UNDERGROUND

Innovating to grow

MASTERMYNE is using innovation and strategic acquisitions to ensure that it keeps growing its presence as a contractor in Australia’s underground coal sector.

Mastermyne is collaborating with its clients on improving underground coal mining and development.

Mastermyne is collaborating with its clients on improving underground coal mining and development.

The company's culture is becoming more focused on innovation to meet its clients' needs. A renewed safety awareness is permeating the organisation too.  

Mastermyne managing director Tony Caruso said the company had been able to ride the volatile and cyclical nature of underground coal mine contracting and was in a good position for further growth.  

He remains cautiously optimistic about the future of both the Australian metallurgical and thermal coal sectors - regardless of the coal price outlook.

"We continue to see a disciplined approach to production cost by our clients and this is keeping their cash margins strong, which gives us confidence that this cycle will be sustainable over a longer period," Caruso said.

"With clients working on thinner margins in thermal coal we see fewer opportunities for our contracting business so we are focusing on moving the business further up the value chain to operate mines on behalf of the owner where the opportunity presents.

"During the last downturn we have seen many coal assets change hands from the larger mining companies to the smaller emerging miners and these assets with new owners who employ a different operating structure are turning these otherwise unattractive operations into profitable operations. This is a strategy we are also engaging for met coal operations."

Innovation

New technology is becoming available for underground coal mining and development and Mastermyne is keen to use it.

"Technology is featuring heavily in our current operations and in our future plans and wherever the opportunity presents we are bringing these improvements into our business and to our clients," Caruso said.

"These range from refinement of existing concepts to more major investments.

"Some are propriety technology developed by Mastermyne and others have been in collaboration with key suppliers.

"The company continues to be a strategic partner for many original equipment manufacturers who see an advantage in developing technology with a contractor before taking it to the mining houses.

"For these reasons we are seeing more opportunities in new technology than we have seen previously."

Recent examples of adopting technology at Mastermyne include its purchase of eight Sandvik loaders.

Six of them are the LS312 12 tonne loaders that have the latest technology in engine management systems to reduce diesel particulates and improve efficiency.

Those are the first LS312 loaders in Australian mines and are being mobilised into Mastermyne's Moranbah North contract in Queensland.

Mastermyne's aftermarket data management system collects real time data off the Joy miner and multi bolter on the Narrabri project in New South Wales.

The information is continuously transferred out of the mine via the wi-fi system and analysed through the propriety software system development by MCS called Prodmate.

"Through this collaboration with MCS we have seen continuous improvement in the cut and flit production rates along with many other benefits," Caruso said.

"We are also applying this same real time data analysis into more rudimentary outbye tasks such as secondary support. Pulling data directly from air tracks will allow us to be more efficient with the installation of secondary support and also provides us with an improved QA system backed by actual machine data."

According to Caruso the technology focus is not limited to the company's underground operations.

He said there were proprietary systems being trialled to streamline its back office support functions, which for a contracting operation are critical for the success of the business.

"Collecting information accurately and quickly translates to efficiency in payroll, invoicing and reporting," Carsuo said.

Collaboration

Mastermyne's clients are focusing on improving safety and reducing costs through technology and the company is actively involved in a number of trials with its clients.

"What is very evident is the shift to a collaborative approach around the development and introduction of new technology," Caruso said.

"This has been an important shift as no one party can, nor should, do all the heavy lifting. We are continually impressed with the work being done by the METS [mining equipment, technology and services] companies who have embraced the challenge of mining smarter and we are seeing where industry can identify the pinch points and issues to solve.

"There are many organisations ready to take up the challenge to solve those issues.

"We believe there is more opportunity to solve these issues faster if we all work collaboratively to find solutions."

Caruso said Mastermyne worked diligently through the cycle to maintain a strong business and the balance sheet benefited from that work.

"As we move into a stronger cycle we continue to be rewarded for the work done to manage the business sensibly over the past few years," he said.

"We maintain a conservative position on debt and we are focusing on maintaining a healthy cash balance as part of our strategy to cycle proof the business.

"With respect to acquisitions, we are continually accessing a pipeline of acquisition opportunities but with a very disciplined approach. As demonstrated with the recent purchase of Wilson Mining Services, targeted businesses need to be accretive, strategic and within Mastermyne's capability to manage.

"To the last point the Wilson Mining acquisition has benefited from the Mastermyne support and clients are already recognising that they can now get market leading strata chemicals delivered the Mastermyne way.

"This is a strong example of why we look for businesses that we understand and can add value to while also adding value to our clients."

Caruso said given the cyclic nature of the resources sector Mastermyne would always take a sensible approach around capital management.

"There is a balance to be struck on spending capital and maintaining a war chest to cycle proof the business," he said.

"We continue work hard to maintain that sensible balance without missing out on value adding opportunities to invest. For the right capital investments there is always an ear at the board table."

Safety

Caruso said the company is also focused on improving safety culture and outcomes.

"We have a number of sites now that have run extended periods without a recordable injury," he said.

"Some standout performances have been the place change contract at Narrabri, which has been operating for just over two years with only one recordable injury and our Grosvenor Mine Ventilation project and Broadmeadow Mine Conveyor project where our people have completed well in excess of two years injury free.

"Many of our projects are now passing through a full year without a recordable injury. While our performance is well ahead of industry benchmarks we still have much more work to do.

"A major change to our safety approach has been to move away from a punitive approach around people and safety, which has centred on catching people doing the wrong thing and making an example of them, to an approach of catching people doing the right thing and acknowledging and rewarding the behaviour we want more of."

Caruso said Mastermyne's efforts also centred on providing its front line leaders with the tools to understand and work with people as essentially the company runs a human centric business.

Its "Brain Science" project is at the core of this.

"We believe neuroscience has a significant role in transforming safety performance and we are now three years into this project and the results have been impressive, not only for safety performance but in building high performance teams," Caruso said.

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