving our customers’ energy, chemical and resources needs,” concludes Dreyer.

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