Interview: Paul Littman, Group Manager Procurement of Coal Assets at Glencore
On 26th February 2015, Paul Littman, Group Manager Procurement, Coal Assets at Glencore will be joining Austmine in Sydney to give a presentation on Glencore’s coal projects in the Hunter Valley, Colombia and South Africa and share insights into their procurement practices outlining various entry points into the supply chain. Before the event, we caught up with Paul to get his thoughts on two pressing questions:
What in your opinion are the biggest opportunities for mining equipment, services and technology providers in the coal market right now, with miners’ focus on OPEX?
The Australian coal industry is facing some of the toughest market conditions seen in more than 10 years. We’ve seen lower coal prices, high costs and a robust Australian dollar, including additional imposts such as increased royalty rates and the carbon and mining taxes. This makes the current operating environment very tough. We are looking to our suppliers to identify new or alternative products and services that will reduce our costs and improve our productivity while maintaining our absolute commitment to operating in a safe and sustainable manner. In addition, we expect our suppliers are able to identify opportunities in their own businesses that reduce their costs, with these benefits shared with Glencore. We expect our suppliers to be as rigorous in identifying sustainable cost reduction opportunities as we are.
What are your biggest considerations right now in your procurement selections? What should suppliers be aware of when trying to work with Glencore?
Our procurement strategies remain unchanged. We continue to look for suitability of products and services, with a strong focus on transparency of costs and rationality around any price adjustment mechanisms. This includes recognition of the scale of Glencore’s operations and a pricing structure that reflects achievable economies, and fairly represents the costs of delivering goods and services to different sites or geographies. We also look at evidence of ongoing viability of a business. Margins obtained by suppliers should be reasonable given the current environment, and transparent, as much as possible – reflecting factors such as manufacturing country of origin. We continue to prefer to develop long-term relationships with suppliers.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.