1 September 2009 | International Resource Journal | - The ...

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1 September 2009 | International Resource Journal | - The ...

September 2009 | International Resource Journal |

1


Happy Birthday George Media!

If we had any idea George Media was going to be

THIS well-received, we would have baked a bigger

cake!

On September 4th, George Media Inc. turns

one year old. And over the past year, we’ve reached

some fabulous milestones that we’re so happy to

share with the world.

On November 4th, 2008, we launched our

cornerstone publication – The Canadian Business

Journal (CBJ), and the CBJ has since become a

household name. Since our launch issue of the

CBJ, we’ve interviewed a long list of VIPs including:

Arlene Dickinson (Dragon’s Den), Brad Wall (Premier

of Saskatchewan), and Doug Beeforth (President of

Sportsnet). We’re so fortunate that these individuals

have given us our five minutes of fame – and we can’t

wait to interview even more influential Canadians!

A big office move in March of 2009 followed

hoped-for, but unexpected growth of George Media.

In the early spring we started to accommodate a

larger staff and began planning our first issue of

our second publication: The International Resource

Journal (IRJ). The time had come for us to launch an

international magazine with a global scope, so we

could cover the issues in mining and oil and gas that

our readers were so eager for us to investigate. Our

inaugural issue of the IRJ was launched on May 6th,

2009, and coincided with the opening of our new

London, UK office. Since May, we’ve worked with

the big guys in the industry to tell their company

stories about sustainability, going green, and health

and safety under and above-ground. We’ve also had

the opportunity, through the IRJ, to attend global

mining and oil and gas conferences focusing on

issues affecting regions around the world—from

Latin America to Europe to China.

What a wild ride it’s been. In the last two

months, we’ve made some pioneering steps towards

becoming the world-class digital media company

we strive to be. In July, we became the first online

publication to be BPA audited. This process was

another step we wanted to take in order to be

transparent and accountable to our advertisers.

As we look toward the future, we’re

excited to announce that we expect to launch

at least one more title this year—The American

Business Journal—which will go live at the end

of this month.

Feel free to send your congratulations

(insert blush here) and thoughts, as always, to

sarak@georgemedia.ca.

A toast to the future!

Sara Kopamees

IRJ is published 12 times a year by George Media Inc. Copyright 2008. All rights reserved. No part of this magazine may be reproduced without written permission from the publisher.

The opinions expressed by writers do not necessarily reflect the views of the publisher. Information presented is compiled from sources believed to be accurate, however, the publisher

assumes no responsibility for errors or omissions.

2 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 3


Editor in Chief

Creative Art Director

Associate Editor

Sr. Graphic Designer

Sr. Graphic Designer

Head of Corp. Sales

Head of Business Dev.

Head of Research

(The Americas)

Research Directors

(The Americas)

V.P. Research - EMEA

Research Directors

(EMEA)

Sara Kopamees

sarak@georgemedia.ca

Kulvir Singh

kulvirs@georgemedia.ca

Nuala Gallagher

nualag@irjonline.com

Shabnam Nematy

shabnamn@georgemedia.ca

Rachit Raval

rachitr@georgemedia.ca

Amanda Edwards

amandae@georgemedia.ca

Jeff Hocken

jeffh@georgemedia.ca

Sanjeev Amirthanathan

sanjeeva@georgemedia.ca

Damien Evans

damiene@irjonline.com

Kiran Hundal

kiranh@irjonline.com

Orlando Falsetti

orlandof@georgemedia.ca

Simon Curran

simonc@irjonline.com

Ashley J North

ashleyn@irjonline.com

David Hunter

davidh@irjonline.com

Girts Licis

girtsl@irjonline.com

Julia Shapchanskaya

julias@irjonline.com

Nathaniel McKenzie

nathanielm@irjonline.com

Natalie Edney

nataliee@irjonline.com

Dir. of Finance & Operations

Linda Neal

lindan@georgemedia.ca

Chief Information Officer Naveed Yusuf

naveedy@georgemedia.ca

Administrators

Publisher

President

Sandra James

sandraj@georgemedia.ca

Gemma Parkins

gemmap@irjonline.com

Aaron Weafer

aaronw@georgemedia.ca

Michael Alexander Jones

06

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46

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86

76

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94

100

108

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118

126

134

142

General Kinematics

More than just vibratory

Hemi controls

The hydro power pros

Louisiana oil and gas

association

highland helicopters

Flying through the toughest times

Deloitte

See the big picture

Fairwinds International

To be the standard of excellence

silver wheaton- The world`s

largest silver stream is Growing

KMC Mining

Simply doing things right

Marcotte Mining Machinery

Our people care, our equipment

is the proof

Shield mining

Powerful progression

4 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 5

michaelaj@georgemedia.ca

News in Review

Latam mining congress 2009

IRJ Country Profile

Venezuela

Kenya Petroleum Refineries

Firm foundations, future growth

World Nuclear Association

Bear creek services llc

Taking You Every Step of the Way

True energy trust

In pursuit of Future Growth

Capital drilling - Developed

Market Standards for emerging

market operations

imca - The Right Direction

ČEZ - IRJ catches up with the Czech

Energy Group

Injgeo - The forefront of Russian

Economic Aims

118

32 52


Renewable Futures Pledges $200 m

Renewable Futures, the Fotowatio

solar project financing and

operating company, has announced

the completion of its Solar Funds V

which promises to finance over $200

million dollars worth of new solar

energy projects throughout the United

States of America.

The Solar V Fund will focus on

acquisition and progression of the

commercial sector, public sector and

utility solar projects within the one to

10 megawatt range. It is Renewable

Venture’s fifth fund project and a first for Fotowatio’s

U.S subsidiary arm.

Fotowatio is one of the largest independent

solar producers in the world and works on finances

and/or owns a total of 130 megawatts in photovoltaic

projects across Europe and the U.S.A. They are

currently developing over 1,000 megawatts of solar

and photo power in Spain, Italy and the U.S.A.

The first of these projects is the two megawatt

solar photovoltaic project set to provide energy to

Colorado State University and award renewable

to Solar Start-Ups

energy credits to state utility Xcel Energy. This project

is based in Fort Collins, Colorado.

“With this new infusion of capital, we stand

ready to work with businesses, utilities and others to

immediately finance, develop, or acquire megawatts

of large-scale solar projects in the U.S” Matt Cheney ,

CEO for Renewable Ventures told the press.

“Solar Fund V has been designed to use capital

and incentives available under the stimulus program

in a way that can accelerate the development of

more solar projects and quickly create jobs in the U.S.

renewable energy sector.” q

Finnish Refiner Cuts

450 Jobs for Costs

Neste Oil Oyi, the Espoo-based Finnish oil, diesel

and gasoline refiner, announced that they have

begun talks with employees as they consider cutting 450

jobs to combat their flailing profits.

The company hopes to save €30 million Euros by

cutting over 10 per cent of their employees in Finland and

described this move as part of their “efforts to respond

to the company’s recent drop in profit performance”

according to Neste’s press release.

The company plans to save a total of €60 million

Euros and has taken various steps to do so since last

autumn including postponing projects, and reducing

fixed costs.

“To safeguard the company’s future

competitiveness, Neste Oil believes it needs to adapt its

cost structure to the changes that have taken place in

the market situation and Neste Oil’s organization,” the

press release continues.

Late in July Nesta Oil announced that product

demand had declined by a 58 per cent second-quarter

net profit drop as a result of low use; from €212 million

Euros in 2008 down to €88 million Euros. Simultaneously,

sales fell 41 per cent from €4.42 billion Euros in 2008 to

€2.59 billion Euros. q

C-Quest Invests in SunOne;

Prepares for Cap-and-

Trade Arrival

C-Quest Capital, an international carbon

finance business of Washington D.C, has

invested an undisclosed amount in SunOne

Solutions; a Nebraska-based carbon offset

company.

The investment seeks to further SunOne’s

operations including agricultural and forestry

carbon dioxide removal projects both inside

the United States of America and in developing

countries elsewhere.

C-Quest Capital hopes to gain access to

emerging market sectors within the U.S.A as

they near the introduction of a federal cap-andtrade

scheme. The scheme limits the amount of

greenhouses gases an operation can emit and

implements a series of permits to moderate and

regulate this.

“This growth capital will enable SunOne

to expand to a national presence, building

on its existing operations in the Midwest and

Southeast United States” Ken Newcombe, Chief

Executive of C-Quest Capital, says in a company

statement. q

6 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 7


New FTC Law “Will Police the Oil Markets”

T

he

Federal Trade Commission (F.T.C) announced

a new rule effective of November 4 aimed

at those guilty of fraudulent or deceptive actions

within the oil wholesale market. Under this new law

guilty parties may be fined as much as one million

per day for their crimes.

The new rule focuses on actions that might

manipulate the wholesale petroleum markets and

targets false public announcements on pricing or

company decisions and incorrect data and statistics

including ‘wash sales’ which mask market liquidity

and product price.

“We will police the oil markets -- and if we find

companies that are manipulating the markets, we

will go after them” Jon Leibowitz, Chairman of the

F.T.C said in their press statement. Pressure upon the

F.T.C to issue this rule increased after oil hit $147.27

in July, but there has been a call for the law to pass

since last year. One such interested proponent is

Senator Maria Cantwell, a Washington Democrat.

“Oil supplies are near 20-year highs and

demand for oil is at a 10-year low -- so why have

gasoline prices gone up a dollar a gallon since

the beginning of the year?” she says in a press

statement.

“With this new rulemaking, the FTC has

established a clear, bright line to distinguish healthy

market practices from illegal manipulation.”

One of the four F.T.C commission members

expressed opposition to this new law.

There is a serious danger that it will impede

routine contracting that is benign or pro-competitive

and thereby make Americans worse off by damaging

the flow of commerce in petroleum products”

William Kovacic, F.T.C Commissioner said in a press

statement. q

Speculation over ENAE Bidders Swirls

The Financial Times Deutschland spoke to secret

sources in the finance industry and announced

that the German utility RWE has submitted a 67

per cent stake big to their Polish counterpart ENAE;

Poland’s only listed utility.

RWE declined comment but the Polish

government confirmed that two bids from

unidentifiable businesses had been entered.

As speculation over the unnamed bidders

began, many pointed to Vattenfall of Sweden who

already holds a 19 per cent stake, valued at $2.3

billion dollars, in ENAE. Soon after this news surfaced

both Vattenfall and Czech utility CEZ confirmed that

they were not in the running to bid on the stake and

had dropped out. Another suspected bidder was

GDF Suez of France. q

EDF’s £4 Billion U.K Network Up for Auction

The media is poised for a huge bidding war over

French energy company EDF’s four billion pound

UK operations as Scottish and Southern Energy are said

to be interested.

Numerous bodies have already been rumoured

to be preparing their bids for the EDF division which

provides energy to approximately eight million British

homes. The auction, scheduled to take off next month,

will be handled by Barclays and Deutsche Bank. The

EDF incentive in this auction is said to be reduction of

their £21.2 billion pound debt pile incurred after the

Paris-based utility spent £12.5 billion pounds on buying

British Energy in 2008. This auction is a big business

move for Britain; the biggest utility takeover since the

BAA acquisition of Spain’s Ferrovial three years ago.

Speculation has arisen that SSE will partner with

Borealis Infrastructure and The Ontario Teacher’s

Pension Plan, both Canada-based companies, in

making their bid for the network. SSE spokespersons

approached by the media during mid-August refused

to comment on these rumours. The auction and

speculations continues. q

8 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 9


Rio Tinto Detainees are ‘Downgraded’

but Charges are Still Pending

Mexico and U.S Swoops on Suspected

Plan for Pemex Oil Heist

Four staff of mining major player Rio Tinto have

been formally arrested by China under suspicion

of gathering commercial secret information. However,

some other state secrecy accusations were not chased

which has created claims of political appeasement

including media remarks of Chinese efforts to resume

political harmony with Australia.

The detained, Australian Stern Hu and Chinese

nationals Liu Caikui, Ge Minqiang and Wang Yong,

have been accused of “using improper means to

obtain commercial secrets about our country’s steel

businesses,” according to Shanghai prosecutors

speaking to the official Xinhua news agency.

The four detainees, members of Rio Tinto’s

iron-ore marketing team in Shanghai, have been in

custody since July 5th.

Under these charges the accused may face

custodial sentences of three years under commercial

secrets charges and seven years if the charges are

upped to “commercial bribery, which involves the

offence of taking bribes from individuals not employed

by state organizations” according to article 163 of

Chinese Common Law; a measure made for only the

most serious of case.

Chinese officials now appear to have backed

down from the potential commercial bribery charge

and instead appear to be leaning towards infringement

of Article 219 of China’s criminal code; forbidden

acquisition of “a rightful owner’s commercial secrets

by theft, luring with promises of gain, threats or other

improper means.”

Chinese media outlets continue to suggest

that the detained men were attempting to gather

information on the lowest negotiating price for

China’s entire steel industry. Rio Tinto continues to

deny these allegations. q

A

U.S official has announced a joint Mexican and

U.S.A. government probe into a suspected

scheme to steal millions of dollars worth of oil

products from the state-owned Mexican oil

company, Pemex, with a view to sell the product on

to U.S-based refiners.

Donald Schroeder, President of Houston’s

Trammo Petroleum has already pleaded guilty in

May this year, to a two million pound planned heist

which targeted Pemex and planned to sell on the

product in question to U.S refiners.

This announcement of the joint probe followed

U.S President Barack Obama’s meetings with

Mexico’s President Felipe Calderon and Canada’s

Prime Minister Stephen Harper in Guadalajara,

Mexico. Calderon has accused powerful drug gangs

of being involved and Pemex has said that these

gangs abuse aging oil pipeline facilities by tapping

in and stealing oil. In 2008 the company located 338

illegal pipeline connections, however they admit

that they are not sure how much product is stolen

each year.q

10 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 11


18 Illegal Diamond Miners Dead in Congo

Miners dig for gold in the Democratic Republic of Congo. (Reuters: David Lewis, file photo)

18 illegal miners died in an accident at a Mbuji-

Mayi diamond mine in the Central Democratic

Republic of Congo.

“Eighteen have died and there is only one

survivor,” Jean-Marie Kabuya, a union official, told

news agency the Alternative Foreign Press (A.F.P).

At the time of press rescue operations had

recovered seven of the 18 bodies. Initial investigations

suggest that the individuals within the mine had

knocked over a pit prop from deep inside the mine,

according to Celestin Kubela, head of the Kasai

province mining authority.

The diamond mine in question has been out

of operation since November 2008; in part due to

aging and inappropriate equipment and facilities and

declining diamond prices.

The dwindling diamond prices have had

a disastrous impact on this company; formerly

producing an average of six million carats a year but

sloping to less than 500,000 carats for 2008.

The Kasai region has long-been dubbed the

diamond capital of the Congo, however Kubela

explained to the A.F.P that illegal miners have been

forced to search deeper underground as the diamonds

have become less available. “Sometimes they search

for months without success,” he told the A.F.P. q

Korea Coal Corp’s Coal-

Mining Robots of 2013

Picture this: Its 2013. Leagues of robotic coal-miners

swarm the mining operations of Korea. Fiction? Perhaps

not.

The state-run Korea Coal Corp. Has signed a

Memorandum of Understanding with The Korea Institute of

Machinery & Materials and two other bodies for the research

and development of coal-mining robots.

The project has a development target of 2012 and a

budget of $2.42 million U.S dollars. Researchers from both

Korea Advanced Institute of Science and Technology and

Hanbat National University will collaborate on this project.

These robots are being designed and considered in order

to further productivity by working 24/7 and to be able to go

deeper, thereby reducing the risk for human fatality which

draw limitations on these factors today.

Initial estimations suggest that successful development

of these mining-robots followed by six months of trials and

testing could see them being put to operational use by 2013.

Kim Jae-ho, the company’s Head of Research, has said

that productivity could be improved by 30 per cent which

would create an extra output of 40 billion Won per annum.

The coal-mining robots are expected to change the

concept of mines and working conditions as well as improving

productivity,” President Jo Gwan-il, President of Korea Coal

Corp said in an official statement. q

Twenty Dead in Mining

Explosion, Slovakia

An explosion in Hornonitrianske Banke

Prievidza’s Handlova lignite mine,

central Slovakia, has killed at least 20 miners

in what looks to be the country’s worst ever

mining disaster.

The Slovakian Government Economy

Minister, Lubomir Jahnatek, announced the

news of these deaths after 24 hours of rescue

operations.

“From now on, it is clear that no one

could survive. It’s an immense tragedy” he

says. That same day the government was

scheduled to declare a period of national

mourning. There have been some survivors.

At least nine miners escaped the explosion

and were released from hospital soon after

being treated for minor injuries.

Hornonitrianske Banke Prievidza

is Slovakia’s top lignite producer. Their

workforce totals 4,100 and the Handlova

mine where this explosion occurred produces

approximately 2.2 million tonnes of lignite per

annum. Recent discovery of further deposits

to the tune of 7.2 million tonnes had sparked

plans to expand these operations. q

12 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 13


By: Sara Kopamees

Now that things are looking up – how healthy is the Latin American mining sector?

Although metal prices tanked this

past year, mid-August saw prices

go up, and the growing sentiment that

worldwide financial storms are finally

letting up was reflected in several

markets.

Still, the global crisis has taken

its toll, especially on countries whose

livelihoods are supported by mining, oil

and gas development. Financial markets

in Latin America weakened as fallen

commodity prices hurt prospects for

exporting. Investors have certainly seen

reasons to sell, as Latin America’s largest

bank (based on assets) reported a 14 per

cent fall in its second quarter.

Overall, things have not been

rosy for South America—for companies

operating in the region and those native

to major developing countries such

as Chile, Venezuela and Brazil. Many

companies have been suffering from a

severe shortage of working capital and

have pursued options for long-term

financing to fund growth.

However, the global financial crisis

has brought into perspective areas for

improvement in the mining industry—

especially sustainability. Having told the

stories of companies operating in South

America ourselves, The International

Resource Journal was pleased to get

an invite to the Latin American Mining

Congress in Coral Gables, Florida, to hear

what big thinkers in the industry have to

say about Latin America’s future in

14 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 15


About Terrapin

We’re brainstorming your next big idea

Our purpose is to give our customers the relationships and big

ideas to do different and better business. We’ve been doing it

for more than 20 years.

We want you to come away from one of our events with

eight big ideas and eight new key contacts. That’s how we

contribute to the business communities we serve.

Around the world.

Living the brand

Our experience, skill, creative vision and commercial drive

have built a portfolio of successful international brands.

The kind of brands that ensure your world class brand gets

maximum value on a global stage.

Our brain power stimulates yours

And we believe in the inventive power of the right brain.

We’re a creative organisation and use design, story, play and

meaning to make our events stimulating experiences that

help shape your big ideas.

Snapshot: Chile

Chile’s copper exports amounted to $2.542 billion this July,

according to the central bank. This was the highest level in

almost a year as copper prices recover. Totalled exports were

valued at $3.247 billion in July of last year.

Chile is the top global copper producer, mining approximately

a third of global supply. A steep fall in copper prices has

curtailed South America’s revenue intake—according to

economists.

mining. The Congress took place from June 29 to July

1, and brought heads together to look at the industry

from the outside.

Taking a closer look at sustainability

Attendees at the Congress addressed a wide range

of cultural, socio-economic and environmental

issues facing mining industry in Latin America.

First on the list was Corporate Social Responsibility

(CSR). As developing countries emerge as economic

competitors for the rest of the world, basic social

responsibilities need to be considered by the host

countries and companies operating within.

Fortunately, delegates at the Congress were able

to hear from Eva T. Thorne, who helped attendees

learn how to determine risk tolerance for CSR issues

in Latin America. Thorne is a director of Pact, a

Washington, DC-based international development

NGO that works to develop innovative partnerships

between corporations and NGOs, with the intent

to advance sustainable development. Thorne’s CSR

research is extensive and informed by experience

working in developing countries.

Thorne described determining risk tolerance

as a “continuous and ongoing process—not a onetime

thing”. In an ever-changing industry, companies

and public organizations that partner with them

need to collaborate to make CSR initiatives work.

“To successfully operate, mining companies who

are operating in Latin America need to master the

art of political risk, management, and litigation by

incorporating assessments, analysis and plans as soon

as they identify an area for investment” she explained.

Essentially, risk assessment in Latin America is a

thorough, from the bottom-to-the-top, process.

The list of risks in mining in Latin America is

extensive, but the reward for operating in the region

can outweigh those risks—if companies are prepared

to sufficiently research and keep their eyes open. Not

only are companies and governments alike dealing

with economic risks, the political landscape can be

unstable, and legislation is not always black and

white. Latin America has experienced revolving and

continuously changing tax and royalty regimes. In

addition, security is a risk factor when deciding to do

business in Latin America due to ethnic conflict, civil

unrest, labour unrest and sometimes terrorism.

Starting small

Julian Rooney, Vice President, Public Policies and

Government Relations South America for Xstrata

Copper was also in attendance, at the Congress and

offered some inside insight into how companies

can promote sustainability while operating in Latin

America. Of course, Xstrata often sets the benchmark

for sustainability, but Rooney gave specific regional

examples of sustainable projects in Argentina, Chile

and Peru.

In Argentina, Xstrata completed a walnut

re-engineering project in Puertade San José,

16 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 17


As part of the project, Xstrata planted high density

Chandler walnut trees in old plots that originally housed

regular walnut trees. This will enable farmers to enter

more competitive markets and increase their incomes. A

seed processing plant was also built where 40 local women

work peeling, washing and packing the final product. The

results: In 2010 the plots planted originally in 2006 will start

producing walnuts, and the return of investment for the

local community will start showing. Rooney explained the

motivation for smaller, but highly important, projects like

this one: “in the mining industry, not everybody is going

to be able to be employed by that industry or supporting

industries that mining generates”. Therefore, companies

must identify “what are the activities in the area that do

have some kind of economic advantage and do have some

sustainability in the long term”.

Looking at the long-term

After recognizing those activities, Xstrata—like other major

players—can begin co-designing with local people activities

that are sustainable. “We need to not only think about things

that are going to be in operation during the mining project

but also how they will be sustainable in the long term—so

that there are mutual benefits for the stakeholders working

on a partnership including authorities, communities, and

NGOs operating in the area”. Obviously, the protection of

natural resources is an important topic, and according to

Rooney “private and public alliances will help to ensure

long term regional development that outlives the lifespan

of any mining operation”.

Mr. Hernán Martínez, Minister of Mining for Colombia

was present at the Congress to discuss the coal industry

in Colombia, quickening changes to the mining code,

reorganizing the institutional structure of mining, and

speeding up the process of assigning areas of availability

across Colombia.

Although we have not yet had the chance to interview

Mr. Martínez, we learned quite a bit from the Ministry

website. The Ministry has committed to defining conducive

lines of policy to modernize the state management of the

mining sector in Colombia, with the following objectives

in mind (on a general scale): improve the efficiency in

the management of the sector, increase the knowledge

base in the sector, promotion of mining, provide better

information about the sector, improve competitiveness

with technological modernization, and promote sustainable

development in conjunction with other ministries. For more

information on new policies, visit the Ministry’s website at

http://www.minminas.gov.co/minminas.

Though mining executives are familiar with the cyclical

nature of the commodities business, 2008 into this year has

presented new challenges. Industry consolidation in many

markets, including developing nations, has become easier

in some circumstances than weathering the storm. The

LatAm Congress really exemplified a strategic opportunity

to bring together mining experts and execs to present their

outlooks on the sector, and come up with ideas to explore

new areas for growth. q

18 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 19


Venezuela is situated along the majority of the Northern coast of South

America by the Caribbean Sea. Colombia borders the west, Brazil borders the

south and Guyana borders the east of this 352,144 square mile country, home to

approximately 26,814,843 people. Venezuela is separated into four areas by the

mountain systems which run throughout the country; the Maracaibo lowlands; A

mountainous region to the north and northwest; the Orinoco basin in the south

and southeast and the Guiana Highlands making up almost half of the national

territory.

Venezuela was once the world’s largest producer of direct-reduced iron and

has been amongst the leading countries providing bauxite and alumina too. The iron

and steel industries made up the main bulk of the nation’s mining until aluminium

grew rapidly in the 1980’s. Other principle commodities produced by the country

have included diamonds, gold and ferroalloys.

The state has long-played a large part in the history of mining in Venezuela

and does so still today. The 1970’s government of Venezuela drove focus towards

industrial development and both obtained or created many mining licenses as a

result. By the 1980’s huge debts cropped up on these projects and the government

decided to revaluate their prior decision to restrict foreign investment in the nation’s

mining, instead opting to relax mining laws with a view to coax foreign operators in

to expand the private sector participation from international players.

20 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 21


Chavez Comes to Power

President Hugo Chavez took office in 1999 and

has been a central force in the recent changes

and development of mining law and landscape in

the country. Upon his arrival to power he pledged

commitment to political and economic reform, giving

the poor a larger share in the wealth generated by

the Venezuelan oil industry.

Chavez proved to be a controversial leader with

strikes, demonstrations and rallies against his everauthoritarian

government rule occurring as early

as 2001. In 2002 workers reduced oil production in

response to Chavez’ policies. The poor remained

hopefully in support of their president, while labour

forces, the media and businesses amongst others,

became increasingly less enthused by his regime.

A mass strike in December 2002- January 2003

brought the Venezuelan economy to a grinding halt,

including the oil industry. Calls for Chavez to resign

or instate early elections were made until the strike

ended in February that same year. Despite heavy

government petition a referendum was set for August

15, but Chavez won through this with an astonishing

58 per cent of the vote. This was not the last of his

incredible victories at the ballot box, and in December

2006 he was re-elected with another astounding 63

per cent vote in support.

Early in 2007 Chavez announced the

nationalization of major Venezuelan energy companies;

a significant move in his efforts to consolidate his

power over the state and move to a more socialist rule.

Then in May 2007 the President closed down RCTV;

the major government-critical television network in

the country. Soon after in August that same year, the

National Assembly voted for presidential term limits

to be abolished, significantly strengthening Chavez’

potential for indefinite power over the nation. In the

years that followed, Chavez continued to fight against

the failed new referendum of December 2007, and

even changed the Venezuelan time zone to half an

hour ahead of Eastern Standard Time (EST) in a move

which his government claimed was to improve the

health of the Venezuelan people by allowing them

greater exposure to sunlight.

Venezuela Resources Today

Fast-forward to the current state-resources industry

relationship in Venezuela and the issue is still high on

our international news agenda.

On March 22 2009 Chavez unveiled new

measures to combat the falling oil revenues which

make up roughly 50 per cent of the Venezuelan

national budget. These included a proposed 6.7

per cent budget cut and increased sales taxes. This

announcement came shortly after the Venezuelan

government had directed the army to assume control

over the country’s major airport and sea ports.

On August 17 it was announced that Petroleos

de Venezuela, the Venezuelan state-owned petroleum

company, and a group of Russian oil companies

including Gazprom, TNK-BP and Lukoil plan to enter

into a joint venture agreement worth $35.6 billion

U.S dollars in the Orinoco region of Venezuela. This

40 year-long venture is aimed at producing crude

in the June 6 area of the region and is expected to

be signed by both Chavez and Russian President

Dmitry Medvedev during Chavez’ visit to Russia in

September.

On August 19 this year the Venezuelan Ministry

of Basic Industries and Mining assumed operational

control over the assets of Matesi Materiales

Siderúrgicos S.A. (“Matesi”), run by global-wide steel

tubes supplier Tenaris S.A. This is an example of one

such recent takeover by the state.

On August 27, unofficial government sources

told the world media that Chavez plans to appoint

current Labor Minister Maria Cristina Iglesias

as Minister of Basic Industries and

Mines (MIBAM) in a strategic move to

tackle labor difficulties and unrest in

the Guyana region of the country.

The tentative and

controversial nature of

Venezuelan state-involvement,

particularly in the oil and

mining industries within the country, continues. The

resources industries of Venezuela have a long and

complex history but the resource-rich region also

continues to thrive in many aspects. The political

involvement and development is quick-paced and far

from set in stone, but the country does continually

seek to establish the best situation for both its poor,

its general public and the operators in the resources

industries too. q

22 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 23


Kenyan Petroleum Refineries Limited (KPRL) of

Mombasa, Kenya, was originally formed by Shell

and British Petroleum back in 1959. Their intention was

to create a company to serve the East African region

in its supply of oil products. Incorporated in 1960

under the name East African Oil Refineries Limited,

the company changed its name to Kenyan Petroleum

Refineries in 1983; 12 years after the Government of

Kenya acquired a 50 per cent share which they retain

today.

On July 31 2009 the scoop hit our headlines.

Kenya Petroleum Refineries Limited (KPRL) swept

across our newswires announcing that ‘ESSAR Energy

of India acquired a 50% stake of KPRL bringing to a close

a process that begun in 2007’ in their press release.

This was big news for KPRL and we caught up with

John Mruttu, General Manager, to hear about what this

means to the future of the company.

“We really have four strategic goals at KPRL at the

moment. The first is to increase shareholder returns

15 per cent by 2012” Mruttu says.

The second goal is to increase the customer and

stakeholder satisfaction to 90 per cent. The third goal

is to attract and retain a competent, motivated and

productive workforce thereby reducing turnover to

less than four per cent by 2012. And our fourth and

final strategic goal is to continue to be recognised as

a responsible corporate citizen and to contribute to

sustainable development.”

These goals are clearly portrayed by the projects,

partnerships and efforts undertaken by KPRL today.

KPRL: The Responsible Corporate Citizen

“In terms of flagship projects which fit in with our

strategic goals we have the construction of residue

conversion facilities to improve the processing

24 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 25


efficiency of the refinery, to construct facilities for the

storage of LPG importation and handling, cleaning up

our products to meet the new specifications that

are coming and finally own-power generation too”

Mruttu summarizes.

In meeting their fourth goal, KPRL are working to

improve their own facilities and reduce their impact

and footprint on the locality.

“We are currently commissioning our wastewater

treatment facility which gives us two benefits. The

first is that it helps us to clean up our effluent and

once the water has been cleaned up it can of course

be recycled” Mruttu says.

“Water is in chronic short supply in Kenya and

being able to recycle in this way means that we take up

less water from the city mains and the water we don’t

take up is going to be available to the communities of

Mombasa. It’s not a very big project but for us it is

certainly very interesting.”

Social responsibility appears to be another

key factor for the company, as Mruttu explains the

different ways in which the company has approached

educating, supporting and caring for the local

community amidst the threat of HIV and AIDS.

“We’ve worked quite a lot with youth groups,

supported them with materials, attend their

gatherings and facilitate resource persons on HIV/

AIDS awareness programs. This has been a main social

26 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 27


focus with us for a number of years now” he says.

“We also work actively with colleges and schools.

We donate computers and desks, we support the boy

scouts and girl guides, and equally these involvements

feed into the work that we do with HIV and AIDs

because part of this work involves taking these

children in the schools through the same programs

to raise their awareness on the threat of disease.”

KPRL: A Motivated and Productive Workforce

It is not only amongst the local communities that

KPRL strives to educate, inform and nurture, but in

the workforce too. Mruttu enthuses about the quality

and dedication of the KPRL team and explains that

the company places great emphasis on cultivating

this in their employees, beginning with college-level

scholars searching for their taste of time in industry.

“A lot of people attending technical colleges

in Kenya need a period of about three months over

which they work in the industry so at KPRL we provide

that for polytechnics and a number of universities. We

take on the students and help them to gain a deeper

appreciation of what really happens in industry” he

says. Like many of his peers, Mruttu himself possesses

broad experience and understanding of the different

roles within the company.

“I’ve really done all sorts of jobs in the field

ranging from being a mechanical engineer to project

engineer, and engineering manager, manufacturing

manager and my current role as the general

manager of KPRL” he explains. This experience and

appreciation for others at different career levels and

directions has enabled KPRL to meet their strategic

goal for their workforce head-on.

KPRL: Increasing Shareholder Returns and

ESSAR

The recent news of ESSAR’s 50 per cent share

acquisition bodes well for KPRL.

“Up until the 31 July the shareholder’s were

the Government of Kenya with 50 per cent and BP,

Chevron and Shell were holding the other 50 per

cent” Mruttu explains.

“BP, Chevron and Shell sold their equity to ESSAR

Oil Limited of India on July 31 so now the Government

of Kenya holds 50 per cent and ESSAR Oil holds the

other 50 per cent. We have eight directors on that

board; 50 per cent from the government and 50 per

cent from ESSAR – four directors on the board for

each shareholder.”

Mruttu is optimistic about this latest

development, but highlights that the company

has enjoyed a history of successful shareholder

relationships throughout its 50 year lifespan too.

“Certainly for the company getting a new

shareholder who’s strategic intentions are aligned

to what the company also intends to do really gives

us an opportunity to grow, move and organize the

company as we seek to meet the national demand for

petroleum products and that we will do by investing

28 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 29


in new processing units to improve efficiency and also

in cleaning up our product” he says.

The relationship with our previous shareholders

– Shell, BP and Chevron – goes back 50 years. This

history and interaction has certainly helped to grow

our company culture and that’s something which

we are very strong in now. We have very strong

core values in integrity, honesty, respect for people,

high technical and industry standards. Certainly the

interactions we have had with these three companies

have allowed us to grow and shape our core values.”

KPRL: Tomorrow

Despite this latest high profile news, Mruttu has a

realistic and honest approach to what the coming

months may hold for the industry in Kenya.

“One of the biggest challenges from where we

sit has been the changes in product specifications.

Sometimes in Kenya there is a lack of lead time

given and as a result we have to work very hard to

meet those specifications. Certainly from Mombasa

another challenge we see is the mushrooming of very

large world-class refineries in Western India which are

really intended for the export market. The challenge

of facing up to and rivalling that is quite enormous”

he says.

“I can see the global economic crisis affecting

us in the future because having crossed the issue of

the changes in the shareholding we’re now at a stage

where we want to move forward into implementing

our projects so in this position where we are going

to approach the money market we certainly expect

that there will be a number of hurdles to be cleared

in order for us to get to the project financing that we

need. Right now because we haven’t yet reached the

market, we haven’t really experienced the challenges

brought about by the economic crisis but we think

that as soon as we hit the road running and approach

the market, they will become more apparent but I am

confident that we will find a way round them.”

While keeping thoughtful and open to what the

future may bring, Mruttu explains that KPRL’s short

term operational goals remain undeterred.

“We certainly aim to stabilize the electricity

supply to the refinery. At the moment our power plants

are interrupted quite frequently because we rely on

electricity from the grid, so one of our objectives is

to solve that problem. The other goal in the short

term is to constantly improve the performance of our

reformer units.”

With a clear focus on their strategic goals, a

strong team, shareholder success and a watchful

eye on tomorrow, KPRL is poised to meet any market

demand, achieve any target they set and continue

to grow and flourish. Regardless of industry twists

in trend or the potential for economic pressure

in the coming months, this company has the firm

foundations for future growth. q

We specialize in the following services:-

Multi - Storey Buildings & Housing Schemes

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WE ARE PROUD TO

BE

ASSOCIATED

WITH KENYA PETROLEUM REFINERIES LTD.

30 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 31


The World Nuclear Association (WNA), headquartered in London, England, has

an interesting position on nuclear power. The association, which represents members

all over the world, is a private-sector organization advocating for peaceful world use

of nuclear power as a sustainable energy resource.

T

he WNA is talking about nuclear energy in a positive way. They are

concerned with generation and other aspects of the nuclear fuel

cycle including conversion, mining, enrichment, fuel fabrication, plant

manufacture, transport, and the safe deposit of spent fuel. The association

represents the interests of its members by promoting public understanding of

nuclear technology. On the WNA website, the organization explains their mandate

this way: “To serve as the pre-eminent global forum and commercial meeting

place for those engaged in providing the world’s largest source of safe, economic

and environmentally friendly energy; and to provide a respected information

service on nuclear energy and to speak pro-actively on behalf of nuclear energy

amongst policymakers, opinion leaders, the media and the public”.

John Ritch, Director General of the WNA, has spoken at many worldwide

events, and is just the right representative for the job. Ritch joined the WNA in

32 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 33


January 2001 after serving as a U.S. ambassador to

UN organizations in Vienna for several years, among

them the International Atomic Energy Agency and the

Comprehensive Test Ban Treaty Organization. Ritch was

active in promoting the IAEA’s global strengthenedsafeguards

system and new conventions on nuclear

safety. His previous experience as a staff adviser to

the U.S. Senate Foreign Relations Committee for a

period of 22 years has only helped his term at the

WNA – as he was previously a specialist in East-West

relations and nuclear arms control. Ritch is also a

Rhodes Scholar, adding to his impressive resume.

Advocating the future

Ritch’s job demands that he speak about the possible

consequences of population growth and the need

for more energy to sustain this growth. In a speech in

Paris on June 29, 2009, at Platt’s 4th Annual European

Nuclear Power Conference, Ritch explained how

disastrous the implications of un-sustained energy

use are:

“Between now and 2050, as world population

swells from 6.8 billion toward 9 billion, humankind

will consume more energy than the combined

total used in all previous history. Under present

patterns of energy use, the consequences will prove

calamitous.

The resulting pollution will damage or ruin

the health of tens and likely hundreds of millions of

citizens, mainly in the developing world. Far worse,

the intensifying concentration of greenhouse gases

WNA Affiliates include:

• Environmentalists for Nuclear Energy (EFN)

International Chernobyl Centre (ICC)

International Youth Nuclear Congress (IYNC)

• Joan Pye Project

• NSnet (Nuclear Safety Network)

• Supporters of Nuclear Energy (SONE)

• Uranium Information Centre (UIC)

• Women in Nuclear (WIN-Global)

Nationally oriented Affiliates include:

• American Nuclear Society

• Australian Nuclear Association

• Austrian Nuclear Society

• Brazilian Association for Nuclear Development

• British Energy Association

• British Nuclear Energy Society

• (British) Nuclear Industry Association (NIAUK)

• Bulgarian Atomic Forum

• Bulgarian Nuclear Society

• Canadian Nuclear Association

• Chinese Nuclear Society

• Czech Nuclear Society

• Finnish Nuclear Society

• Finnish Youth for Nuclear Energy

• French Nuclear Society

• German Atomic Forum

• Indian Nuclear Society

• Italian Nuclear Association

• Japan Atomic Industrial Forum

• Japanese Atomic Energy Society (AESJ)

• Kazakh Nuclear Society

• Korean Nuclear Society

• Polish Nuclear Society

• Romanian Nuclear Energy Association (AREN)

• Russian Nuclear Society

• Slovak Nuclear Society

• Spanish Nuclear Society

• Swedish Nuclear Society

• Swiss Nuclear Society

• Ukrainian Nuclear Society.

will take us past a point of no return as we hurdle

toward climate catastrophe. Today the world

economy is producing greenhouse emissions at

the rate of 30 billion tonnes per year - nearly 1,000

tonnes per second.

Our best Earth-system scientists warn that

greenhouse gas emissions, if continued at this

massive scale, will yield consequences that are -

quite literally - apocalyptic: increasingly radical

temperature changes, a worldwide upsurge in

violent weather events, widespread drought,

flooding, wildfires, famine, species extinction, rising

sea levels, mass migration and epidemic disease

that will leave no country untouched.

For all of us, even those most determined to

face reality, the crisis we face is counter-intuitive for

simple reasons of human instinct.” He states that

there is a necessity for a “Nuclear Century”:

“Our world - developed and developing countries

together - must achieve a massive expansion in the

use of nuclear power if we are to meet the needs

of a growing global population while preserving

the planetary environment on which civilization

depends.”

The basic function of WNA

Essentially, the WNA represents the nuclear industry

by being a conduit for information. Ritch says “we

speak for the nuclear industry in the most basic

way – by providing accurate and comprehensive

34 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 35


information about it”. The association considers

its role of facilitation essential – as they “facilitate

commercially valuable interaction among Institutional

Members”. The WNA facilitates working groups, helps

them share information and then develops analysis

on various technical, trade, and environmental issues.

These issues include:

• nuclear fuel production

• industry economics

• nuclear trade issues

• radiological protection

• ‘nuclear event’ definition

• transport

• waste management and decommissioning

• sustainable development and climate change

• security of the international nuclear fuel cycle

• safe and sustainable uranium stewardship

• global strategies on public education and

public policy

A valuable partner

The activities undertaken by the WNA are embodied

by the WNA Charter of Ethics, which illustrate a

fundamental point: “nuclear energy is not a competitor

of ‘renewable’ technologies such as wind and solar

power, but rather a needed partner in meeting the

world’s vast and expanding need for clean energy”.

For more information on the WNA, visit

www.world-nuclear.org.

36 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 37


Since its’ inception in 2001, Bear Creek Services

LLC has grown into a unique oilfield consulting

and service company. This diverse and respected

Louisiana-based company began as Bear Creek

Environmental Systems with “a small fleet of vacuum

trucks and a saltwater disposal facility in Bryceland,

Louisiana” and today offers a full suite of services

including Engineering and Wellsite Supervision,

Environmental Consulting, Trucking and Fluid

Disposal Services, Clear Fluid Sales & Service, and

Petrochemical Sales & Services.

In 2005 the company began offering

environmental consulting services with a primary focus

on the oil and gas industries. Presently Bear Creek’s

Environmental Consulting Division is “promoting

remediation and reclamation technology transfer

into the oilfield to expand our client’s options for

managing fluid releases and waste water” according

to their online company biography.

By 2006, through a merger with McGinnis

Industries, Bear Creek expanded into Petroleum

Engineering. McGinnis has offered consulting

petroleum engineering and wellsite supervision since

1990 which significantly enhanced the company’s

wealth of knowledge and service portfolio.

In 2008 Bear Creek Environmental Systems, LLC

was renamed Bear Creek Services, LLC in order to

better reflect the vast range of products and services

they offer to the oil and gas industry. In 2009, Bear

Creek expanded its trucking and disposal division

and launched its Fluid Sales & Service Division. Bear

Creek’s customers are recognizing the value in having

fewer contractors to deal with to meet their various

needs and the value-added nature of bundling

sets of services. Casting an eye over their record of

steady growth and their most recent developments,

Bear Creek looks all the more promising. IRJ caught

up with Dr. Nathan Hutchings, Bear Creek Services’

President and COO, as he revealed to us an exciting

new development with the potential to revolutionize

water reclamation with practically no carbon footprint:

Bear Creek’s Green Machine.

The Bear Creek Green Machine

The research and development division within Bear

Creek Services stands out with a new machine to

reclaim oilfield wastewater.

The Green Machine is a wastewater

38 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 39


eclamation system that has a very small carbon

footprint, which is a big bold statement! The whole

machine runs off of a very, very small amount of

conventional energy” Hutchings says.

“For example, we’ve been able to clean over 500

barrels of reserve pit water on less than 20 gallons

of gasoline and a five kilowatt generator, which is

a tiny amount of energy compared to the energy

consumption of other water reclamation systems. So

it’s very, very green in that sense. Although the Green

Machine requires energy to reclaim water, we’re

harnessing the energy that’s in the chemistry to drive

the process. The potential energy in the chemistry is

currently wasted in the oil field by accident.”

Hutchings says that the technology used within

this process is quite remarkable.

The key technology inside the units is

called forward osmosis (FO), and our partner, HTI

(Hydration Technologies Incorporated), designs the

FO membranes. FO differs from reverse osmosis and

other membrane technology by using a clean solution

with a high concentration of salt, sugar, or other

substance to draw the water through the membrane

rather than push it through with pressure” he says.

The solids and solutes in the waste water stay on

the dirty side of the membrane, and the water is

selectively drawn through to the clean side of the

membrane.

Hutchings also explains that the fluid produced

by the reclamation of drilling waste during this process

is of a very high quality.

“It’s crystal clear, and we can control the

concentration of salt in the produced fluid to be

what our client’s need for the completion stages of

their well. The fluid has a very long shelf life and it’s

affordable. So when you put all of this together we can

help reduce the strain on the fresh water resources

and help reduce the carbon footprint of the industry

while using a currently wasted alternative energy,

furthermore, by reducing the volume of waste to

hauled off and the need for bringing additional

“We give the client an affordable, ecofriendly

product that they’re going to buy

anyway for the next stage of their well

while reducing their waste volume, and

all of that can happen through one trailermounted

machine that can be set up on a

remote location in just a few hours.”

products to the location, we can further reduce the

carbon footprint on the industry” Hutchings says.

“We give the client an affordable, eco-friendly

product that they’re going to buy anyway for the next

stage of their well while reducing their waste volume,

and all of that can happen through one trailermounted

machine that can be set up on a remote

location in just a few hours.”

What’s Next for Bear Creek?

The ‘Bear Creek Green Machine’ is an excellent

40 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 41


example of the innovative, client-supportive

developments taking place within the company;

however it’s not their only unique value-added

project. Another subject Hutchings places great

interest in is the potential for further use of Geographic

Information Systems (GIS), another one of Bear

Creek’s many services.

“I really believe that the oil and gas industry is

going to become more dependent on GIS (and they

should become more dependent on GIS) to integrate

the data gathered in the oil patch with the GIS

systems of the municipalities, regulatory agencies,

the highway departments, and even the census

bureau. Integrating those information networks and

superimposing them on a geographical model offers

a wealth of knowledge to really add value to the

long-term sustainability of the industry- and that is

yet to be capitalized on effectively” Hutchings says.

Bear Creek’s mission is “to deliver services that lead

to your success using our expertise and knowledge.

Bear Creek will manage your projects like they are

our own. When you choose Bear Creek, your goals

become our goals, and we are with you every step

of the way.”

Their diverse suite of quality services, and sights

set firmly on developing value-added innovations

are great indicators of their client commitment,

industry expertise, and foresight into helping solve

the next generation of problems facing the industry.

Expect big things from Bear Creek! q

42 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 43


5916 Industrial Dr Ext, Bossier City, LA 71113 | 318-752-2293



Specialized in

CONCRETE CONSTRUCTION





BEAR CREEK’S G.I.S SERVICES DIVISION

Hutchings has a forward-thinking view towards the industry and places great importance on furthering

our use of G.I.S. At Bear Creek the team is already well-poised to be ahead of the rest of the pack.

“A lot of operators only use it with the thought of “I need my maps to show me where my wells

are” and they don’t use the dynamic data sets that can be created through that tool to give them more

information than just “where are my wells” and actually make them better operators because of it” he

explains.

Amongst the many diverse services offered by the Bear Creek team, their G.I.S Services Division

‘is your one-stop geospatial and Geographic Information System (GIS) consultant in the Ark-La-Tex

region; according to their website.

‘Our professional staff offers a full range of GIS services include spatial data acquisition &

management, topographic mapping, land/lease mapping, , spatial analysis for marketing & client

development, productivity profiling, and customized application development for standalone and web

based information solutions’ it continues.

‘Bear Creek knows how things are done in our own backyard. Our combined experience working

with oil/gas clients gives us the ability to achieve your outcomes quickly and effectively.’

44 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 45


THE TRUE ENERGY TRUST ANNOUNCES GROWTH-ORIENTATED REORGANIZATION

The True Energy Trust is an oil and gas exploration and

production trust based in Calgary, Alberta.

‘True is powered by a diverse asset base, focused on

sustainable growth both in its people and in its properties.

True has a significant multi-year drilling inventory of

locations in Alberta, Saskatchewan and British Columbia’

their website says.

The Trust, formed in 2005, focuses on these regions,

including some assets in the Peach River Arch region of

BC.

Planning and presenting for tomorrow

The company clearly states their ongoing objectives in

their company presentation as:

• Operating Within Cash Flow: Targeted reductions in

G&A and operating expenses in early 2009, Staffing

levels and costs reduced by approximately 30 per

cent, maintaining an active hedging program to

mitigate vulnerability to negative commodity price

fluctuations.

• Controlled Capital Program; Total capital budget for

2009 of approximately $15 mm

• Production Base Focus; Continued optimization,

maintenance programs and production tie-ins

• Continued Debt Management; Reduced debt by $61

million over the past two fiscal years while paying

distributions, reduced debt in June/July of 2009 by an

additional $101.5 million

46 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 47


The presentation goes on to lay out their growth

formula too:

• Inventory of low risk development locations; 320

locations, Over 5 years of drilling inventory

• Unrisked production adds of 15,400 boe/d

• Extensive undeveloped land base of 274,000 net

acres

• Large geophysical database; Over 1,300 km2 of 3D

seismic, 32,900 km of 2D seismic

The company, headed by Raymond G. Smith,

President and CEO, is in an excellent position from

which to execute these plans. Their new management

team offers a combined experience of over 175 years,

they have a stable production base of 6,500 boe/d,

61 per cent of their production is now operated, they

have a large undeveloped land base of 274,000 net

undeveloped acres, a significant inventory of drillready

locations and tax pools of $400 mm.

True Energy is committed and growth-orientated

in their aims and activities, but these focuses are just

the beginning.

On May 1 2009 it was announced that Baytex

Energy, an oil and gas income trust, had entered into

an agreement with True Energy to acquire their oil

and gas assets in the Kerrobert and Coleville areas of

southwest Saskatchewan and gas assets located in

the Ferrier area of west central Alberta, Canada for

$93 million Canadian Dollars. This divestiture of the

majority of True Energy’s oil and natural gas assets

48 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 49


in the area allowed the company a significant

reduction in net debt which has left them wellplaced

for their next move.

The growth-oriented reorganization

On August 19 True Energy Trust made another

pivotal announcement. The company said that

it now plans to convert to a growth-oriented

exploration and production company.

Under this reorganization, unit holders of

trust units in True Energy Trust will receive Common

Shares in a brand new corporation on a one-forone

basis. Those with Exchangeable Shares in

True Energy are set to be able to change these for

Common Shares in this new company based on the

current ratio of the Exchangeable Shares. According

to the True Energy press release, the new company

will have ‘78.8 million Common Shares issued and

outstanding after closing.’

The True Energy management and Board of

Directors have taken various measures to ring about

the restructuring of the company operations.

‘Management is now comprised of a proven

team of professional management in all key

operational areas of the organization including

a team experienced in providing organic growth

through full cycle exploration, exploitation and

development’ the press release states.

‘Commencing in the first quarter of 2009,

the Trust implemented a cost control strategy

and has reduced operating expenses and general

administrative expenses in excess of 30 per cent

from 2008 level.’

True Energy also considered their maintained

production levels with minimal capital spent and

‘diligent field optimization programs designed to

arrest declines’ in this move.

‘On August 17, 2009, the Trust finalized new

$85 million credit facilities consisting of a $10

million demand operating facility and a $75 million

extendable revolving term credit facility, with the

borrowing base subject to redetermination on

March 10, 2010’ the press release continues.

‘As a result of significant steps taken in 2008

and 2009 to improve its balance sheet by reducing

outstanding indebtedness and streamlining its

operating cost structure, the Trust now has the

financial flexibility to pursue a business plan as

a growth-oriented exploration and production

company with a strong balance sheet.’

Two things ring out in True Energy’s latest

announcement. The first is the company’s enviable

ability to stick to strategic goals regardless of

economic climate or other such unforeseen

changes and the second is their overwhelming

commitment to their shareholders. This latest

move is a very exciting development for them

and the True Energy Trust are set to make some

great changes in pursuit of further growth over the

coming year. q

50 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 51



We intend on being the best drilling company in the world”

Brian Rudd, co-founding shareholder and CEO of Capital

Drilling Limited says.

The company began in the Lake Victoria Goldfields region

of Tanzania, East Africa back in 2005. Here they worked on the

Kabanga Nickel Project which is a joint venture between Barrick

Gold Corporation and Xstrata.

Soon after they moved on to work in Egypt with Centamin

Egypt Limited, then on to Zambia to work on a nickel deposit

with Australian listed mining company Albidon.

“From 2006 we grew quite significantly and spread further

out with new projects at the Geita Gold Mine for Anglo Ashanti

in Tanzania. We added more rigs in Egypt and in Zambia. In 2007

we started the Reko Diq Project in Balochistan, Pakistan which

was a joint venture with Barrick and Antafagasco. Then in 2008

we started in Papua New Guinea with Barrick Asia Pacific then

more recently with Allied Gold on the Simberi Island Mine. From

March 2009 we commenced operations in Mozambique for

Riversdale Resources and Baobab Resources” Rudd explains.

Fast-forward to 2009 and Capital Drilling shows no signs of

slowing. The global economic crisis has proved to be little more

than another challenge for Capital Drilling. The company has

remained flexible and streets ahead in its path.

“Right now we have 60 drill rigs in our fleet having begun in 2005

with just two. We currently have about 645 employees groupwide.

In November 2008 we changed the focus of the company

due to the global crisis and we moved into the blast hole drilling

sector” Rudd says.

52 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 53


The global economic crisis has proved

to be little more than another challenge

for Capital Drilling. The company has

remained flexible and streets ahead in

its path.”

“We are now operating blast hole rigs in Egypt,

Zambia, Tanzania and plans to expand into

other regions as demand requires.”

Capital Drilling Today

Capital Drilling has come a very long way in

just five years, but more recently the company

adapted to industry pressures and the global

economic downturn in moves which are by no

means simple.

“Since our inception in 2005 with two

air core rigs we now operate a full spectrum

of rigs, truck and track mounted and heliportable

machines and an average age of five

years means we operate one of the youngest

fleet of rig in the industry and this month

we are adding another new purpose built

track mounted RC rig to the Geita Gold Mine

in Tanzania” Rudd says. The company has

a registered office in Bermuda, a corporate

office in Singapore and operational offices

in: Johannesburg (SouthAfrica), Cairo(Egypt),

Karachi(Pakistan), Mwanza(Tanzania), Lusaka

(Zambia), Bor(Serbia), Yerevan (Armenia),

Lae (PapuaNewGuinea), Lubumbashi (DRC),

Tete(Mozambique).

The business complies with all local

government regulations and labour laws and

undergoes regular audits under the direction

of the lead auditor Deloitte.

“We have considerable experience in

establishing operations in emerging markets

and navigating the often complicated

requirements imposed by local business laws

and regulations, taxation, exchange control

regulations, labour laws, goods import and

customs controls. We have built up a strong

network of local relationships to ensure timely

and cost effective delivery of personnel,

equipment and consumables to our field

operations and thereby maintain our high

standards of quality and reliability” Rudd says.

54 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 55


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their team. As Rudd rightly points out, their

worldwide employee base has tipped over 600

now, yet the company are still in-tune with the

needs of individual workers.

“We’re quite heavily focused on training

and development and within that we do have

a pretty intense internal training program. We

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operate another division of Capital Drilling

which is called Capital Support Services which

is solely to provide training and development

to our Capital Drilling employees, nationals and

ex-patriots, to develop their skills in all areas

from management styles to ability to drill, to

internal driver training. For drillers we follow

the Mineral Drillers of Australia Association

drilling training program” Rudd says.

“We set clear objectives and career paths

56 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 57


for our staff. Our team have a decent future with the

company and we have a very low turnover of staff and

this is due in part to our growth and also the respect

that the management team holds for everyone that

works for us. Whatever level of the company a person

might be, they are free to ring myself or any of the other

managers at any time should they have a problem or

need us to help them deal with an issue.”

In conjunction with this supportive staff

structure is the emphasis Capital Drilling places on

safety standards.

‘At Capital Drilling, safety is our number one

priority, sitting at the heart of the company values.

We have developed a large team of health and safety

specialists and we deploy these dedicated specialists

into all of our countries of operation. We are committed

to regular performance appraisals and operate in an

environment of continual improvement’ their website

says. “We’ve grown well with our client base and we

have a reputation now for our commitment to safety”

Rudd agrees.

“Our average age of our drill rigs is different

from a lot of our competitors. We’re sitting at about

four years in age in our drilling fleet so it’s a fairly

modern fleet. All of these come with the latest safety

equipment which is a heavy focus in our company.

We make sure everyone comes home with ten fingers

and toes.”

Capital Drilling Tomorrow

The company mission statement “developed market

standards for emerging market operations” shines

through however you approach Capital Drilling.

Be this growth, employee training, health and

safety, performance or quality, the aim is clear and

the company are already making their next move.

“One of the other new areas we’re going into

is underground drilling and coal bed methane” Rudd

says. This is one company set for a very exciting 2010

and beyond. q

For Barrick, the development of mining is

associated with the economic and social

growth of nearby communities.

This is what is known as Responsible Mining

which entails the utilization of proven

technology, fulfilment of the highest standards

of industrial security, environmental, social

and human resources.

Responsible Mining

w w w . b a r r i c k . c o m

58 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 59


The International Marine Contractors Association (IMCA) represents offshore,

marine and underwater engineering companies. Today with more than 600

members spanning 52 countries throughout the globe, IMCA has come a long way

in its near 15 year existence.

The association was formed in 1995 from two previous trade associations: The

Dynamically Positioned Vessel Operators Association (DPVOA) which was formed in

1990, and the Association of Offshore Diving Contractors (AODC) which began in

1972. Common membership and work programmes saw these associations merge

to form IMCA in 1995.

They came together and formed IMCA with a good constitution and a good

structure which has served us well” IMCA Chief Executive Hugh Williams says.

“Since 1995 membership has grown more than four-fold and focus has widened

to encompass all aspects of marine construction, disciplines and geographies.”

Williams joined IMCA in 2002. His extensive background in the industry

began when he trained as a chartered civil engineer in dock and harbour design

and site supervision work. From then on his diverse experience has allowed him

a comprehensive perspective over the different aspects of the wider marine

contracting industry which IMCA supports. Williams worked at Noble Denton and

60 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 61


Hugh Williams

“an IMCA guideline has

to do exactly what it

says on the tin”

specialised in marine operations, in particular

heavy lift crane operations.

“Firstly, IMCA writes a lot of guidelines which

is similar to part of my role at Noble Denton” he

says.

He also worked as a Business Development

Manager for Heerema Marine Contractors, UK.

The guidelines we write are for marine

contracting which is what Heerema does” Williams

explains.

“And also in terms of the member companies

of IMCA, every company I’ve ever worked for or

worked alongside or consulted with or met on a

project somewhere or another, just about every

company, is a member of IMCA so I’m amongst all

my old friends and contemporaries doing the sort

of work that they do while we at IMCA try to help

them.”

IRJ caught up with Williams to hear all

about IMCA’s latest focus area of geographical

development: Central & South America, and their

continued efforts towards “enhancing the Common

Marine Inspection Document (CMID), updating

various diving documents and encouraging the

spread of our competence framework” throughout

the world.

IMCA’s New Central & South America Section

Williams recalls joining in IMCA in 2002 and

explains that they had “sections in the Middle

East & India, and another in the Far East which we

called Asia-Pacific.”

He explains that each section had quarterly

meetings for their members to gather together.

“One of the things we particularly wanted to

do was to get started in North America, particularly

in Houston. So back in 2002 we started what we

called the Americas Deepwater Section. We had a

number of members there already and this meant

that they could meet locally, instead of before when

it was expected that they would attend wherever

There is a tremendous focus on

offshore construction in Brazil

at the moment and that’s one

of the areas we really want to

build up.”

we happened to hold an international meeting. In

doing this we realized that it seemed like Europe

wasn’t represented. We didn’t want Europe to be

thought of as head office because that would be

quite the wrong way to think of this international

organization. Despite the fact our secretariat is

based in London – we aren’t European orientated

– far from it!”

To balance this out across the globe, from late

62 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 63


2002 IMCA had four sections which corresponded

to the geographic time zones: Americas Deepwater,

Europe and Africa, Middle East & India and Asia-

Pacific.

“That worked very well” Williams says. “Then last

year we took a very close look and said ‘it’s all

very well having an American section, but people

in South America don’t travel to Houston for their

quarterly meetings with us, it’s too far.’ “

IMCA split their Americas section into North

America and Central & South America on June

1 2009. “Our initial focus in this new section is

fundamentally on Rio and Brazil” Williams says.

“We’re building up this section. We’ve been

over for meetings and we will have our annual

seminar there in November. This section is

extremely important to us. Firstly, there’s a huge

industry offshore of Brazil and we already have lots

of IMCA members based or working there. Also in

this curious economic time, Petrobras is one of the

few big companies that is actually still investing

which is very good, so there’s lots of work going on

despite the financial crisis. There is a tremendous

focus on offshore construction in Brazil at the

moment and that’s one of the areas we really want

to build up.”

Williams explains that “in a place like Brazil,

international contractors integrate with local

contractors. Up until now all of the projects in

Brazil have been Petrobras projects but now they

will be integrated with international clients too.

So there’s both client and contractor integration

occurring whilst the geographical distances also

encourage companies to joint-venture in the

region. Petrobras and Brazil have developed some

of the most sophisticated deepwater projects in the

world today so there is a lot of learning, knowledge

and technological integration set to take place both

ways, out of and into the region, as international

companies begin to get involved there.”

This is where IMCA excels. They are an

international trade association and they publish

their own guidelines of good practise. These cover,

as far as possible, all aspects of marine construction

in all parts of the world. “If gaps are identified we

try to plug them.”

IMCA Crafting, Shaping & Developing

Guidelines

Williams explains that while structurally decisions

such as the creation of their Central & South

America Section come from IMCA’s management

committee, their technical committees follow this

up with ongoing technical work programmes aimed

at progressing their side of these advancements.

To cover the wide and intricate guidelines IMCA

supports, develops and publishes, we need only

look at some recent projects.

“One particularly interesting one is the

Common Marine Inspection Document (CMID)

and we have done a lot of work on ROVs and

competencies this year too. We publish about 20

64 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 65


new guidelines a year but these are good examples”

Williams says.

The new CMID document (IMCA M 149 Issue

7), now available from IMCA, has been thoroughly

reviewed and rewritten, with clearer structure; the

previous subjectivity removed in the questions;

and incorporating updates to reflect technological,

operational and regulatory developments. It

now provides additional guidance on inspector

competence” IMCA’s August dated press release

says.

Now IMCA is looking at developing the electronic

version or ‘e-CMID.’ These developments and more

are all available at www.imca-int.com/cmid.

In August this year IMCA published new IMCA

Guidance on Remotely Operated Vehicle (ROV)

Operations.

“This is a good example of the work we do. The

word ‘ROV’ in the title could be supplanted by vessel,

a dynamically positioned vessel, a crane or a diving

system and that’s what we write about, essentially it’s

the safe and efficient use of some marine contracting

equipment or system. It’s a high level guideline for an

operations procedure. This usually includes something

about personnel, training and competence and also

something about the equipment itself such as what

standard the equipment should be built to, how it

should be maintained, how it should be tested, how

strong it should be and so on. Each of those three

subjects: the personnel, the equipment and the

procedure are in this ROV document.”

Williams explains that “communication is key at

IMCA,” not only with members and non-members in

the industry but in their successful media profile and

promotion, and the collaborative process involved in

crafting these guidelines.

“If it is a new document we will ask members if

they have their own procedures in place and create

a joint guideline from our various different member

companies and promote this as being ‘good practise’

for everybody,” Williams says.

“That’s how we go about writing a new

document. This one (the use of ROVs) is simply an

update via our technical committee who are the

experts on these areas. We work with any feedback

we’ve had on previous versions, and try to make sure

that the new version covers all angles. By doing this

through our technical committees, through our users

and through the clients as well, we are confident that

we are keeping the content up to date and abreast of

technology and practise.”

IMCA Tomorrow

Perhaps the easiest way to comprehend the vast

scale of IMCA’s work is to look at their efforts both

structurally and technically as Williams has explained.

There is no denying their worldwide reach and their

continued work to include their members from both

the most central locations to the far-flung corners

of the globe. Equally admirable is the emphasis on

technical excellence and as Williams says “an IMCA

guideline has to do exactly what it says on the tin”.

IMCA’s latest focus on the Central & South

America Section is an exciting development for

any company in the region and for the safety and

efficiency of the local marine contracting industry

as a whole. IMCA is ready to rise to any challenge,

support and work alongside its members and

continue to aid growth and development in the

guidelines, communications and practise within the

marine contracting industry.

On November 4-5, IMCA is holding their annual

seminar in Rio de Janeiro, Brazil. This year the theme

is ‘Integrated Marine Operations in Challenging

Times’.

IMCA’s press release promises ‘plenary sessions

and separate parallel sessions on marine, diving and

ROV/offshore survey, reflecting the diverse range

of operations carried out by the marine contracting

industry. There are parallel workshops on a variety of

topical and relevant issues, as well as the associated

exhibition of supplier members and variety of social

and networking events’ and a detailed breakdown of

events, services, locations and contact information

can all be found at www.imca-int.com/events.

www.imca-int.com q

66 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 67


ČEZ is a joint stock company which was established in 1992

by the National Property Fund of the Czech Republic. Today

the fund is still the majority shareholder in the company

which lists its core business activity as ‘electricity production

and sale and related support of power system’ according to

the company website.

Petr Závodský joined ČEZ / Temelín Nuclear Power Plant

(NPP) in 1994 just one year after he graduated from the Electrotechnic

faculty of Žilina’s University, Slovakia.

68 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 69


“ČEZ has an

advantage not only

in having employees

with current

experiences from

construction and

commissioning but

they can rely also on support of local

industry”

“My first position was operational specialist

of I&C - safety systems. Later on in 1996

I became Project Manager of Independent

Verification and Validation of the Safety

Systems Software. The objective of this

program was to assure ourselves as well as

the Czech regulatory body about the quality

of the safety systems software (Primary

Reactor Protection System, Diverse Reactor

Protection system, Post Accident Monitoring

System, Diverse Monitoring System)”

he says.

The software was developed by

Westinghouse and has been verified and

tested by DSAS (joint venture of Rolls Royce

and SAIC). In 2006 I become one of the first

members of the team preparing new nuclear

projects within the ČEZ Group. As of

April 1st, 2009 I am leading the “nuclear”

team in the Investment Division of ČEZ.”

Today ČEZ is developing four nuclear

projects.

“Two in the Czech Republic (NPP Temelín

Units 3&4, Dukovany Unit 5) and two

abroad (NNP Jaslovské Bohunice with Slovak

company JAVYS and NPP Cernavoda in

Romania). My team is responsible for three

of them” Závodský says.

The Cernavoda project is under responsibility

of International Division of

ČEZ and our team provides technical support

only. Of course we keep and develop

contact with other potential investors and

utilities as well as with international organizations

too.”

Nuclear Power in the Czech Republic

Závodský explains that NPP’s in the Czech

Republic have been built according to Russian

design and specifications, but the

components such as the reactor pressure

vessels, steam generators, primary piping,

turbines and generators of these plants

were built within the Czech Republic itself.

“Power plants were constructed and

erected by Czech companies too, therefore

ČEZ has an advantage not only in having

employees with current experiences from

construction and commissioning but they

can rely also on support of local industry”

he explains.

ČEZ’ most advanced NPP is Temelín

3&4.

“We just started Public tender for the

EPC turnkey contractor, we are working on

the EIA report and also on preparation of

related investment (preparation of site, interfaces,

communications, etc.)” Závodský

says.

Their other Czech plant, Dukovany 5,

70 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 71


is still in its early stages.

“We are finishing pre-feasibility studies, mainly the

connection to the high voltage grid, use of raw water from

the Jihlava river for cooling purposes, transportability of

heavy and oversize equipment to the site, etc” Závodský

continues.

The yearly production from those two sources is about

25TWh which is approximately 35 per cent of ČEZ’s production.

There are also important investment projects, such as

the power up-rate at Dukovany (with power increase from

440MW to 500MW), the life extension of Dukovany from

the original design life of 30 years to 50 or possibly 60 years

of safe operation. As you can see the nuclear fleet is a very

important part of ČEZ portfolio.”

Závodský predicts that 2016 will be a challenging year

for the company.

“Irrespective of the current economic crisis we expect

a lack of electricity in the Czech Republic around year 2016

when Czech Republic could become an importer of electricity.

Currently we are the one of the biggest exporters in Europe”

he says.

The challenge will be to build enough new sources

as replacements for obsolete conventional plants to cover

consumption increase in future. Of course another big challenge

is to reconstruct and build new high voltage lines, but

this is task for the national Transmission System Operators

(in Czech Republic state owned organisation CEPS, a.s.).”

ČEZ Nuclear Goals

Roughly 70 per cent of the Czech Republic supports nuclear

72 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 73


If recent developments are anything to go by,

the company is in prime position to grow and enjoy

the wealth of support the country offers.

“In terms of nuclear, the short term goals of ČEZ

are to successfully conduct the “Safely 16 Terawatts”

program at Dukovany and “Safely 15 Terawatts” at Temelín,

which means to safely reach yearly production

16 or 15TWh respectively” Závodský says.

“Our long term goal is to construct new units at Temelín,

Jaslovské Bohunice and Dukovany, which will

be acceptable, safe and economical.”

Their Jaslovské Bohunice project in Slovakia has

been another exciting venture for the company. The

signature of agreement between JAVYS and ČEZ is

an achievement Závodský highlights. The agreement

was signed on May 29 at the fourth European Nuclear

Energy Forum in Prague, attended by Prime Ministers

Jan Fischer of the Czech Republic and Robert Fico of

the Slovak Republic. The JAVYS press release states

that ČEZ will have a 49 per cent share and JAVYS will

have 51 per cent and the schedule for this project will

be realized upon completion of the feasibility study in

2010.

The Jaslovské Bohunice is an example of the

successful international partnerships ČEZ is looking

to further, and the Temelín and Dukovany projects

provide insight into the company’s strong and established

native endeavours. The nuclear power goals of

ČEZ are clear and this coming year looks very promising.

q

power. This is one of the highest proponent statistics in the European Union but

Závodský remains keen to emphasize where the tension on the subject lies.

“A potential new nuclear power plant is not a safety problem; technical problem;

financial problem; environmental problem but it is a political and public acceptance

problem” he explains.

The Czech parliament has 200 members out of which 190 support nuclear

energy but the Green Party (with 6 seats) as part of government coalition enforced

antinuclear governmental agreement which delayed Temelín Project at least for

two years.”

74 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 75


CJSC SRIDS “InjGeo” of Krasnodar, Russia, is a scientific institute founded in

1996. InjGeo was created in order to ‘create a large high-level enterprise

that could fulfil complicated design works and engineering surveying,’ according

to their website.

The company went on to mature through various incarnations leading up

to its 10-year anniversary in 2006. What began as a crack-team of 20 specialists

committed to delivering engineering survey excellence has developed in line

with the company focus on ‘the latest achievements in science and engineering

progress.’

The company grew extremely quickly and became ‘capable of carrying out

complicated high-quality design and survey activities within shortest terms,’ the

InjGeo biography explains.

As the company has changed to pursue diverse and contemporary business

directions, departments added to meet new industry trends include engineering

survey, design, economy and finance and development arms.

Today InjGeo is 700 employees strong, climbing to 1300 highly qualified

specialists when each of its branches throughout the Russian Federation is

accounted for.

The company guarantees collaboration and results at a high technical level, at

76 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 77


short term notice, with optimal cost efficiency

for projects and with high-level cooperation with

clients. Today the IRJ takes a closer look at the

Quality Management System (QMS) and exciting

projects that have seen InjGeo grow into one of

Russia’s leading institutes for the design of oil and gas

transportation and storage facilities.

Quality management system

Cast your eye over InjGeo’s mission statement and it

is clear that throughout the continual development

and changes in industry focus over the years, the core

company values remain the same;

• to perform high-quality production

• to establish high living standards for the personnel

of the company

‘From the very formation of SRIDS JCSC “InjGeo”,

the main priority of the company was quality,’ their

QMS background says.

‘If an engineering survey and design organization

wants to succeed in the labour-market and develop

its activity in proper way, it needs to be the very best

and beat all competitors. There is only one winner in

tenders and to deliver high quality services we have to

create preferable mark-ups and improve all auxiliary

resources. ’

The company breaks down its vital components

for success into quality and personnel, examining its

efforts to maintain high standards in both respects.

‘We consider the necessities of our clients. We

study their thoughts and feedback on our production

during collaboration with them. This information is

analyzed and results help us to improve our work

with the clients’ the company says, clearly stating its

consistently client-centric outlook.

‘Our staff are the main means of improving our

work within the company. We execute projects with

high quality (standards) and solve all tasks given to us

by our clients.’

‘This process-analytical approach in SRIDS JCSC

“InjGeo” lets us control and evaluate the activity of

the company. So we can form an in-depth and wellorganized

procedure where every employee is aware

of their tasks and duties.’

InjGeo explains its QMS strategy very clearly.

Every individual client or employee receives due

attention and respect. New technologies and

exceeding industry standards helps to further short

term capability, productivity and of course cost

efficiency. At InjGeo all of these values are held central

and acted upon as part of common practise in their

projects and research.

InjGeo projects

The Russian–Turkey gas pipeline dealings have been

big news of late. The last such agreement passed

just two weeks ago and many amongst the press

jumped ship as previous reports of potential Russian

monopoly over inter-European gas pipelines were

forfeited and predictions of cooperative energy

security partnerships shot up in their place.

InjGeo knows these stories well. The company

has worked on the tunnelling for the Northern

Caucasus mountain area of the much talked about

78 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 79


Russia–Turkey pipeline system. Other similar projects

they have been involved in include the Tyumen region

northern territories – Torzhok (North of the European

parts of Russia) and the Northern Russia -European

gas pipeline itself also. However pipeline project work

is just one part of InjGeo’s repertoire. The company

has worked in pipeline waterway crossovers, offshore

marine oil transfer complexes, oil transfer tank farms

and transfer stations, on the telemechanics of main

oil pipelines and on boiler plants too.

Although most of the projects InjGeo partners

on are joint ventures or research aspects for oil and

gas companies within the Russian Federation, the

company has also worked with European partners

such as ILF Consulting Engineers of Munich, Germany

and Saipem S.P.A of Milan, Italy.

InjGeo Tomorrow

On August 24, InjGeo completed developing their

final documentation for the construction of a new

main gas pipeline running between Akhangaran

and Pungan, through the Kamchik pass. Their press

release reveals that ‘construction of the above main

gas pipeline section is in progress’ now.

‘Mining, refinement and transport of oil and gas

is one of the most important economic aims of the

Russian Federation’ InjGeo’s website headline says.

With this subject becoming a favourite for world

media discussion and the strong experience InjGeo

has in exactly this field and beyond, the company is

preparing for a host of exciting new projects both

within the Russian Federation and in partnership with

neighbouring Europe. q

80 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 81


General Kinematics Corporation is a privately-held

company established in 1960 by the Musschoot

family in Crystal Lake outside of Chicago, Illinois.

“We have developed and are known for our

expertise in vibratory energy and its application in

the conveyance and conversion of material. We are

the leading supplier of systems for handling the cast

off assets of material within the foundry industry on

a worldwide basis” Gordon Frank, Vice President of

Sales and Marketing says.

“We also work in about 12 other heavy industries

where the conditions in which we employ our

technology tend to be some of the most severe and

tend to be the primary process lines within factories

which actually enable factories to run reliably and

predictably 24/seven. If our technology is not working

then plants will not run and function so we excel in

developing solutions which are reliable and suitable

for the applications.”

This world leading vibratory energy systems

company has 150 employees across their offices in

Europe, Asia and their native Illinois headquarters.

“With an employee base of only 150 people

it can become difficult for us to stand alone in the

82 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 83


market. We foster and develop relationships with

other companies where we cooperate in markets

to leverage our sales and our partner’s sales” Frank

explains.

This is how General Kinematics continues to

form and develop worldwide successful partnerships

today.

Going global

Frank explains that not long ago the bulk of General

Kinematics’ sales tended to stem from a little closer

to home.

“About seven years ago probably 80 per cent of

our sales were within the United States and within

perhaps 12 hours driving distance from our facility in

the mid-west, but now I would say that we’re probably

45 per cent in the U.S. for sales and 55 per cent

international and now 80 per cent of our customers

are within 12 hours flight from Chicago” he says.

The entire dynamics of our organization have

shifted and we’ve become a global organization. The

challenge of converting a company from a mid-west

United States company to a global company has had

its challenges over the time but we’re quick pace and

we’ve been able to adapt and become what we are

today; a global organization.”

Frank explains that the diverse range of

industries in which General Kinematics has partnered

reflects the “migration of the foundry industry.”

“We’re also doing turnkey facilities, waste to

energy facilities, working with other companies in the

commercialization of a very unique leaching process

in the precious metals area. We’re releasing and have

accepted orders for a new series of high capacity

screens for the mining industry. We’ve signed an

agreement with a mining supplier in China” he says.

“We’re also involved with many world renowned

mining companies both for screening feeding and the

leaching process we have introduced.”

This is not the only partnership that General

Kinematics has developed with a focus on China.

“We’ve formed a partnership with a fabricator

in the region to manufacture foundry equipment

for India and China. We also have a partner in China

promoting our coal handling technology which is wellestablished

in the United States and has taken hold in

China” Frank says

Continued stateside success

One partnership which exemplifies General

Kinematics strategic alliances is with fellow Illinoisbased

company United Conveyor Corporation. Frank

explains that this partnership sees UCC and General

Kinematics in “pursuit of dry bottom ash removal

systems for power plants.”

“We’ve developed the technology of placing a

conveyor directly below the throat of a coal power

plant furnace or boiler and there UCC is promoting

our technology and theirs to the power industry

worldwide. This means that ours is a very critical

technology in the system and we’re combined with a

very fine company out of Chicago as far as a customer

84 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 85


ase and other related technologies” Frank says.

The UCC is one of our strategic partners.”

Another interesting partnership is with The Savaged

Organization of Salt Lake City.

They basically operate the coking operations

at the refineries and we’ve developed a technology

for dewatering the coking operation in a mechanical

as opposed to use of retention ponds or static dewatering

bins and they’re promoting that technology

to their customer base” Frank explains.

The future foundry industry

Frank is clear about the direction in which General

Kinematics seeks to continue their strategic alliances

and growth.

“Our company strategy is to follow the migration

of the foundry industry. It’s shifting from the U.S and

Western Europe to the developing regions of the

world” he says.

“We have right to a market share in the

development of the foundry industry and we

migrate to other areas of the world through the

growth of foundry sales. Once in a region we explore

opportunities in other industries like steel, mining and

chemical. Our goal is to take our proven technologies

and capture market share in developing regions of

the world.”

General Kinematics will attend the FENAF 2009

Conference in Sao Paulo, Brazil on September 22.

Visit their booth to find out more. q

SCREEN MEDIA

www.linatex.com

www.durexproducts.com

Experts Providing Screening Solutions

The Screen Media Experts at Durex and Linatex Provides Operators the Optimal Screening

Selection to Minimize Downtime and Provide the Lowest Cost Per Ton.

86 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 87



I have been in the power system business and specialised in hydro generation

for 18 years” Christian Roy, President of power systems specialist Hemi

Controls says.

In fact, Roy has worked in hydrogenation and power systems since he left

school.

“I then worked at system design and implementation for a large

international corporation; this has been a great experience” he says.

“At a certain point, I figured it would be best to work on my own in order

to better serve customers and provide better project execution services. This

has been a turning point and major milestone toward the foundation of Hemi

Controls.”

Roy says that his brief spell working as a consultant affirmed in his mind

that the market demanded a specialized project execution task force.

“Hemi Controls was then founded and quickly became capable of providing

complete dedicated project execution services offering customised, efficient

and functional solutions that adequately integrate process control and electrical

power systems” he says.

“From two founders of the company (myself and René Leblanc), we

first built a team capable of handling one project. We are now more than 15

employees and capable of achieving many large projects simultaneously.”

88 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 89


“We also offer our customers valuable

customisation of certain design and documentation.

For example, large utilities have drawings standards

and specific operational needs that we carefully

consider and implement in our products.”

Just as Roy noticed market demand for the

company in the first instance, he is in tune with the

changing needs and growing market place today.

“We had to adapt our own expansion to more

demanding customers. That is in addition to the

growing market” he explains.

The market is demanding more systems

rehabilitations due to 1970’s systems becoming

obsolete and in need of enhanced reliability

and performances, with added networking and

communications (data exchange and telemetry).

The market is also in demand of more green power

production and therefore new constructions. We

This pioneering quality which enabled Roy to begin

Hemi Controls is something the company still retains

today.

The company now runs projects from two

locations; Cochrane, Ontario (Northeast area) and

Chambly, Quebec (Montreal south shore area).

Roy explains that their primary customers are large

power production utilities such as Ontario Power

Generation and “hydro equipment manufacturers

(turbines/generators) that will use our services for

the design and supply controls/protections/SCADA

that complete their scope of work.”

IRJ caught up with Roy to discuss the future of

the hydro generation and power systems business

and the next step for Hemi Controls.

Hemi controls today

Roy is keen to emphasize the importance of delivering

“customer complete systems that are fully integrated

and designed to meet their specific needs” and uses

two key criteria to explain how Hemi Controls goes

about doing exactly that.

The emphasis is on providing trouble-free

efficient systems that meet the required reliability

and performances. We base our designs on thorough

knowledge of the process and equipment and also

always thoroughly test everything at factory before

site delivery” he says.







90 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 91


Plant protection rehab within existing cells.

Utility grade.

have moved into a larger facility that will support

our expansion, larger test labs and more fabrication

space.”

In terms of responding to technological

advancement, Roy says that the Hemi Controls team

enjoys testing new equipment and concepts and has

“significant lab testing and implement Research and

Development programs.”

“To stay on the leading edge, we continually

strive to enhance all of our activities; this as impacts

on our internal organisation as well as on our final

products” he says.

Relaying schemes are fully tested at factory and site. Local and Remote HMI Control and Protection panels, open

architecture PLCs

“As we provide “turnkey” style projects, we

generally apply the following statement order to sell

new products: “if it is good for us, it is good for the

customer and if it’s good for the customer, it’s good

for us!”

It perhaps comes as no surprise that the Hemi

Controls company culture leans towards “a lot of

place for thinking and ingenuity” in light of this.

“We hire smart people and encourage them to

be imaginative. There is always a way to make things

better” Roy says.

“We organize our project teams so each

member is part of a project from the beginning to the

end, (through design, manufacturing, installation and

commissioning). This allows for complete knowledge

of the project’s particulars, better coordination and

comprehension of the whole project process. All

members of the team are an important link of the

chain.”

Hemi Controls tomorrow

While Roy agrees that the global economic climate

of late has caused some customers to delay the

execution of new projects, it has not stunted Hemi

Controls’ plans going forward.

Roy highlights two main future

focuses for the company at this

time.

The first is to “complete our

project execution teams so that

we can satisfy the need of our

customers and avoid having to say

‘sorry we are fully booked!’” he

says.

The second is to “complete our

fabrication facility which is going

to secure quality and schedule

controls.”

Roy is also very clear about

the product Hemi Controls seeks

to provide for their customers.

“Today’s technology, clean

and simple development of

application with high level of

customer involvement via interactive design review

meetings. Ease of maintenance, no “blackbox” to live

with, but a tool that works for you” he says.

“New systems should not be considered as risky

and complicated; when properly designed, they are a

great enhancement!”

Coming from Hemi Controls; a pioneering,

technologically-minded, ever-developing company

brimming with expertise and customer-centric goals,

the future of the wider hydro generation and power

systems industry looks very bright indeed. q

92 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 93


“One of the biggest issues that we have in

Louisiana, and it filters through into the oil and

gas industry, is the litigious system”

The Louisiana Oil & Gas Association

(LOGA) was started in 1992 to represent

the independent and service sectors of the

oil and gas industry in Louisiana. The service

sectors of the industry represented by LOGA

include exploration, production and oilfield

services. The main goal of LOGA is to provide

their membership with a working environment

conducive to industry growth. The association

does this by warding off tax hikes, helping to

change regulations that are a burden to the

industry, and providing education to the public

and government.

Don G. Briggs, President of LOGA graduated

from the University of Southwestern Louisiana

and has been an oil man since his career

started. Briggs started LOGA with a group

of like-minded individuals in the oil and gas

industry, after the dissolution of a previous

association which was meant to serve the

industry. Originally Briggs wasn’t supposed to

take the lead role for more than the time it

took to get LOGA up and running – say two

or three months. But here it is, 2009, and he

is more involved in the association’s initiatives

than ever before.

94 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 95


ABOUT 1868 -- The Louisiana Oil and

Coal Company drilled a well about 15

miles west of Lake Charles in search

of oil but was unsuccessful although

it did reveal very extensive sulfur

deposits.

1870 -- A night watchman at an ice

plant in Shreveport accidentally

discovered natural gas emanating

from a well drilled in search of artesian

water when he struck a match. Gas

from the well was piped to the plant

to provide illumination--the first use

in the state of the fuel that today

heats the vast majority of Louisiana

homes and places of business.

Sept. 21, 1901 -- The Heywood well

six miles from Jennings was brought

in, producing the first oil discovered

in the state in commercial quantities

and marking what is recognized as

the birth of the industry in the state..

1908 -- The first natural gas pipeline

was laid in Louisiana. It brought gas

from the Caddo Field to Shreveport.

1909 -- The new refinery in Baton

Rouge (which is the Exxon refinery of

today) went on stream. Today it is, in

terms of capacity, among the largest

oil refineries on the North American

continent. This is also the year in which

construction began on Louisiana’s

first long-distance oil pipeline, which

by 1910 was transporting crude oil

from Caddo Parish to the Baton Rouge

refinery

ABOUT 1910 -- The first over-water

drilling in America occurred on Caddo

Lake near Shreveport.

1913 -- A major discovery occurred

in Northwest Louisiana when the Bull

Bayou Field was brought in.

1916 -- The well resulting in the

discovery of the Monroe Gas Field

was brought in.

1921 -- The prolific Haynesville Gas

Field was discovered.

1940 -- The oil and gas industry came

to Central Louisiana in a big way with

the discovery of the Olla Field in

LaSalle Parish.

1942 -- The Lake St. John Field on

the eastern border of Louisiana was

discovered.

Nov. 14, 1947 -- The first oil well out of

sight of land was brought in by Kerr-

McGee in the Gulf of Mexico about

45 miles south of Morgan City in the

Ship Shoal Block 32 Field, marking

the birth of the offshore oil and gas

industry.

1948 -- The Main Pass Field came in

near the mouth of the Mississippi

River.

1949 -- Three major fields were

discovered in the Gulf of Mexico off

the Louisiana coast. They were the

Eugene Island, Bay Marchand and

Vermillion Fields.

1954 -- The western boundary of

Louisiana’s offshore oil and gas industry

was established with discovery of the

West Cameron Field.

1975 -- Gerald R. Ford became the

first President of the United States

to visit an offshore oil platform when

he came to Louisiana on April 23. His

comment: “We just have to get more

and more of these.”

1982 -- Lease and royalty income

paid by the oil and gas industry to the

state of Louisiana soared to an alltime

record $624,529,812.

1988 -- Bullwinkle, the world’s tallest

man-made offshore structure, was

launched May 21, 1988 by Shell

Offshore, Inc. Bullwinkle carried a

$500 million price tag and is located

approximately 150 miles south of

New Orleans.

1989 -- The first tension well leg

platform was installed by Conoco in the

Gulf of Mexico with production from

the platform beginning November 8.

The platform floats on the surface

of the water and is connected to

a foundation template on the sea

floor by tubular steel tendons. The

platform was placed in 1,760 feet of

water, about 170 miles southwest of

New Orleans in the Jolliet Field.

1991 -- The search for oil goes further

offshore in the Gulf of Mexico. Shell

Oil made a deepwater discovery in

about 3,100 feet of water, about 130

miles southeast of New Orleans. BP

Exploration held an interest in the

project. A short time later a second

deepwater discovery was announced

by Exxon and its project partner

Conoco.

1992 -- Oklahoma adopts a natural

gas proration statute. Louisiana holds

public hearings on the issue, but does

not adopt any statute or regulations

1993 -- The Louisiana Legislature,

with the support of the Louisiana oil

and gas industry, adopts legislation

aimed at addressing the issue of

orphaned or abandoned wells. The

legislation established a fee on all oil

and gas produced in the state and

provided for a method of establishing

voluntary trust funds for each well

that would follow the well each time

it is sold and be available to cover

the cost of properly closing and

abandoning the well when it was no

longer productive.

1993 -- The Louisiana Mid-Continent

Oil and Gas Association conducts the

first of its kind study regarding the

economic impacts of the offshore oil

and gas industry. The study Impacts

showed that the offshore industry

has a positive economic impact on

the state of more than $3 billion each

year.

1996 -- After more than a decade

of depressed prices and activity, the

oil and gas industry began to see a

rebound. New drilling activity in the

Gulf of Mexico spurred on by the

development of new technology and

the overall worldwide demand for oil

gave a new push to Louisiana oil and

gas production.

1997 -- Record-breaking lease sale in

the Gulf of Mexico. Nearly $1 billion

exposed as bids by companies seeking

to drill in the Gulf of Mexico, proving

that the Gulf of Mexico is not a “dead

sea.”

1997 -- Louisiana prepares to celebrate

the 50th anniversary of offshore oil

and gas exploration and production.

The Louisiana Mid-Continent Oil and

Gas Association celebrates its 75th

anniversary as a trade association

and pays tribute to the industry’s

“Remarkable Past and its Exciting

Future.”

1998 -- A new round of mergers

began. BP purchased Amoco, Kerr-

McGee purchased Oryx. Exxon

and Mobil agreed to a merger that

formed the largest company in the

United States. Other companies

combined downstream operations.

New rounds of employee layoffs and

consolidations also began.

2001 -- Louisiana celebrates the 100th

anniversary of the oil industry in the

state.

2007 -- For the first time, 15 rigs are

drilling for oil and gas in 5,000 feet

of water or greater in the Gulf, the

U.S. Minerals Management Service

announces. “The continued increase

in drilling activity is a show of

confidence in the resource potential

of the Gulf’s ultra-deepwater frontier,”

agency Director Randall Luthi says.

96 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 97


The issues

Briggs spoke to the IRJ about the issues in Louisiana, and gave

us a rundown of LOGA’s goals for the next year or so. “One of

the biggest issues that we have in Louisiana, and it filters through

into the oil and gas industry, is the litigious system” he explained.

Louisiana has the unfortunate problem of “legacy lawsuits” where

the industry has to deal with legal problems and lawsuits stemming

back “all the way to the early 1900s” according to Briggs. This

impedes progress in the Louisiana oil industry – forcing companies

to deal with old problems in a new business landscape.

There is a lot of home cooking in our courts in Louisiana. It’s

unfortunate. But because of that doing business here is something

that a lot of oil men won’t do any longer: we still have a legal

climate that hinders companies, scares them off. Oil executives

will come to me and say ‘I’ve got eight lawsuits against me – I

wouldn’t drill another well in Louisiana if my life depended on it’.

That’s the problem: you live in Louisiana and you pay high.”

On top of the legal roadblocks, there comes the issue of oil

prices. When prices go up, drills should be drilled – but if there

are legal issues, the resource isn’t taken advantage of when it

should.

Briggs says that in north Louisiana, there is an oil boom,

but in the south, Louisiana is experiencing unprecedented lows.

There is a migration away from conventional drilling wells in this

industry. This is part of the lows in the south – conventional drilling

deals or projects are high risk because of geological structures” he

explains. “In the north the sands and shells are laid on top of each

other like blankets – so your risk is minimal – costly, but minimal.”

However, Louisiana Governer Jindal’s administration is well aware

of the value of the oil and gas industry in Louisiana, which is seen

as a huge plus

for businesses

focused on oil.

The permitting

system has also

been improved.

In addition, state

representatives

are starting

to see how

important the

industry is to

creating jobs.

Rig Count Latest Week

Date: August 14 2009

Alaska 9

California 20

Colorado 44

Louisiana 136

New Mexico 42

Oklahoma 76

Texas 355

Wyoming 35

Total USA 968

The industry’s importance to the state

“Every time you drill you create jobs: 180-200 people are directly

employed for every rig dilled. That is a direct impact in the

workforce” Briggs reasons.

Although the state is doing its share to develop incentives for

development, things are still tough – as Briggs puts it: “you can’t

do much about oil prices”. He adds that companies in the state are

holding off laying staff until things level out. One thing is certain

– LOGA is there for its members and has an open communication

network that has helped tremendously in tough times. “We have

a tremendous network of oil facilities. Louisiana is up at the top in

the industry with Texas and Oklahoma – new companies coming

into Louisiana can come in and do very well” Briggs insists.

“Overall, although we do have our issues, we have a

very friendly environment to do usiness.” For more information

about LOGA, visit www.loga.la. q

Rig Count Worldwide

Date: July 2009

Latin America 351

Canada 175

Europe 73

Africa 57

Middle East 249

Far East 244

Total 1149

98 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 99


HOW HIGHLAND HELICOPTERS CONTINUES TO BUILD ON

50 SUCCESSFUL YEARS

April O’Brien has been working for Highland Helicopters

since 1990. The family owned company has been

servicing the Alberta, British Columbia and Northwest

Territories’ airways with its fleet of 43 light and intermediate

turbine helicopters since the company began back in 1959.

“Highland Helicopters is a bit of a rarity” O’Brien says

fondly.

“With steady input from the owners and Highlands

team of managers, Terry Jones, Operations Manager, Dan

Kolshuk, Director of Maintenance and myself, Highland

has been and continues to be a vibrant, forward looking

company. The diverse backgrounds of the people at Highland

serve the company well giving it years of experience in the

field as well as in maintenance and education.”

100 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 101


O’Brien began working in administration at Highland

then worked her way up to Accounting Manager and

on to a position on their board of directors. Staying

power is a trend at Highland, where understanding

the working requirements of their staff is a paramount

concern.

The people and the projects

O’Brien goes on to discuss the ways in which Highland

Helicopters manages the needs and expectations of

their personnel.

``We have also wanted to commit to the

communities we operate in and offer a stable work

environment for our staff. Quite a lot of the helicopter

industry work relies on pilots and engineers working

in remote camps for extended periods of time. This

type of work gets less attractive to employees who

have families so we wanted to develop a company that

could cultivate long term staff and support our clients

operating in the smaller communities of western

Canada” she says.

“This approach has resulted in Highland being able

to retain long term highly experienced employees who

are better able to support our clients. We repeatedly

win work based on our staff’s local knowledge of the

area and long term working relationships with our

clients. We know that it is important to clients to feel

comfortable with their pilot and that they want the

same pilot or pilots each time they fly with us.”

This supportive structure certainly comes in

handy when closer inspection reveals the diverse

range of projects and places the company works in.

“Highland’s work and responsibilities are very diverse

from Caribou Capture work in the Arctic, to Avalanche

patrols in the Rockies, to supporting our resource

based clients” O’Brien explains.

“We take a long term approach in the places

we fly such as Inuvik, Northwest Territories and Fort

McMurray, Alberta. We entered both of these markets

early as we anticipated that the oil and gas market

would grow with the inevitability of deposits in these

areas becoming viable. This has most certainly been

the case in Fort McMurray but yet remains to be seen

in Inuvik. In Inuvik there have been numerous delays

in getting the Mackenzie Pipeline approved which has

slowed our growth in this market. However this slow

down has allowed us to gain experience in wildlife and

other environmental work. It has also been a great

learning experience on conducting business in the

Northwest Territories.”

O’Brien also notes how thrilled the company

is by their partnership with Kurt Wainman, owner

of Northwest Industries Limited, which has allowed

Highland to develop the area “into a permanent

base.”

Tackling troubling times

O’Brien is refreshingly honest and remains optimistic

about the challenges facing the helicopter industry,

starting with Canada’s abundance of the aircraft

themselves and the way in which the economic

downturn has exacerbated this.

“Competition is fierce” she says.

“This is compounded with the overall slowdown of the

102 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 103


make our operations much more efficient moving

forward. We have just completed a major SAP Business

One installation which we know will make us better

able to manage and analyze our finances in the not

too distant future” O’Brien says.

“We have also been looking at the makeup of our

fleet to see if there are any opportunities to capitalize

on. At the moment we are holding steady on this front.

Currently our client base is looking for cost savings and

continued focus on delivering services safely which

fits together with Highlands’s philosophy. To date we

have not had to lay off any employees as many of our

competitors have. We view staff and their long service

as a crucial part of Highland and something we are

very proud of.”

Flying on forward

O’Brien explains that the economic situation has not

deterred Highland from its short or long term goals.

“We have (always) been a company that employs

a long-term approach to our growth and evolution”

she says.

“Our short-term goal at this point is very easy;

make sure we are positioned to come out of this

economic slowdown a better organization. The

slowdown is forcing us is to review all aspects of how

we work and how to most effectively invest for today

and tomorrow.”

Highland is also developing and building upon

their online pilot training program; another piece of

the supportive and encouraging work environment

economy and has resulted in considerable downward

pressure on rates which can lead to unhealthy

practices. At Highland during these tough economic

times we have not deviated from our high standards

and continue to improve upon our safety, training and

maintenance practices.”

However if you thought that Highland was merely

waiting out the economic storm, that is far from the

case.

“We are using this downturn in the economy to

better position ourselves when the economy returns

to strength. We have invested in technology that will

FLY BELL




w w w . b e l l h e l i c o p t e r . c o m

104 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 105


“Currently our client base is looking

for cost savings and continued focus

on delivering services safely which fits

together with Highlands’s philosophy.”

the company cultivates. Their Abbotsford, British

Columbia training school has been extremely

successful.

“This has led our company to start to do advance

training on pilots from other companies. We have

just started advertising and believe we offer great

training at a great price” O’Brien says.

“We also have a phenomenal crew of engineers

who keep our fleet of aircraft extremely well

maintained.” This is where their long-term goal

begins. O’Brien explains that pilot and engineer

positions can be “extremely hard to fill” and true to

form Highland plan to introduce programs that will

develop those roles and “go beyond industry and

Transport Canada training standards.”

“Highland Helicopters is proud of being a

forward looking company that has been able to

respond to opportunities that have lead to growth.

Improving our excellent safety record is always

an important goal. We believe with a stable highly

trained workforce, well maintained machines and a

high degree of focus we offer a good product which

enables us to have first class customer service”

O’Brien says.

“I would like to think this spirit of capitalizing

on opportunities will continue and that there will be

bright future in the evolution of Highland.”

Not only is Highland creating a bright future for

their workers, partners and company as a whole, but

a promising step forward for the industry too. q

106 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 107


By Pat Concessi, Deloitte

As governments prepare for the United Nations

Framework Convention on Climate Change in

Copenhagen this December, attention is concentrated

squarely on both global and national carbon policies. Cap

and trade schemes feature prominently in these policies,

with significant impacts for business. While enormous

regulatory uncertainty remains – perhaps as much as there

has ever been – it now seems likely that this uncertainty will

resolve itself in the coming months. As such, companies

should be focused on developing carbon management

capabilities and getting ready to comply with regulation.

Inside the nutshell

Simply stated, carbon management capabilities will enable

companies to comply with regulatory requirements in a cost

effective manner, while managing carbon related risk. The

wider business implications are numerous and complex.

Businesses that are significant emitters of greenhouse gas

(GHG) can expect substantial incremental costs in regulated

108 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 109


carbon

markets as

well as the

need to factor

the price of carbon

into their overall

business strategies.

There will be new risks,

including price risk, credit risk,

operational risk and regulatory

risk. A risk management

approach should, therefore,

be adopted for developing the

compliance strategy. The accounting

and tax implications of compliance

options also need to be considered.

In particular, a structured approach

to risk identification should be

considered so that significant

risks are managed

appropriately.

Along with fundamental reporting, pending

legislation will mandate emissions reductions over

time. For many businesses, these cannot be met only

through internal emissions abatement. Developing a

compliance strategy will require a solid understanding

of carbon markets and their risks and opportunities.

Contracting and capital allocation decisions will

be impacted by the price of carbon and the fact

that carbon as a new commodity will impel some

organizations to develop a hedge strategy.

Governance and organizational design will

need to incorporate the requirements of carbon

markets. For those companies already in the process

of designing infrastructure and selecting IT systems

for GHG monitoring, involvement of their CFOs and

controllers is a must to ensure that internal control

and data integrity issues can be addressed. High

emitting companies in particular should act now to

put their governance in place. Many companies, for

instance, have “working groups” addressing carbon;

actions (such as buying offsets) are carried out on

a “pilot study” basis. Roles and responsibilities for

carbon management need to be both determined

and included in job descriptions. Board and senior

management roles in oversight need to be defined and

documented in risk management policies. Business

processes, related to GHG monitoring and reporting,

as well as transacting allowances and offset credits,

need to be documented.

Furthermore, regulatory uncertainty may

warrant a scenario planning approach to estimate

potential exposure and potentially granted allowances.

The questions are many, but there are indeed

answers, and those answers will not only clarify but

multiply as regulations become law. In the meantime,

businesses should begin with the following elements

as they prepare to build a viable carbon management

strategy:

1. Identify compliance requirements, looking at

options for developing a compliance portfolio

2. Meet reporting requirements by translating raw

inventory into appropriate measures and reports

3. Design appropriate governance and organization

structures specifically to deal with carbon

management

4. Assess the relative impact of carbon legislation on

corporate strategy

5. Identify and address any issues of accounting and

tax related to carbon markets

The sooner you begin, the better prepared you will

be when the deadlines come – and the cheaper it

will be to meet the requirements. Five years ago,

there was no carbon market. Today that market is

valued at $100 billion and is projected to reach $1

trillion by 2020. Carbon is set to potentially become

the most widely traded commodity in the world.

Unfortunately, uncertainties abound, mainly

surrounding the specifics of regulations which are still

in the early stages of their articulation. The nuances

remain largely speculative, absent the hard legal

requirements of passed legislation and regulation.

And where regulations requiring reporting already

exist, the supporting infrastructure may need to

change: carbon regulation creates a financial liability

on GHG emissions; carbon data will therefore need

to meet the standards of financial data.

So, the big picture is clear: companies are

facing ever stricter climate change compliance and

reporting measures in both the near- and longterm.

And they need to address it sooner rather

than later. Companies that wait for regulation to

be in place may end up paying a higher price for

compliance.

Pat Concessi is Deloitte’s Global Carbon Markets

Leader and a partner in its Canadian Enterprise

Risk Services (ERS) practice. She can be reached at

pconcessi@deloitte.ca. q

110 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 111


Fairwinds International is a Louisiana-based ‘fullservice

company specializing in engineering, project

management, consulting, and inspection services to the

offshore and onshore oil and gas industry for all aspects of

the assigned project.’

Bill Napier, Fairwinds’ founding President and CEO,

has spent 15 years building the company from its inception

in 1994, into the “one-stop shop” it is today.

“I was a one-man consultancy working in somebody

else’s office until about eight years ago when some of my

customers told me to get out of my office at my house

which we did. By the grace of God many good things have

happened and our company has continued to grow” he

says. “We market ourselves primarily to the oil and gas

companies that do not have enough staff to do a project

or is just simply overloaded. We will go and be their

engineering and construction management department on

an as-needs basis. So what we offer is really a one stop shop

where we’ll do the purchasing, the permitting, engineering

(all disciplines), construction project management,

commissioning and inspection. Primarily what we do is oil

and gas structures, pipelines, and facilities.”

Fairwinds International is also startlingly diverse.

In fact, the night before Napier sat down with IRJ, the

company completed a very unique and exciting project.

Platform Removal in the Gulf of Mexico

“Last night we just came off a really great job” Napier

enthuses.

Of course we simply had to hear more about it.

“In the U.S Gulf of Mexico right now, the removal of old

platforms is turning into a big part of the market for

112 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 113


everybody. About 25 years ago one of our customers

took an old drilling rig, put it in 75 feet of water and

turned it into a production facility. Due to storm

damage it had to be removed but the problem with it

was that nothing worked on it anymore from a jacking

point of view, it could not float, or from any point of

view. We had to redo the jacking system, put it on

a barge and bring it to shore. It’s just about to dock

right now actually. What makes it much more difficult

is that we had to put the biggest barge we could fit

underneath the drilling rig to get it out. The weight

was pushing the limit of the barge. Another problem

was that most of the weight was on one side which

created all sorts of issues” he says.

Then the other issue we uncovered a couple

of days ago was that it weighed way more than the

documentation said and that caused a tremendous

amount of problems due to the transportation barge

size. But we were very fortunate with the team of

people working on this and we got together to figure

out what to do, adjusted our program accordingly –

almost daily depending on when we found out new

information – and we succeeded. We ended up cutting

off 300 tons from the vessel to make it light enough

to get on the barge. This was done in 48 hours. Our

big concern was that there were three oncoming

tropical storms. Had they hit our site we would have

had a disaster. The customer is thrilled, the marine

surveyor is thrilled and some very dramatic pictures

are coming out of this.”

“We’re a diverse, willing

company and we’re big

enough to do any project

that is presented to us but

we’re still small enough that

each customer and project is

important to us.”

Napier explains that while this project is “a very

different sort of job, very unique and not something

that every company does” it is also “a problem that as

the oil and gas field gets older, people will be facing

more and more.” This forward-thinking outlook is

central to the diverse, flexible and all-round service

114 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 115


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that Fairwinds International offers today.

Offering every “piece of the pie”

Napier explains that while this project makes for exciting

reading, it is not typical of the “bread and butter work”

that Fairwinds International tends to do. “Normally a lot

of what we do comes after a customer goes and drills a

well. We do what I call field development studies. We’ll

tell them their production options, for example whether

to take it to another platform or build their own. We tell

them what their capital expenses, operating expenses,

and transportation costs of the product will be. We look

at the options for the distribution pipelines for the oil

and gas along with the associated costs. These are really

our bread and butter projects” he says.

However common or uncommon a project may

be, Fairwinds still pip many of their competitors to the

post by offering the full-package to their customers.

“Most of our competitors only want us to provide

a part of the pie, for example they only want to be an

engineering company or they are only want to be a

project management company. The advantage that we

bring is that we’re capable of taking the entire project

on which is fabulous for a client because they only have

one company that they need to interface with” Napier

explains.

“We may partner with other companies on a

project basis and we partner well with others. That is

the attraction that the oil and gas companies have to

us.”

The future of Fairwinds International

Napier explains that the company is thriving and

continues to offer this unbeatable comprehensive

service to their clients, but they will happily take on

parts of projects large or small too.

“We’re doing work for a major oil and gas

company right now but all they want is help on a

certain part of the project whereas the independent

oil and gas companies want the entire project done by

somebody else and that’s our advantage. We have on

our staff a lot of people from the oil and gas industry

who understand the full range of oil and gas projects;

who understand drilling, who understand reservoir

engineering etc. so the value-added that we bring to

the client is as a group of people with strong industry

experience throughout the entire cycle of the project

and that’s what they like about us” he says.

“We’re a diverse, willing company and we’re

big enough to do any project that is presented to us

but we’re still small enough that each customer and

project is important to us.” Fairwinds has been named

to the INC 5000 list for the fastest growing private U.S.

firms for three consecutive years, 2007-2009.

At Fairwinds International the results speak for

themselves. This focused, adaptable, diverse and

experienced company is set to continue providing

excellent service in everything they do. Their mission

“to be the standard of excellence against which all

others shall be compared” looks well within their

reach. q

116 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 117


In its five year existence Silver Wheaton Corporation has become the largest silver streaming

company in the world. ‘Forecast 2009 sales are 16 to 18 million ounces of silver and 17,000 ounces

of gold, for total sales of 17 to 19 million silver equivalent ounces, growing to approximately 30 million

ounces of silver and 20,000 ounces of gold, for total sales of approximately 31 million silver equivalent

ounces, by 2013’ their website reveals.

Steve Barnes, Silver Wheaton’s President and CEO, joined Wheaton River Resources as Chief

Financial Officer eight years ago when Silver Wheaton had not yet been created.

“At the time they were a one asset mining company with a market value of about $250 million

dollars and that was the most exciting time of my life until recently. In less than four years we have

made several significant acquisitions. We’ve merged with Gold Corp and we’ve risen to a $14 billion

dollar market value; one of the best growth stories ever in the history of mining I think” he says.

“It was during that time that we created Silver Wheaton as a new business model, not just in

mining but anywhere. We created it not trying to become the largest silver company, but simply in

trying to create value for Gold Corp/Wheaton River Gold Corp shareholders and it worked out very

well. What we did when we created Silver Wheaton is we took our silver by-product and put it into

Silver Wheaton. We had paid about $50 million dollars for that about 10 years ago and Gold Corp have

now sold all of their shares in that and got about $1.8 billion so it was an amazing deal for them.”

118 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 119


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global metals companies and like mining Silver sector, Wheaton we help pursue ambitious

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Silver Wheaton’s astonishing growth

Barnes recalls the first couple of years when Silver

Wheaton had no full-time employees. Wheaton

was not looking to grow this new model and

instead ran it part-time alongside their Gold Corp

senior positions.

“A couple of deals came to us because they

liked the model and about three and a half years

ago now I said to Ian Telfer (Director) “Ian we had

better put a full-time team in here, I think that this

company could really do something” so it went

from almost being a passive value creation model

to “let’s try and build

something significant

here” and I think that we

have accomplished that.

Over the last three years

we’ve put a full-time

team in place and we’ve

had what I think is some

of the best growth in the

industry for that time

period” Barnes says.

“We started the

company five years ago

and now we have 12 long

sale agreements covering

11 operating mines

and four development

projects.”

Barnes says that over 60 per cent of Silver

Wheaton’s revenue for this year will come from

just three mines; the Luismin mine in Mexico,

owned by Gold Corp, the Yauliyacu mine in Peru,

owned by Glencore International AG (the largest

base metal trading company in the world) and

the Zinkgruvan mine in Sweden, owned by Lundin

Mining.

The amazing thing is that each of those

mines is a true world-class asset and each has been

going for over 100 years continuously and they’re


still all amongst the lowest cost mines in the world

in their particular industries and they’ll all still be

going 50 years from now so they really are amazing

assets to have as our foundations” Barnes says.

But Silver Wheaton’s new cornerstone asset

is yet to come.

Silver Wheaton and the Peñasquito mine

Gold Corp’s Peñasquito is a polymetallic deposit in

Mexico. Barnes explains that it is Silver Wheaton’s

new cornerstone asset and it is Gold Corp’s

cornerstone asset too.

They’re going to get

as much value out of it

as they can which is good

for us. The silver portion

alone at Peñasquito is the

largest silver deposit in the

world already” he says.

The mine is only just

starting to come into

operation now and that’s

going to drive huge growth

for us over the next five

years. Compared with

2008 we’re predicting that

our sales should almost

triple over the next five

years and it’s primarily

due to Peñasquito coming on stream.”

Barnes explains that the global economic

downturn does not necessarily spell difficulty for

Silver Wheaton.

“One of the unique things about silver is that

over half of the silver that’s produced in the world

isn’t from silver mines, it’s from lead zinc copper

mines. A lot of the companies mining lead zinc

copper nowadays have a lot less cash flow and a lot

smaller market value than they had a year ago/two

years ago and yet they still have a lot of significant

debt on their books which they’re trying to deal

122 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 123


with which I think gives us a great opportunity in

the next six, 12, 18 months to give one of them

some cash upfront so that they can use that to

pay down debts or make an acquisition, whatever

they want to do, and we can get some of their

silver by product from some very high quality

mines” he says.

“We’re seeing more opportunities now than

we’ve ever seen and some very good ones. Again

our focus is not on quantity of deals, it’s on quality

and we see some good

ones out there.”

Silver Wheaton: the

next step

“We have delivered

on growth, we did a

deal in May where

we took out the only

other silver streaming

company in the world

which gave us a

significant increase in

current production and

current cash flow and

it was very agreeable

for our shareholders.

Our real focus right

now is adding another cornerstone asset to Silver

Wheaton” Barnes says.

In fact, he explains that there are three key

factors in the future plans at Silver Wheaton.

“One is silver prices. We have some of the

best leverage to silver prices of any company. My

personal belief is that silver prices are going to

increase very significantly over the next few years.

We’re not building the company on saying that is

going to happen, but when it does we do tend to

outperform any other silver company in a rising

price environment” he says.

“Secondly in terms of delivering growth,

Peñasquito coming on stream is our core effort and

Gold Corp’s core effort. Even if silver prices stay

where they are it should result in an almost tripling

of sales and almost tripling of cash flows over the

next few years if we do no more acquisitions.”

His third factor is the potential for Silver

Wheaton to find that next cornerstone asset.

“I think we’re seeing more good opportunities

than we’ve ever seen to not just grow the company

but I think that we can continue to transform

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Cassels Brock also ranked among the country’s top firms for: US Announced

M&A deals, as counsel to Principals; Canadian equity offerings, as issuer

advisers; Canadian equity offerings – IPO, as manager advisers; and Canadian

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it. Again an ideal situation is to add another

cornerstone asset or two to our portfolio which

will continue to transform the company and add

significant shareholder values. I think we can

deliver on that over the next six, 12 months.”

Raising shareholder value is a commitment

Barnes holds very strongly. Silver Wheaton has

grown, developed and surpassed all competitors

at an incredible rate and shows no signs of slowing.

This market adaptable, asset-rich and forwardfocused

company has accomplished everything it

has set out to do to date and looks certain to carry

on strong. q

www.casselsbrock.com

© 2009 Cassels Brock & Blackwell LLP. Cassels Brock and the CB logo are registered trade-marks of Cassels Brock & Blackwell LLP. All rights reserved.

ResourceJournal_MBennett_0909_resized.indd 1

8/26/2009 5:11:10 PM

124 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 125



We supply every service that an operating mine

provides. The only difference between us and an

operating mine is that we don’t own the resource”

Allan Flemming, President and COO of KMC Mining

says.

“We do all of the preparation work, removing

of the reclamation materials, we do the overburden

removal, we build roads, we build containment dykes

and do reclamation afterwards, we have hauled

ore for the companies but generally the producers

want to handle the ore themselves, still we’ve done

that on many occasions as well. So we really do all

the functions of an operating mine prior to the ore

being processed.”

But not only does this 60-year old mining

company hailing from Saskatchewan and Alberta

meet the individual needs of each and every

increasingly diverse customer they partner with,

it continues to grow and accomplish each task to

excellent safety standards too.

IRJ caught up with Flemming and Mark Ryan,

KMC Mining’s Business Development Manager, to

talk about how the company has continued on with

their growth strategy, kept employee training and

safety a top priority, and competed with the ‘major

players’ in the increasingly competitive oil sands

industry.

Current projects and continued growth

KMC Mining has performed work on all surface oil

sands operations in its 36 year history in the oil sands

sector of northeastern Alberta and is currently in

operating mode on two clients’ sites, both situated

near Fort McMurray, Alberta.

These sites are base operations and we’ve

been there for a number of years so it’s really

126 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 127


Deep roots, rich history

Congratulations, KMC Mining, on

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recurring work for those two customers; overburden

removal, road construction, those are the focuses for

those two projects” Flemming explains.

The third site that we are operating on is

Imperial Oil’s Kearl Oil Sands Project which is a new

oil sands development located northeast of Fort

McMurray. We are in a joint venture arrangement (K2

Mining) there and we are doing the site development

program at Kearl. That involves the initial clearing,

grading for facilities, initial road construction, initial

pit development and starter dyke construction.

It’s certainly a flagship project within the oil sands

because it’s the only new project since the economic

downturn.”

The unpredictable global economic climate has

not prevented KMC from sticking to their growth

strategy, as Ryan explains that the impact of this

worldwide issue does not impact directly upon the

work KMC undertake within the oil sands industry.

“As Al stated previously, our two existing major

customers are operating and with oil sands mines

they typically don’t slow down when the economy

slows down. Their economics are based around the

last barrel being the cheapest barrel they produce and

128 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 129


the more that they produce, the better their overall

results become so through the economic downturn

we weren’t slowed down at all” he says.

“We continued through our growth strategy as

we had laid out and saw a continued growth between

our fiscal 2008 results and our fiscal 2009 results.”

Flemming highlights the people power behind

their continued success.

“Our short term goal is to continue our growth

plan. We’ve been growing at a fairly high rate over the

last three years – 150 per cent in two years – and we

see that trend continuing on. We just need to make

sure that it’s a measured growth and that we have

the people infrastructure to support that growth and

maintain returns” he says.

“We also want to continue to diversify our

client base and the Kearl project has certainly been a

milestone in that strategy.”

KMC’s exemplary safety standards

Flemming and Ryan place great emphasis on KMC’s

need to attract the best employees in order to support

their growth strategy, plans for diversification and

constant commitment to “provide valuable service to

our customers”.

“We compete with the major oil firms in terms

of labour workforce so we have to provide something

different to attract them to KMC. We think that it’s

the innovation we provide, the ‘do it right’ attitude

of ourselves as a contractor. We have to do it right,

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130 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 131


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we have to do it efficiently and we have to do it

productively and that’s how we compete on the

labour market” Flemming says.

“When an employee comes to work for KMC we

spend a lot of time training them and making sure

that they are ready to work in the field. With the

employment growth rate that we’ve had there have

been a lot of new employees here who have very

little experience and we’ve had to train them from

day one. To do this we put them through a training

process which consists of some

computer-based training as

well as in a ride-along mode

in the haul trucks to learn the

operation. Then as they get

more comfortable they begin

to operate the equipment

with a trainer in the jump seat

as they progress. They aren’t

released to work for themselves until the trainer

certifies them that they are well trained with some

real life experience before they start.”

Ryan goes on to explain that this nurturing

environment is somewhat of a KMC tradition with

many of their higher level supervisors “having come

up through the ranks here at KMC.”

They started off as operators and have moved

from there into more supervisory roles. They have

been where the new operators are today and can

really understand the growing pains that they’re

going through.”

“Our short term goal is to continue

our growth plan. We’ve been

growing at a fairly high rate over

the last three years – 150 per cent

in two years – and we see that trend

continuing on.”

Safety and Growth Focus in Demanding

Marketplace

Perhaps the most impressive aspect of KMC’s focuses

on growth and safety is their achievement in these

respective areas amidst the ever-demanding oil sands

marketplace.

“We’ve achieved that safety performance

while the company has continued to grow in a very

demanding market place. The

oil sands industry has been a

very competitive marketplace

over the past couple of years

and we have had to compete

with the big players for

resources, for qualified people,

for systems and equipment

and we’ve achieved that safety

performance in this very difficult environment. I think

that is testament to our goal, our corporate vision

which is to do it right and do it safely” Flemming

explains.

If KMC’s recent track record is anything to go

by, this company is set to enjoy another very exciting

year as they continue to deliver excellent services to

their customers, thrive in this demanding industry,

support and safeguard their staff and move forwards

with their strategic growth plan. www.kmcmining.

com. q

132 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 133


Marcotte Mining Machinery Inc., of

Sudbury, Ontario, has enjoyed 30 years

of continuous operation since its inception in

1979. It is part of engineering product solutions

company The Timberland Group and has

become a tried and tested supplier of mining

equipment and a successful piece of the parent

group’s overall equation.

“We’re continuously working on

improving equipment and keeping up with

technology and working on different types

of projects that go on within mining. There

are many different types of mines so we do

everything whether that means making smaller

equipment or bigger equipment” Marcotte’s

General Manager Denis Rienguette says.

“New development is obviously an

ongoing project. We try to get that extra niche

in the market to step ahead of our competitors.”

IRJ spoke with Rienguette about Marcotte’s

services today and the company’s tactics to

tackle the economic downturn in the coming

months.

Shifting focus to safety

Rienguette entered the mining machinery

industry in 1988.

“I came from the transport industry and

mining was a higher wage paying industry

which was growing consistently every year so

134 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 135


it was very attractive in the market” he says.

This lucrative era sparked growth and

development for this already diverse industry,

something which Rienguette says is ongoing today.

“We have so many different mining companies

that we deal with so it’s a constant shift in how you

go about servicing a customer because they’re all

different operations. You go from gold mines which

is very small narrow vein type of mining so you’re

always developing something which can fit with what

they want to do and that changes on a regular basis.

Then take uranium mining; you have different rules

all over again, you have potash, you have all different

nickel kinds of mining” he says.

“We have production and non-production

equipment. Some equipment is just to support the

front line and we also have equipment which works

directly in the front line of the mine too, so it’s for the

guys that go in and load explosives and that level. We

have equipment that they use to do that. When you

drill, blast, and extract the ore, that’s the front line.

We have other equipment for piping and ventilation

and those things” he summarizes.

“We have equipment to haul material, to load

explosives, fuel trucks to go round and service the

equipment too.”

136 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 137


Rienguette explains that Marcotte’s rigorous

manufacturing, testing and development work spans

a large range of mining machinery units. Each of these

has to match up to demanding safety regulations

which continue to evolve today.

The biggest change has been safety of the

equipment. Safety seems to be number one now

with all of our customers. At one time the thought

was that the most important thing coming out of the

mine everyday was the minerals and now it’s not,

it’s the worker. Everybody seems to push for safety

now when we’re selling machinery so it has to meet

all of the regulations and standards and it’s actually

scrutinized very closely now” he says.

The actual testing is scrutinized and

documented so we’ll do a mobile test on an external

ramp that meets the same degrees as underground

and that involves very rigorous ramp testing. You

actually beat the machine up to make sure of its

performance and to make sure that it’s going to be

safe for a long time underground.”

Rienguette says the ergonomics of Marcotte’s

products are of greater concern now than ever.

“People are in the seat of that machine for a

long period of time. One concern is how they get in

and out of the machine. We went from “yes, maybe

put a handle there” to “no, if it doesn’t have handles

and steps all at the right heights and locations, it’s not

coming out” and that’s all part of the regulations.”

But Marcotte does not stop there. In keeping

with its flexible and forward-thinking work ethic,

the company will do whatever it takes to give the

customer what they want.

“It’s basically our ability to change quickly right

down to changing the design of our equipment. Lots

of customers want entirely different things and where

other companies might say “this won’t sell” we don’t

because we’re a custom company and we’ll customize

a machine any time, it’s always been our philosophy”

Rienguette says.

“If the customer wants a set of changes which are

not part of the regular design, it’s never an issue.”

In fact the strong business relationship cultivated by

Marcotte and their tireless efforts to deliver exactly

what their customer desires has been a key factor

138 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 139


as they make plans to tackle these tough financial

times.

Marcotte and tomorrow’s market

Rienguette says that the global economic crisis has

not impacted very heavily upon the company yet.

The market has been terrible but we have lots

of backorders so we only really started seeing it two

months or so ago. It’s the lack of new bookings that’s

going to affect the balances over the year. Like a lot of

people we’ve gone ahead and made some stock units

because we know this is a yoyo market so it’s up and

down and right now it’s back up but the customers are

reluctant to spend money because they are unsure

how long it’s going to stay up” he explains.

“2010 is somewhat discussed in the market and

with the customers that we deal with on the corporate

level as being the year things come back to normal,

although we’re not sure what that definition is going

to be just yet. The boom in 2011 should be back to

the high that we were at because of the demand on

the market.” With these optimistic industry rumblings

and a 30 year strong record of excellence, Marcotte is

sticking to its plans for the coming months and years.

“We’re holding our own” Rienguette says.

“Our long term goal is to double our business in

the next five years, that’s part of our corporate strategy.

We’re only one company out of five in our group and

because we’re looking at doubling that in the next

five years, each company has to pull their socks up;

acquisitions and changing our market strategy.”

If Marcotte Mining Machinery Inc.’s track record

is anything to go by, this goal appears to be well within

the company’s reach. q

140 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 141


David G Netherway

David Netherway, Chairman of Shield Mining Limited, an ASX listed,

Africa-based gold and precious metals explorer, has seen and done

a great deal in his time.

He has worked in Ghana for Ghana National Manganese, headedup

Australian-listed Golden Shamrock with whom he set up the Siguiri

Gold mines also in Ghana, created his own company Prospects Mining; a

Vancouver junior which he later sold to Semafo, built the Kiniero Gold mine

in Guinea with Semafo, taken on Afcan Mining and started the Tanjianshan

project in China, saw through the deal in which Eldorado Mining took over

Afcan in 2005, then started Shield Mining in 2006.

IRJ spoke with Netherway about Shield Mining’s exciting new drilling

campaign and the breaking news in his other companies too.

Shield Mining: History

“Shield is a spin-out from Sphere Investments who hold the major iron

ore license and have a bankable feasibility study on an iron project in

Mauritania. They really wanted to concentrate on the iron ore at that time

and decided to spin-out their other assets which were gold and base metal

holdings licenses in Mauritania. So we put them into an Australian vehicle

and listed them on the Australian stock exchange and I took that on as

CEO” Netherway explains.

“We had about four million dollars in the bank at that stage so we

started exploring. We’re way up the north of Mauritania and it’s very difficult

exploration; three days drive across the desert to get there, fly camping,

not easy. So we did that for about two years then decided after about 18

months that this wasn’t going to make it. There was gold in the system but

it just wasn’t sufficient to make an economic resource. Luckily we were

then granted two licenses which we had applied for a couple of years

before that and they were the Tijirit license and the Akjoujt license.”

142 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 143


The Tijirit mine is the prospective of these licenses

and Shield went to work on that first.

“It’s 35 KM from the Tasiast gold mine which is

owned by Red Back Mining and that’s producing 230

ounces of gold a year at the moment. With our work

there over the last 15 months or so we’ve proved

that there is gold in the system. We do have a Tasiast

lookalike and we’re very excited” Netherway says.

“So based on a small drilling program of 3,000

metres which we did in April we’ve done a rights

issue in June/July which we closed earlier this month,

very successfully oversubscribed and we raised $2.5

million Australian dollars so that we can go forward

and do the next drilling program on this project.”

Shield also has a small copper deposit in the southern

region of Mauritiana.

The geophysical anomaly we have on that is

parallel and about 100 metres offset to BHP‘s drilling

that they carried out there where they got significant

copper over 12 metres. We are hoping that this will be

an exciting project too, but we’re not concentrating

on that, we’re concentrating on the gold project at

Tijirit from Shield’s point of view.”

The Tijirit Drilling Campaign

Netherway speaks excitedly of recent developments

regarding their planned drilling campaign for Tijirit.

“We planned to do between 10,000 and 15,000

metres of drilling within the next 12 months on the

Tijirit project. We drilled three of the current six

prospects which we have in the first drilling campaign

just to give us an idea of what’s going on so obviously

we’re going to drill the other three prospects” he

says.

“We’re going to go deeper and along strike on

the three prospects that we’ve already drilled and

we’re going to do more mineral work in the area to

make sure that we haven’t missed anything else. It’s

a great project and the geology is exactly the same as

Tasiast. We want to make sure that this drilling really

gives us something to get our teeth in to as a resource

by the end of the next 12 months.”

Pointing out that “the best place to look for a

gold mine is close to another one” Netherway explains

that the geographical indication they can gain from

the nearby Tasiast mine is extremely encouraging for

Tijirit.

“All of the geology here is associated with the

banded iron formations exactly as it is at Tasiast

and really we’re just exploring those banded iron

formations” he says.

“We’ve got about 30 KM of strike length to do

this and there is a lot of that which we haven’t looked

at so we’ve got a lot of work to do and we’ve got

some very nice prospects there which we just hope

will turn into ore bodies.”

Netherway’s other news

In addition to Shield Mining, Netherway is involved in

a number of other exciting projects today.

144 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 145


The first of these is African Aura Resources

Limited; A TSX-listed company with a portfolio of

exploration licenses based in Cameroon and Liberia.

“African Aura of which I am the chairman has

agreed a merger with Mano River Resources. I’ll be

the chairman of the combined group. Mano River is a

bigger company than African Aura and it’s a friendly

merger” Netherway says.

“It’s going to be very exciting; we’ve just done

the mailing to the shareholders so this deal should be

finished. We have our EGM on September 18 so by

then the deal should be consummated.”

Another is Goldmines of Algeria, GMA

Resources.

“We have an operating gold mine in the South of

Algeria which is in production now and that’s a great

company too” Netherway says.

There is also KazakhGold, the largest gold

company in Kazakhstan and Netherway sits on their

board too.

“That has just been taken over by Polyus and

they are the largest gold company in Russia. That only

happened a couple of weeks ago and I’m staying on

that board as a non-executive director” he explains.

And finally there is the resource fund Altus

Resource Capital (ARC); a Guernsey domiciled, closed

ended investment company.

“We’ve just raised £26 million pounds for that

fund and the fund is now about 30 to 40 per cent

invested. It’s also pretty interesting because it’s the

only resource fund that has got it together since the

downturn and managed to raise some money to invest

in other resource companies” Netherway says.

“Its mandate is to invest in companies that are

already in production or are near production less than

$100 million dollars in market capital.”

Netherway has his finger firmly on the pulse of

mining industry development, future potential, and

present successes. As Shield embark upon their latest

drilling program one thing rings clear; this is only just

the beginning of the next chapter in Netherway’s

exciting story and Shield’s promising future. q

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146 | International Resource Journal | September 2009 September 2009 | International Resource Journal | 147


148 | International Resource Journal | September 2009

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