Over the last couple of years, the mining industry has witnessed wild fluctuations in commodity prices, and miners have had to face significant swings in the operating margins of individual assets.
At his presentation at the Mining Club’s August Industry Luncheon, IGO managing director and CEO Peter Bradford outlined IGO’s strategy to mitigate these fluctuations was to focus on quality, value and cash flow.
While IGO is referred to as a diversified mining, development and exploration company, being diversified is not the company’s core strategy.
“Our core strategy is to own quality mines, with scale, long mine lives, in tight geographical areas,” said Bradford.
“We are therefore commodity agnostic and are focused on what we call ‘money mines’.”
Tropicana and Nova deliver scale for IGO, with the latter progressing through construction and development through to first commercial production on 1 July since the acquisition was first announced in 2015 at the company’s last WA Mining Club presentation.
“Nova is a quality mine, but why? First, it’s high grade. Second, it has great geometry – Nova is a fat, flat lying, shallow mine, which delivers low development costs and low mining costs. Third, the mineralisation is coarse grain and clean resulting in high recoveries. All this provides low cash costs and high margins,” he said.
“Our entire CAPEX spend was within three percent of the un-inflated 2015 estimate.”
IGO has changed dramatically over the past few years, transforming into a globally competitive, diversified mid-tier mining company, but Bradford still aspires to become more relevant.
“To become more relevant and to create shareholder value we must continue our long-term commitment to exploration.”
Chief growth officer Matt Dusci echoes that sentiment saying that IGO is devoted to discovery.
“We have increased our exploration budget from about 32 million last year to 52 million this year, with a significant portion of that focused on exploration around Nova and the Fraser Range.
“When I reflect on the history of IGO, it’s about investment in Greenfields exploration, it’s about recognising and consolidating significant ground position, and it’s about great science to recognise emerging belts early and having the willingness to do something different,” said Dusci.
At a press conference before the presentation, Bradford told reporters that nationwide not enough mining engineers are joining the workforce.
“The industry is not doing enough to encourage students coming out of high-school to think about a career in mining.
“At the top four mining schools nationwide, the number of students doing fourth year mining engineering is about 230, that drops to 130 in the third year and falls to 60 students in the second year. That’s a problem coming down the pipeline for the industry.
The company’s head of people and culture, Sam Retallack is quick to point out that IGO is working to mitigate this problem by offering students vacation work and by sponsoring scholarships such as the Mining Club’s Geology and Indigenous 2017 categories.
“We are proud of the way we have always worked with graduates and vacation students, and we think it’s an important stepping stone between education and employment,” said Retallack.
These claims are more than skin-deep with IGO offering all finalists in the geology scholarship category with vacation work opportunities.
The company also supports the development of apprentices at both their Long and Jaguar Operations, providing apprenticeships to individuals in the areas of the electrical, mechanical and boilermaking.