Mining Exploration in Western Australia

On occasions I am lucky enough to get a free pass from the office and wear a slightly different hat as a charter pilot.  I recently completed a 2 week contract for The Goldfields Nullarbor Rangelands Biosecurity Association aerial baiting for feral dogs and this involved covering a vast swathe of territory from Eucla to Cosmo Newberry to North West of Sandstone.  I was amazed at the number of small rigs and pilot diggings particularly through the North Eastern area.  For a supposedly quiet time, I don't think I was ever more than 10 minutes flying time from a representative of humanity.  For a small company involved with predominantly junior mining operations, this presented a very positive future outlook, and we look forward to working with some of our regular clients as some of these prospects come to fruition, as well as providing facilities for some of the smaller operators directly.

The remote area difference

I have recently been looking at pricing a large industrial building with high insulation requirements for a client, and been greatly struggling with this.  After several weeks of back and forward between the client, ourselves and the insulation supplier,  I was ready to throw my hands in the air and asked the rep "why is this so difficult, as surely we were not the only people in existence to have ever wanted to insulate a large building?  Is it something about us?"

His reply was very interesting.  "Jon, that is virtually the same scope that is written up Australia wide, but what normally happens is that is is technically not possible, and halfway through the project, the contractor finds it can't be done and the scope gets changed.  You are the only people we know of who try to work it out in advance"

Apart from muttering about why the rep didn't tell us (and others) this in advance, it caused me to reflect on what makes a successful remote area contractor.  Most of our sites are a long way from anywhere, and so issues have both a time and a cost factor to make anything happen.  We try to keep our projects as low cost as possible, and so we appear to have an inordinate amount of planning that happens BEFORE anything happens on site, and also before we even get to the stage of submitting a price estimate.  I have joked before that I only ever go to site for political reasons so the client thinks their job is being managed.  There is a large margin of truth in this as 90 percent of our head office work is complete before the first person arrives on site, and day 2 is generally an opportunity to sit back, take a deep breath and relax.  Execution is our anti-climax.  My observation of construction in Perth is that this is the time it gets really busy as the couriers and supervisors utes shift into gear picking up forgotten items.  Can't do that 1000 miles away, so we will stick with thorough planning in advance.....

2016 in memorium

Well, another financial year has been concluded, and it certainly has been surprising.  Amidst the doom and gloom, and the fears of both suppliers and clients going out of business mid contract, we have had a record turnover.  Some of the main things we saw this financial year in our industry were:

  • A huge management change in a key supplier along with promises of performance improvement,
  • A major new supplier entering into competition with that key supplier,
  • Very keen pricing from our steel sheeting and purlin suppliers,
  • A proportion of our competition dropping out of the market,
  • A change in the tendering and administrative requirements for some of the majors making it easier for some of the smaller engineering firms to bid and win on an even playing field,
  • A large and successful pushback on some of the majors who had tried to introduce significant payment delays to contractors, and of course
  • The Arrium group changes 

Our predictions for ourselves in the coming year are that with the turmoil and unpredictability, a number of closed gold mines will look at refurbishing and starting up, and a number of prospective gold mines who were not feasible at 1600 an ounce suddenly find themselves ready to build.