Diversification Continues to Pay Off

Diversification Continues to Pay Off

Outsourced minerals and processing plant operations and maintenance specialist Minopex has diligently continued along its path of diversification during 2016, a strategy that the company expects will start paying off as soon as the global commodity market turns – with signs of an uptick already starting to show.

Since its establishment 20 years ago after identifying a gap in the industry trend for outsourcing operational aspects of minerals processing, Minopex has grown to become a leading specialist in the field of outsourced operation and maintenance of metals and minerals processing facilities.

The company currently operates and maintains 13 minerals processing plants in the phosphate, coal, platinum, gold, iron ore, chromite and diamond industries in South Africa, Lesotho, Botswana, Mozambique, Tanzania and Saudi Arabia.

Minopex has worked tirelessly over the past two decades to diversify itself into several divisions – each specialising in a field which complements the Minopex service offering. It is this continued diversification that enables the company to provide its clients with a holistic service offering, and is also what sets it head and shoulders above its competition.

In the light of the trend by mining companies to use outsourced operations and maintenance specialists as a means to de-risk a mining project, Minopex – through its diversification drive – has managed to add further value to its client’s operations by enhancing its overall service offering, not only within their minerals processing plant, but throughout their mining value chain.

Minopex goes underground

Minopex has extended its service offering into the underground contract mining, leveraging its operations and maintenance prowess in this field.

What started out as a fledgling division within global multidisciplinary engineering from DRA Global (a sister company to Minopex) specialising in the servicing of underground mining equipment was later taken over by Minopex, following a decision in early 2016 that the fit would be better suited to that of an operations and maintenance company rather than that of an engineering company.

The new mining division, dubbed MINOPEX MINING OPERATIONS, specialises not only in the maintenance of underground mining equipment, but also in actual underground mining operations.

At the helm of Minopex Mining Operations is mining executive Jacques Pretorius, a specialist in underground mining, who believes that the division is a good fit to the existing Minopex service offering and that of the DRA Global group.

“The part of the value chain that has been missing is offering the same service when it comes to mining operations as we have in the minerals processing space. This is the gap we’re filling with the new division”, notes Pretorius.

In line with the global mining industry’s move to that of mechanised mining over conventional mining, Minopex Mining Operations’ expertise lies in servicing the operations and maintenance needs of trackless and semi-trackless mining operations.

“As a result, we are looking at the development and mining of underground hard rock, tabular, bord and pillar mines using mechanised and semi mechanised mining machinery and equipment,” Pretorius highlights.

The reason this partnership model between DRA and Minopex works so well is that the synergies benefit the client greatly in terms of cost as a result of shared services – a cost that would be duplicated if sourced from different contractors, all while improving the overall value chain between plant and mine, he explains.

He also notes that this model acts as an enabler for smaller mining companies with smaller operations – greatly assisting smaller players off the ground.

Having taken this new division to market and tendered for work has enabled Minopex to benchmark itself against the larger players in this field. Feedback from the industry has also been positive, the company notes.

Business Model Evolution

Minopes Business Development Executive Renira Reddy notes that the outsourced contractor industry is becoming increasingly difficult to compete in.

In the past doing a good job was sufficient to secure long-term relationships with clients – this is no longer the case.

“Clients are becoming more aware and sensitive to cost factors as a result of commodity price fluctuations and labour unrest, which has further been compounded by the fact that clients themselves are under pressure to give their shareholders a return on investment,” she notes, adding that the clients themselves have ironically become Minopex’s biggest competitors.

Resultantly, Minopex had to reassess where it stands with its clients and has had to adopt am ‘open book’ model – where all costs are declared to the client and margin is agreed upon.

“This model settles the possibility of tensions as every knows where they stand with one another. It gives client peace of mind and also drives us to make sure that wherever we can be lean, we are. We also tie this in with an incentive model (based on key performance indicators) so that the benefits are shared between us and the client too,” Reddy explains.

Download the full story from Mining Elites in Africa 2017