Runge predicts renewed US growth

MORE North American coal mining companies will seek to raise the environmental credentials of their operations in the wake of growing awareness of climate change and will continue down a path of sustained growth despite the difficult trading conditions encountered during 2009, according to Runge chief operating officer Pat Williams.
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Runge consultants at work.

Lou Caruana

The environmental challenge will not necessarily negatively impact on the profitability and viability of the North American coal mine industry which remains a major feedstock for power generation and is expected to grow by 1% a year for the next 25 years despite a growing switch to alternative energies such as natural gas, Williams said.

“We’ve steered through a turbulent 2009 – a period marked by a reduction in coal through lower electricity usage and the growing use of natural gas as an alternative power station feedstock,” he said.

“We’re now getting back into equilibrium. But the goal posts we are trying to kick though are moving. Our customers have to be more environmentally aware, as well as being mechanical/process related.”

Runge, which sees its role as adding value to high revenue mining businesses around the globe through better planning, believes the size and diversity of the 1 billion tonne per annum North American coal industry will ensure it is resilient enough to be able to adapt to more rigorous environmental conditions.

Coal currently accounts for 45% of all power generation in North America.

“There’s a complete ecosystem – the operations, the processing, the handling – of quicker and better ways of operating,” Williams said.

“Tonnes, grade, environmental foot print and margins all come into play.

“The main uncertainty is the speed at which things are picked up. The industry is quite resilient – it’s not a click-your-fingers type of industry.”

Runge’s efforts are focused on helping bring North American coal mining production to a sustainable capacity.

Williams said that given the complexity of the technical, economic and environmental issues, this advice would be more in demand.

New technologies will also be called for to cater for the changing political and economic landscape.

“We respond to our customers’ perceptions. We are the tail on the dog,” he said.

“We’ve got quite a few interested parties in coal-to-liquid technology, using the massive North American coal resource base – which is approximately 450 billion tonnes of demonstratable reserves. This needs to be brought in an environmentally neutral way.”

A number of environmental, geopolitical and economic reasons are making the prospect of coal to liquid more viable on a larger scale.

The longer-term strategy is to be more self-sufficient in petro-chemicals with a neutral or benign environmental footprint.

Runge, which operates in 18 locations around the world and has 360 employees, sees its competitive advantage as being its offering of technology solutions (desk top solutions and mining dynamics), mining consultancy (mine business planning and technical advice), and professional development (training courses internal and external).

The company saw a reduction in software sales but an increase in consulting during the economic downturn last year.

As the cycle moves forward there has been a change in the mix of demand and a rebound of software sales.

The company is seeking to position itself in the North American market to best utilise its talent across three of its North American offices in Calgary, Gillette and Denver.

“We are constantly recruiting people and retaining our diversity by redeploying people,” Williams said.

“The easier coal properties have been exploited so the quality and experience is essential to get projects into production.”