International Longwall News will publish the full results of the survey over coming days, below is an overview of the findings.
Consultants outlined several growth opportunities in their businesses driven by factors that included the loss of internal skills in mining companies; a growing requirement for more business-based consulting in conjunction with traditional consulting; and diversification into other specialities.
Future developments envisaged are increased levels of thin-seam mining, greater automation of equipment and various challenges to the right to mine.
Survey participants included Agapito, John T Boyd Company (BOYD), Marshall Miller & Associates, Marston, Norwest Corporation, Overland Conveyor and Weir International.
The impact of the coal market recovery
In general, consultants have experienced increased demand as a result of the coal market recovery. Weir reported a substantial increase in project workload in late 2004 and throughout 2005 while Agapito was pleased to note there were more longwall feasibility studies underway.
Similarly, Norwest’s clients are now requesting expanded “upfront” project development services ranging from raw exploration through all stages of feasibility study.
Transactional support services supporting resource and operating company acquisitions have also grown.
For BOYD, imbalances between supply and demand have had an impact on clients.
“A number of coal consumers are ill-prepared for higher pricing, as they erroneously assumed the previous 20 years of declining prices marked a permanent trend,” BOYD said.
“Such companies are seeking price forecasts and looking to secure their fuel supplies. Likewise, financial entities are pursuing investments in the coal industry, either through acquisitions or new mine development, and thus require analysis of potential opportunities.”
Mining companies too are in need of strategic planning advice, particularly regarding their competitive position in the industry.
Marshall Miller’s transition since 1975 from a geologic consulting firm to a multi-skilled diversified group has insulated the company from fluctuations. As high-cost producers exited the industry in the 1980s, the company increased staff and improved its abilities to predict mining and geological hazards in advance of mining. Industry consolidation has resulted in the company filling voids left in mining technical support.
Overland Conveyor believes with the coal market recovery most consulting projects are related to increasing equipment capacity or increasing reliability and availability: “When project goals shift to reliability, specific expertise requirements also increase.”
Business mix – local versus offshore
All respondents undertook offshore work that annually accounted for 10% to 40% of company revenue.
In 2005, approximately 60% of Marston’s revenue came from US-based work, with another 20% coming from Canada.
Overland Conveyor also had about 60% local work with international work growing. The company’s top three countries outside North America were Brazil, Chile and Australia; while Peru, Columbia, China, India and Indonesia were expected to play larger roles.
BOYD’s workload was generally in the range of 50-80% domestic and 20-50% international. Foreign locations varied by year and type of assignment with China, Australia, Canada, South Africa and Indonesia frequent project locations.
Norwest noted most rapid offshore growth in such regions as India, Mongolia, Africa and China.
Over the past three years, approximately 75% of Weir’s project work has been for local companies, with project work outside the US primarily in Canada and South Africa.
Marshall Miller mostly services local industries, but international work approaches 10%. Work in 2006 was primarily driven by assignments in China, Venezuela, Colombia, Australia, Canada and Mexico.
Other technology/expertise areas
Respondents outlined expansion into other technology/expertise areas, most notably into coalbed methane and health and safety training.
Norwest recently merged with Questa Engineering (an oil and gas and coalbed methane consultancy) and Applied Hydrology Associates, which has allowed expansion of offerings to oil, conventional gas, and coalbed/coal mine methane developers and producers.
BOYD too has pursued projects in “growth” areas such as coalbed methane, synthetic fuels, evaluations of transportation and dispatching infrastructure, valuations, new project development, litigation support and property acquisitions/sales. Health and safety is a major growth area for BOYD, both domestically and internationally.
Marston has moved into web-based economic and resource data management for mining companies and for clients interested in coal markets, transportation and pricing.
Marshall Miller, which has played a major role in establishing multiple commercial coalbed methane production plays in areas such as Alabama, Southwest Virginia, and Southern West Virginia, had this to say: “Today’s permitting processes and due diligence requirements demand a wide cross-section of experienced mining engineers, coal geologists, biologists, sedimentologists, climatologists, fluvial geomorphologists, civil engineers, land use specialists, foresters, soil scientists, hydrogeologists, botanists, lawyers, reclamation specialists, in addition to a variety of environmental specialists.
“By recruiting professionals with diverse backgrounds and skill sets, we added significantly to the stability of our company and further expanded our growing client base into both government and industry sectors,” he said.
Weir provides specifically designed supervisory training programs for the mining industry and has also expanded its consulting services in the industrial minerals industry.
Finally, on the technology front Overland Conveyor started a second company called Applied DEM, to specifically work on the use of “Virtual Prototyping” of traditional problem areas in conveying to deliver significant overall mine and plant gains in reliability and availability.
The company has also expanded into longwall equipment design, testing and manufacturing audits to fill expertise gaps to ensure products were designed and manufactured to fulfill the intended purpose.
“An engineer without specific skills in longwall shields will not know what questions to ask or what is important to the process. And since shields are only purchased on a multi-year cycle, keeping expertise in-house is expensive.”
Impact of the skills crisis
Most respondents noted growth in consulting companies was a direct result of the shortage of skilled technical expertise as mining companies sought out consultants for skill sets no longer existing in-house.
Most acknowledged challenges in attracting engineers and geologists into positions, with hiring of entry-level personnel fairly common.
Public perceptions about mining as a career were seen as negative as university students flocked to “high-tech industries” driven by the software and hardware computer industries, Marshall Miller noted.
Overland Conveyor believes one of the underlying factors driving the skills crisis to be a growth in complexity in mines and equipment.
“We believe the level of education and experience necessary today to design effective equipment that has...click here to read on.