Strongly positioned businesses will be able to take the chance to capitalise on the new opportunities opening up in the industry.
“Twelve months ago, the industry was in the grip of a severe skills shortage and we couldn’t get the skilled people we needed,” he said.
“Now businesses are restructuring and a key opportunity is the availability of talent coming onto market. If they are top talent, we want them. We are looking at attracting the best people for our operations not just in Australia but globally.
“We are going to use this time to position Coffey Mining very strongly so that when commodity prices recover, we want to be the leading technical services provider in the industry. There are opportunities to leapfrog ahead to a place that would have taken us a greater number of years to achieve if we had been in a normal operating environment.
“There’s a lot of emotional sentiment around investment at the moment but logically the time to begin exploring and starting on a development is now because costs are down and resources are more readily available. This is actually a really good time to do exploration work in preparation for when people’s confidence returns and they are ready to put money into operations.”
Last month, Coffey International Limited posted the best trading result for any half year in the history of the company. Mr O’Toole said that as part of the Coffey group, Coffey Mining was better placed to ride out the tough times than many of its competitors.
“The diversification of the broader Coffey business puts us in a much better position than many of our competitors because we have access to work in industries that are less affected by the downturn,” he said.
“Coffey International Limited works in infrastructure, international development and a range of other industries so there are opportunities for our staff to cross over into some of these areas. For example, we are in a position to capitalise on the government investment in Australia in infrastructure by sharing staff with our sister company, Coffey Geotechnics.
“This allows us to retain capability and continue to attract new specialist capability into the business. We are doing well because we’re taking a longer term view and investing in a longer term view.
“The geographic footprint of the group also provides support in accessing new markets. Our West African office was recently approached to look at some mining projects in Yemen. The Coffey International Development group already has offices in the region and significant knowledge of the cultural and business practises in Yemen.”
Mr O’Toole said in addition to taking advantage of fresh opportunities, businesses wishing to stay in the game would need to be willing to restructure their work in the coming months.
“There are some hard choices ahead. When the financial crisis first hit, people were in a state of shock and many in mining fairly quickly ran out of operating capital. We saw a wave of businesses going into administration and we’re still seeing the end of that wave. Up until Christmas, a lot of businesses went into hiatus, waiting to see what would happen, but people are now thinking ‘what can we do next?’” he said.
“In places like Brazil, where Coffey Mining had a lot of exposure to exploration – which is one of the hardest hit activities in mining – we have had to restructure our business and direct some of the technical capacity into non-mining sectors.
“Coffey Mining in Brazil has a team of geoinformatics and software development conducting Data Management, GIS, virtual reality and geo-outsourcing work, and these activities now represent near 50% of our non-mining activities, compared with 17% four months ago before the downturn. This has come largely from actual growth in that area rather than a relative reduction in mining work. This is the kind of flexibility that will be required to weather the downturn.”
He said changes would also need to be made at an operational level.
“Companies will need to look at improving costs and productivity and the way they are managing projects and that might require some cultural change,” he said.
“Previously, because of the skills shortage and employee expectations we observed an increase in flexible rosters and reduction in site time at many mining operations. It is likely that this will change as companies look to increase productivity.”
“Companies are also looking to increase the grade of the commodities they are mining and reduce the waste material to be removed. They are rescheduling operations and in some cases reconsidering larger bulk mining methodologies in favour of smaller, higher grade operations.”
Mr O’Toole said while these were all important issues for businesses, they should not lose sight of the fact that an economic recovery was inevitable.
“The businesses that do well out of this will be the ones that have solid strategies in place to manage the downturn as well as planning for the recovery,” he said.
“In the long term globally, people are looking to maintain their lifestyles and improve their standard of living. This means they will continue to consume products and we will continue to have demand for the commodities that are developed into those products.”
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Media contacts
Diana Krause, Global Manager External Communication
T: +61 3 9473 1300; M: +61 420 959 942; E: diana_krause@coffey.com
