In Search of Excellence – Introduction (Part 1)
Welcome to the In Search for Excellence quest. The Search is not necessarily for hot investment opportunities (although they may occur – or may not), but for excellence in business processes, in achievements, in management methods, in Board involvement etc.
I want to look at the business world, across all of the sectors that InvestorIntel covers and provide a deeper insight into the projects, the news, the developments and the methods. And that deeper insight will be focussing on looking for Excellence. This investigation may also identify excellence that is not. For example, I recently received an invitation to purchase a Rare Earths Annual that is: Published annually, the “XXXXXX Rare Earths Annual 2016” provides an accurate and in-depth long-term analytical view of the global rare earths market over the next 10 years to 2026.
Now, should anyone be able to produce an “accurate” prediction of the next 10 years of the international rare earths market that truly would be excellence. I guess time will tell, but I doubt it.
We have heard post-Trump and post-Brexit the term post-truth being created and frequently used. I think the above market prediction statement falls into another new term: pre-truth. That is true until proven untrue.
I need to finish the introduction to excellence that I started at the end of last year. This will take a couple of articles so bear with me whilst I am satisfied that the foundations for discussions going forward are in place.
Remember last article I put culture simplistically as: “The way things are done around here. It’s who we are, it’s what we believe, it’s what we stand for and at the end of the day, it’s the way we operate.” And I asked you to think of some situations of where you might see excellence as a result of culture and what it may look like. Well let’s look at those situations.
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Situation One: Junior Explorer, first drilling campaign. Contract driller. Property is located adjacent to sensitive environmental area. What would excellence look like? Why? Because this is what a Junior Explorer must establish as it’s culture from day one if it wants to have a culture of excellence going forward.
OK. This is a Junior Explorer who sees excellence as a key to its business going forward. As an observer, you know this. You know this? How? Because they told you so in your induction to the project. You were told of their values, their goals, their methods and their aspirations. You were told of the significance of the sensitive environmental area that is adjacent to the property. You were told of the importance of that area to the local Indigenous people and why they thought that way. And you were told how the property, the surroundings and the whole social fabric were being managed to reflect those issues.
So once on site, you saw the management of those issues in process.
As examples, in the December 2016 edition of The AusIMM Bulletin (that’s the Australian Institute of Mining and Metallurgy monthly members magazine), there are two articles on integration of the Indigenous people into the future development of mining projects.
The first article references Fortescue Metals Group Ltd. (Fortescue) who are a global leader in the iron ore industry. “Fortescue is committed to providing sustainable training, employment and business opportunities for Indigenous people and has proactively sought to establish and execute partnerships that support long term benefits for the communities in which it operates.”
Case Study 1 Result: A partnership between Fortescue and Western Australian owned and operated transport, freight and logistics company, Centurion, has created a significant opportunity for an Indigenous owned supplier in the Pilbara (North West Western Australia). Centurion awarded a subcontract to Red Dirt Transport Services for fuel delivery to Fortescue’s Pilbara based operational sites. Guided by a shared vision and commitment to building sustainable opportunities for Indigenous people, Centurion included local, Indigenous owned company Red Dirt Transport Services as part of its 36 month fuel delivery contract, paving the way for a mutually beneficial partnership.
Case Study 2 Result: In 2015, Fortescue signed a three year contract worth over $1 million with Print Junction, an Indigenous owned and operated graphic design and print business based in South Australia.
The second article references OZ Minerals who own and operate the copper-gold-silver mine at Prominent Hill (South Australia) and is developing one of Australia’s largest copper-gold resources at Carrapateena. “OZ Minerals is focussed on creating a pipeline of opportunities with a commitment to safety and capital discipline, which are underpinned by our strong values. Our commitment to creating and maintaining effective partnerships with all of our stakeholders is fundamental to OZ Minerals and the lands in which we operate. It is our desire to create transparent and open communication where all parties find mutual benefit and support. We believe that these relationships are the foundation for successful resource development as we invest in and acknowledge the history that people have with the land and communities within which we operate.”
Result: A Partnering Agreement between the Kokatha Aboriginal Corporation and OZ Minerals Limited, in relation to, and throughout the life of, the Carrapateena Project and any other future OZ Minerals projects in Kokatha country, including project rehabilitation. The purpose of the Partnering Agreement being so that Kokatha Aboriginal Corporation and OZ Minerals will work together to create sustainable benefits by leveraging, developing and building on our shared values and aspirations whilst protecting and respecting country and culture.
So on our fictional exploration site, you would see concrete examples of local Indigenous involvement, and you should see examples of the possible move to best environmental practice. For example, moving towards ISO 14000 certification, proactive involvement with the mining regulator, support of local wild life protection programs, new approaches to resource and energy conservation, best in class housekeeping, to name a just a few.
Looks like I’ve reached my word limit for this article and will need to continue with Situation Two, Three and Four next time. If you want to think about them, they are repeated below.
Situation Two: Feasibility Study Developer, new technology, new industry to the area, new risks, maybe competing with the Chinese. What would excellence look like? Why? Because this is what a Feasibility Study Developer must establish as it’s culture from day one if it wants to have a culture of excellence going forward.
Situation Three: Commissioning Manager, new technology, new industry, inexperienced operating crews, nervous regulator. You guessed it! What would excellence look like? Guessed it again! Why? Because this impacts on your developing culture.
Situation Four: Chairman. How do you progress from Junior Explorer through Feasibility, through commissioning and operations, trying to ensure that a culture of excellence is being developed and maintained?
Thought to Remember. “There is more than just achieving the Success Factors in business – Opportunities for excellence are all around us. We meet them every day. How we recognise them and how we exploit them, are probably the most important questions that influence our future.”
Mr Mackowski is a qualified engineer in mineral processing with over 30 years technical and operational experience in rare earths, uranium, industrial minerals, nickel, kaolin ... <Read more about Steve Mackowski>