I had contemplated a number of topics for this week's blog including networking, trust and recognition but in light of this week's changes at the helm of our country, I thought that I would take a tentative dabble into the world of politics. The other topics will have to wait for another time.

Journalists and other commentators often talk about the "business" of running a country. I believe that this is a reasonable analogy. The country has a revenue in the form of taxes, operating costs ranging from politicians and bureaucrats salaries to welfare payments and the cost of running the armed forces and federal police. It has capital assets encompassing such things as buildings, vehicles and military hardware. Even the passing of legislation that governs the way that the country and its citizens behave could be considered as the company policies and procedures. It also has "shareholders" as each citizen of 18 years or older has the right to vote and therefore change the "board" of the country.

With such strong parallels with business, it is perhaps surprising that there was such astonishment and even outcry that the Prime Minister should be ousted by his party mid-term. Should it really be that amazing?

Whilst it may not happen all the time, there are certainly plenty of instances where the board of a company either sacks the managing director or vigorously suggests that it is time for them to step down. This normally occurs when the MD is considered by the board not to have achieved the goals or outcomes that have been set for the company or if they are considered to be damaging the company’s "brand".

I therefore see what happened on Monday as being no different to what happens in business. The "board", being the Liberal Party, decided that Tony Abbott was damaging their brand and that he should be replaced by someone who appears to be more in tune with the "shareholders" values with regard to transparency and engagement. Certainly in my opinion, Turnbull is more of a statesman than Abbott ever was.

What really struck me though was the effusive and even affectionate way in which Bill Shorten spoke about Tony Abbott in Parliament after he had been deposed. It almost sounded as if he was describing a different person to the one that he equally vociferously attacked in the Parliament in the weeks and months before his demise.

To me this highlighted that politics has become more about playing the man than the ball. In my view this diminishes the quality of political debate because it focuses on an individual’s personality rather than the idea they are championing.

I remember when I was at secondary school, taking part in debating competitions and whilst these debates were very structured in their format, the focus was always on advocating for, or rebutting an idea or proposition. It would never have occurred to us to have attacked the personality of a member of the opposing team.

Many parliamentarians I'm sure, would have engaged in similar competitions or been members of debating societies whilst at university. So why is it, that when they get into Parliament they appear to change the focus from advocating ideas to attacking members of the other party?

I certainly believe that the media has contributed to the change of focus but perhaps we get the media and hence political performance that we deserve.

As I indicated in an earlier blog, we as consumers of the media, focus on outrage rather than facts. The media is a competitive business and whether it is print, broadcast or online media, they are all competing for our attention. So they give us what we desire, sensationalism, gossip and innuendo.

In order to have their voices heard, politicians play to the voracious media by way of leaks and backgrounding or open attacks on opponent’s character.

I agree that there are instances of politicians abusing entitlements that the media should be covering as they are definitely in the public (shareholders) interests, such as the Bronwyn Bishop Helicopter affair. The media should rightly be highlighting these abuses of position and power, but for a large part the debate over policy is drowned out by the innuendo and outrage over a politician’s character rather than their ideas. This I believe, diminishes the quality of political debate. Yes there are times when you wonder what possessed someone to say something or act in a particular way, but do those words or does that action diminish the value of the idea that they may be advocating?

Contributing to a general lowering of the quality of political discourse in my opinion, is the rise of the micro-party, representing minority views in the community but hampering the effective passing of legislation.

Whilst I believe that in a democratic society every view needs to be heard and considered. That does not mean that those views necessarily need to be acted on if the majority view is opposed. However, this appears to be what is happening in our political system at present, where governments need to get sufficient members of the cross benches on-side in order to get legislation passed. This inevitably leads to concessions being made to those minority views. I believe that this leads to poorer rather than better outcomes as it always involves a compromise or the re-direction of funds to that particular parliamentarians pet cause regardless of its merits or benefit to the broader Australian community. 

Irrespective of one's political views, I believe that if we as a nation elect a government to run the country, they should be allowed to do so unimpeded by the need to pander to minority interest groups. If at the end of three years, we collectively don't like what they have achieved, then we have the opportunity to vote them out and vote in the other party to see what they can do.

Which brings me to my final concern. The term of an Australian government is, in my opinion, not long enough to allow governments to focus on long-term strategic planning for the country rather than short-term strategic planning to ensure that they get re-elected in three years’ time.

Every business needs to have a strategic plan. Whether it is the country or a business we need to know where we are going. We should certainly review the strategic plan on a regular basis to ensure that it still takes account of the current conditions, but someone needs to set the vision and ensure that we as a nation are working towards it.

Perhaps if we could get back to serious political debate that focuses on the issues rather than the personalities there might be an opportunity for politicians to agree on some core strategies that both sides of the political debate can agree on as being in the best interest of the country. Unfortunately I think that I might be waiting a long time for that day to arrive!

Photo Credits

https://upload.wikimedia.org/wikipedia/commons/4/4f/Opposition_Leader_Tony_Abbott_%2816%29_-_Flickr_-_MystifyMe_Concert_Photography%E2%84%A2.jpg

https://upload.wikimedia.org/wikipedia/commons/c/ca/Malcolm_Turnbull_2014.jpg

This was the first time that I had attended ADU and so I had no baseline from which to judge attendance. However, my impression was that it was poorly attended, an opinion that was endorsed when speaking to someone that I knew who was a regular attendee. He told me that it was far quieter than previous years and that both delegate and booth numbers seemed to be down.

I managed to download the booth details and conference agenda from 2014 and analysed this together with the information from the 2015 conference which showed the following statistics for resource companies:

Four companies doubled up in a booth as a cost-cutting measure.

In his opening remarks Bill Repard, Executive Chairman, Paydirt Media, the conference organisers, claimed a "record number of delegations", presumably this was because Zimbabwe was represented for the first time! He chose his words carefully when talking about the total number of delegates and said that it was "around 1000". I have no way of validating this number, but I do know that the conference auditorium held 340 people and at no time did I see it full, even in the opening session. I would estimate that for most sessions, it was 50 to the 60% occupied and at times less.

Whilst I was aware that the conference was split between two hotels, the Pan Pacific and the Novotel, on opposite sides of Hill Street, it was not apparent from any of the signage, exactly where the conference was being held. Admittedly this information was contained in a leaflet in the "show bag" but most delegates leave sifting through the contents of the bag until after they have got their bearings.

With a full price tickets for delegates being $1750; a $200 discount was available to those booking early, the conference is cheaper to attend than Diggers & Dealers, although I would suggest that this does not necessarily make it better value for money. To reach into the “show bag” and pull out a flyer inviting me to sign up to receive a DVD of the conference presentations at a cost of $160 was surprising to say the least. That piece of paper went straight in the bin. I trust that this does not become a trend. At other conferences that I have attended in the past, conference papers were provided as part of the ticket price either on DVD or via download from the conference website.

Mr Repard should remember that listed companies are required to lodge their presentations with the ASX, which is where I will be getting copies from and I'm sure that most of the other entities presenting would be happy to provide a copy electronically if anyone so wished.

Having read Dryblowers pre-conference piece on Monday 31 August, I was interested to see what the tone of the conference was. Blower had suggested that many African countries were a bit miffed at mining companies who had come into their country promising much and then failing to deliver projects due to the slump in commodity prices.

It was therefore a little surprising to listen to one country after another presents themselves as the “best place in Africa” to come and explore and mine. Phrases like "multi-party democracy", "stable", "simplified", "revised mining legislation", "elimination of corruption" and "Extractive Industry Transparency Initiative (EITI)" were widely bandied around.

My takeaway from all of these attempts to lure explorers and miners, is that Africa "gets it". Perhaps it is the downturn in commodity prices that has impacted on the number of mining and exploration companies choosing Africa as a destination, it is apparent that all of these countries understand that they are competing globally for investment in the mining sector and without the kind of reforms of which they spoke they will find it increasingly harder to attract investment to their country.

Several of the countries presenting made mention of artisan miners in their revised legislation and how the legislation provided for this type of activity. But it was the Hon Fred Moyo MP, the Minister of Mines & Mining Development, Republic of Zimbabwe, who made it clear, to me at least, why accommodating these people is important. He explained that the issue of small scale miners, often termed "illegal miners" was one that they had to deal with. He argued that if one million people undertake “illegal mining" in order to survive, then the legislation has to recognise this and accommodate them in some way.

On the theme of legislation, Otsile Matlou of ENSAfrica, a lawyer with a great sense of humour, gave an entertaining and insightful presentation on the regulatory framework in Africa and the move towards an integrated structure.

He made the point that the shape of Africa; as in country borders, is determined by its colonial past and therefore its mineral regulation is similarly defined by its colonial history.

Otsile also noted that the Africa Mining Vision (AMV) is actually about development rather than mining, mining is seen as a catalyst for development and therefore a reason to encourage it.

This reinforced the message from our Foreign Minister, Julie Bishop in her presentation to open the last day of the conference and underlined by many of the companies giving presentations throughout the conference.

Tanya Plibasek, the Shadow Minister for Foreign Affairs, whilst partially endorsing mining as an enabler of development appeared to be more interested in political points scoring by highlighting the aid that has been withdrawn from Africa by the current government as well as firing a few shots across the bow of the industry about environmental impact and corruption. She brought to mind a teacher telling the kids to play nicely in the playground and warning them of the consequences if they did not.

I certainly think that at events such as this, politics should be left at the door and both parties should be focused on the positives of Australia's engagement with Africa.

It is a fact that most mining and exploration companies operating in Africa, indeed anywhere in the world, now take corporate social responsibility (CSR) very seriously and are genuinely enhancing the communities in which they operate. Perhaps the most impassioned commentary on CSR was given by Tim Carstens, MD of Base Resources, who stated that he had banned the term "CSR" in their company because it sounds like an obligation. He said that they saw it as a core part of their business and treated as an investment. So like any other investment they look at cost benefit to ensure that the best use is made of the money that they invest. Tim said that they are looking to leave a legacy so that when the Kwale mine closes in about 13 years’ time they don't leave a void and a memory of "how good things used to be". There was certainly sincerity in his voice whilst he was speaking on this topic.

Base have certainly put an emphasis on employing Kenyans on the project with 94% of their employees being nationals. The expatriates currently number 42 but Base have a target to reduce this to 15 in the longer term. But Tim pointed out that the employment issue is actually more complex than simply employing Kenyan’s, it is about employing local Kenyan’s, people who come from the province in which the mine is located. In this regard, 62% of their workforce are “locals”.

John Welbourne, MD of Resolute Mining had a similar message about community engagement and support on the first day of the conference.

Resolute are looking at connecting their Syama goldmine in Mali to the grid and as part of that are looking to connect communities along the route to their power line because of the benefits that this will bring to those communities.

One of the positives that I took away from the conference was a couple of conversations that I had with recruiters, who both indicated that business was picking up. One in particular mentioned that he was receiving an increasing number of briefs to find Study and Project managers, suggesting that there are certainly some in the industry that believe that we are at or near the bottom of the cycle and will be shortly moving on an upward trajectory and they are therefore getting ready to be amongst the first movers.

The commodity of the moment appeared to be graphite, with several companies presenting on their "outstanding" project with the largest flake size, highest carbon content and biggest tonnage etc. Only Alan Mulligan, MD of Walkabout Resources was bold enough to suggest that the graphite price will fall as a surplus of supply comes on stream. Interestingly enough there was an article in yesterday's Miningnews.net titled, "Weighing up graphite's future", which pondered the same issues and came to the same conclusion.

In terms of standout presentations, I was certainly impressed by Colin Barnett's knowledge of the West Australian mining industry and his apparent ability to speak off the cuff. He may well have referred to a few notes but it all seemed to flow naturally and regardless of which side of politics you sit, he is a great advocate for the state and for the mining industry.

John Welbourne, gave an excellent and high energy presentation on Resolute's activities in Africa and made the point that by 2040, Africa will have a working population of 1.1 billion people, which is more than China or India. A great reason to be operating there.

Base Resources MD, Tim Carstens gave a similarly energetic and passionate report on their Kwale heavy mineral project in Kenya and his views on the social aspects of operating in Africa, as mentioned earlier.

Cliff Lawrenson, Minemakers MD gave a very eloquent, punchy and short presentation on the company's Baobab Phosphate Project in Senegal and Lindsay Reed did a similarly focused and brief report on their Cabinda Phosphate Project in Angola.

I will caveat my next statement by saying that I worked for Minemakers for almost 7 years. Apart from gold; which in most currencies other than the US dollar is doing pretty well, phosphate is the standout commodity at present having enjoyed 12 months of stable pricing whilst nearly every other commodity has fallen. The problem is that companies working in the phosphate space are lumped in with all other resource companies and are therefore "on the nose" with investors. In reality these companies should be the standouts of the sector, given the commodities stable price and the projections for world population growth.

Jayne Baird, VP Exploration Africa and Atlantic Margins, for Woodside Energy Ltd, provided an intriguing presentation on Woodside’s targeting methods, explaining how they effectively re-trace time to find analogue targets along the continental margins. Certainly an interesting presentation for the technically minded amongst us.

Most of us are aware of Africa’s enormous mineral endowment and are probably aware of oil in Nigeria and Angola, but the full extent of Africa’s oil and gas resources, both known and potential, is truly staggering, hence Woodside’s interest in the continent.

Finally I must mention James Durrant, Study Manager for Danakali Ltd who gave a very impassioned presentation on the companies Colluli Potash Project in Eritrea.

James read from a written speech; something which I have found hard to do with good flow and any real sense of conviction. He certainly wore his heart on his sleeve and managed to get the emphasis in exactly the right places so that his a passion for the project was very apparent.

I suppose the question for me is whether my attendance was worthwhile? Well it will certainly take several months until I can provide a definitive answer on that from a financial perspective. I know exactly how much work I have to generate for Wardell Armstrong or myself in order to recoup the cost of attending.

In terms of gaining a sense of the level of mining industry activity in Africa and the receptiveness of the host nations to exploration and mining within their borders, it certainly provided a great insight.

Will I be back next year?  I can't give an answer on that just yet.


References:

https://www.africadownunderconference.com/


http://foreignminister.gov.au/speeches/Pages/2015/jb_sp_150904.aspx



http://www.tanyaplibersek.com/speech_africa_down_under_conference_tuesday_2_september_2015



http://www.resolute-ltd.com.au/


http://www.baseresources.com.au/



http://www.woodside.com.au/Pages/home.aspx



http://www.minemakers.com.au/



http://www.minbos.com/



http://www.danakali.com.au/

I am indebted to Scott Perkins, former Chief Executive of the Northern Territory Department of Minerals and Energy for the idea for this week's post. Although it has morphed somewhat from his original suggestion.

Scott rang me to suggest that one of the matters that often appears to be overlooked in any debate over mineral development, is the fact that all human activity impacts on the environment to some extent and that the role of government agencies is to assess whether the benefits of undertaking a particular activity outweigh the negative impacts caused by carrying it out.

To underline his point he related a conversation that he had over lunch with a prominent environmental lobbyist.

In this conversation he suggested that this person was happy to live in and enjoy the amenity that the wonderful city of Darwin provides but that in order to create that built environment, we as a society, and by implication they, had accepted that there would be a price to be paid by the environment. Habitat would be lost, flora and fauna species may be locally depleted, groundwater, surface water and the air quality would most likely be adversely impacted. Nonetheless, the city was built and continues to be developed.

Perhaps because we all need somewhere to live, food to survive and hopefully a job to fund the former two needs, that we find it easy to accept these compromises or perhaps we simply ignore them.

The recommendations of regulators to their political masters on any development, whether it be a housing development, industrial complex or a mine, should be entirely fact based, the result of detailed scientific studies, social impact assessments and economic modelling.

However, the decision on whether or not to approve the development are nearly always made by politicians and in my view politicians rarely let the facts get in the way of their decision-making! They are nearly always swayed by public opinion, or more precisely outrage and in particular whether they think their decision  will enhance or diminish their chances of re-election.

In my opinion the challenge for the mining industry is not in getting the population in general and politicians in particular to understand that every human activity is a trade-off; that much I think is implicit, the true challenge is in dealing with the outrage that often accompanies a proposal.

This challenge can be summed up in the two words, Risk Communication.

In the late 1990’s I attended a seminar in Melbourne given by Dr Peter Sandman. Dr Sandman specialises in Risk Communication and founded the Environmental Communication Research Program (ECRP) at Rutgers University in 1986, and was its Director until 1992. 

Dr Sandman coined the equation, “Risk = Hazard + Outrage.” Just think about that for a moment. What he is arguing is that risk has two elements, Hazard, the actual physical threat or danger and, Outrage, the community response to the Hazard.

Peter Sandman's studies have shown, there is often very little correlation between Hazard and Outrage. In other words an activity or proposed activity can actually have a very low danger and yet still trigger enormous public outrage. Conversely he can cite examples where the physical danger is high yet outrage is at best muted or even non-existent.

Another fact borne out by research conducted at Rutgers, is that we humans are far more responsive to outrage than we are to facts.

To demonstrate the point during the seminar, Dr Sandman related a study that they undertook using 30 paragraphs of text relating to an imaginary accident at an industrial plant. The paragraphs were carefully constructed so that they contained either facts or outrage.

The 30 paragraphs were given to a bunch of journalists and they were given the task of reducing this down to an article suitable for the front page of a newspaper. The journalists duly edited the paragraphs. The results were very interesting because they focused on the paragraphs which conveyed outrage although they did still retain some of those containing facts.

The same 30 paragraphs were then given to a group of newspaper editors, who were asked to undertake the same task. Again they focused on the outrage but did still retain one or two facts, but certainly far fewer than the journalists.

Finally the paragraphs were given to a group of newspaper readers who were assigned the task. This group removed all of the facts and left only paragraphs containing outrage.

There are there takeaways from this story, firstly we as readers focus on outrage rather than facts, secondly we therefore get the newspapers that we deserve or at least desire, and finally, once the outrage horse has bolted it is difficult if not impossible to get it back in the stable.

The evolution of Social media over recent years has, by the way, provided the outraged with an easily accessible an ready platform to air their anger and it works far more effectively for those outraged than those trying to quell the anger. Dr Sandman recently wrote an article titled “10 Things You Need to Know about Outrage Management and Social Media”. (Please refer to the references at the end of this article)

One of the other aspects of Risk Communication that Dr Sandman talks about are the "Publics". Yes you read that correctly, plural.

He divides the population into four concentric circles. At it's core are the “Fanatics.” In Dr Sandman's words, "You know their telephone numbers by heart, and they know yours. They want input into everything you decide. Your issue is their main interest aside from job and family." I have had first hand experience of Fanatics.

Surrounding these we have the "Attentives", "They monitor the media on your issue carefully. Once in a while they want to attend a meeting or answer a survey. Your issue is in their top 20."

Further out again we have the "Browsers", "They check you out in the media from time to time, but they don’t want to be bothered providing input. Your issue is on their “worry list,” but way at the bottom."

And finally there are the "Inattentives", "They don’t know and they don’t want to know."

The key is therefore to engage with the Fanatics because the way that they respond influences the way that the broader population will behave. (For those wishing to read Dr Sandman's advice on how to deal with the Publics, please refer to the link to sand40.pdf at the end of this post)

So what does the mining industry need to do?

Firstly there is a need for openness a need to talk with the communities and stakeholders that our potential activities may impact upon at an early stage. Be truthful will them as to how a project may develop, what they can expect from you during each stage of development from exploration through to construction and operation. Invite questions, be open and responsive to people's concerns and provide them with relevant factual information regarding their particular concerns. Identify who the Fanatics are and make sure that you are engaged in a dialogue with them.

When it comes time for an environmental impact assessment in an ideal world Dr Sandman argues that if the meaning of scientific data can be agreed in advance then this will defuse much of the potential for outrage because there is a shared understanding of its meaning.

For example, before any studies are commenced, if it is agreed between the proponent and the community that, if the discharge water from a project changes the chemistry of the receiving water by more than certain limits, then it would either mean that the project could not proceed or that an alternative means of treating the water prior to discharge would have to be employed, even if that were a more expensive alternative for the proponent.

By gaining consensus on the meaning of the outcomes of studies it defuses the opportunity for outrage even getting started.

Developing my previous example of the water discharge. If the proponents scientific advisers and the communities scientific advisers; normally the regulators, agree that a 10% change in the certain elements of the water chemistry is perfectly acceptable and as a result of the studies, it is determined that these parameters will change by approximately 8%. Then by prior agreement this is a totally acceptable outcome.

However, were the proponent to undertake the same studies and deliver this outcome without prior discussion and agreement, there is the potential for someone opposed to the project to seize on the 8% change in the chemistry and fan the flames of indignant outrage, “how can this mining company be allowed to impact receiving waters to such an extent?”

As you can see from these two scenarios, none of the facts have changed yet an opportunity has been created for significant outrage to be generated from something that by agreement would have been an acceptable impact.

We have all seen the newspaper articles and headlines with emotive phrases such as, "the food bowl of Australia", or, "this pristine environment". I'm sure readers could contribute many of the own examples of such impassioned statements. The factual evidence may differ starkly from teh perception created by such emotional phrases.

So my recommendation to the mining industry is to get on the front foot, talk to your community and other stakeholders, and discuss what the impacts might be and gain agreement on what is acceptable and what would require an alternative approach to be taken.

I also highly recommend that anyone involved in gaining approvals for mining developments attends one of Dr Sandman's seminars or at least takes the trouble to read some of the many articles that he has written on the subject.

Footnote:

I did toy with the idea of using either the "Lock The Gates" or perhaps the "Frack Off" logos as the image to accompany this post as examples of the kind of outrage that can be generated by resource proposals, without thoughtful management. However, whilst it may perhaps have made the point, I decided that rather than give these campaigns yet further web coverage, that I would instead use some old images of some poignant stickers that used to be distributed by the Minerals Council of Australia.
  
There will be no blog next week as I shall be attending the Africa Down Under conference. If you are attending then please come and seek me out.

References:

http://www.psandman.com/index.htm

http://www.psandman.com/col/social-media.htm

http://www.psandman.com/handouts/sand40.pdf

http://www.minerals.org.au/

With the fall in commodity prices over the past couple of years we have seen an enormous toll taken on the mining industry with mine closures and layoffs. Those operations that have survived are working their way through the inevitable cost-cutting measures trying to save every last dollar.

But there is within all of these organisations hidden wealth that is not; in many cases at least, being realised because the management style of many of the industry's leaders does not create an environment that unlocks its potential.

Just like many mining engineering students before and since, the syllabus for my degree included lectures under the heading "Management". I recall this broad banner encompassing lectures on such topics as economics, project planning and management, law, industrial relations and occupational health and safety.

You will note that nowhere amongst that group of subjects was the topic of "leadership". Whilst I have no doubt that this was reflective of the times, it is perhaps an indictment of the education system of the time that no one considered this subject to be important enough to warrant lectures on this topic.

The only source of insight into leadership, that we as students encountered, was provided informally via discussions with various lecturers and the staff at the test mine, on their experiences in management roles.

When I tell you that a large proportion of the mining engineers who comprised the mining department had worked in Africa, it would not be surprising to learn that their preferred leadership style was very "colonial" in outlook, harking back to the days when a white skin gave you authority and power.

I do recall having a slightly more enlightened discussion with one of the staff at the School of Mines test mine. This gentleman had worked overseas for Crown Agents when it was a UK public statutory corporation, overseen by the British Ministry of Overseas Development. He had managed a quarry for them in the West Indies.

I remember him explaining to us one day, that if we wanted to get buy-in to a particular idea, concept or change of work practice from our employees that we needed to find a way to engage with them and make them feel as if it was their idea. He suggested to us that if we had a new idea that we wished to implement then we should wander around the site talking to various employees; in particular those who would be directly affected, float the idea with them and then get them to come back to us with their thoughts. He expressed the view that in this way they would believe that it was their idea in the first place and would therefore be committed to its implementation.

You will gather from this description that it was still a case of the boss telling the employee how they were to do their job by the least there was some recognition that management needed to engage with the employees.

Personally I believe that it was naive to think that the employees would not weigh up for themselves whether the new method was an improvement on the old way or not, but that they might either decided that it was actually an improvement or the fact that management was talking with them was in itself an improvement.

Whilst mining degrees still include units on Mine Management, I must confess to not knowing exactly what this entails. I can only hope that it now includes something on leadership.

As I mentioned in my post a couple of weeks ago, the industry, unfortunately, still has a high proportion of alpha male types, for whom "my way or the highway” is a popular theme tune. They mistakenly believe that this shows them to be a strong leader who is clear in their purpose and therefore someone who deserves to be followed.

The truth is very different to their perception of strength. People follow them because to do otherwise could be considered a "career limiting" act, so people do as they are told but in many cases only half-heartedly and in the worst cases may look for an opportunity to move somewhere else as soon as possible.

Such leaders will never get the best out of their people no matter how vociferous they are in indicating where they are heading and how they will get there. They are, at their core, diminishers and their leadership style will always lead to their teams underperforming.

In boom times this under performance probably goes unnoticed, commodity prices are high and everyone is making good profits, companies are scrambling to attract and retain employees and employee turnover in the industry as a whole is high.

However, in more normal times and especially in bad times the deficiencies of this management style become stark. Output is lower than comparable operations, costs higher and turnover still high relative to peers.

Contrast this with the manager who engages with his employees, listens to their ideas and suggestions and facilitates their implementation, where appropriate.

Here I am not talking about the proverbial suggestion box. I mean real engagement, holding open discussions without the threat; real or implied, that anything negative that is said might be career limiting. But most importantly just listening to what your employees think about the business and the way in which it operates, the good, the bad and the ugly.

This is not to say such employee proposals or criticisms should go unchallenged. Part of the role of the leader is to challenge those ideas, to test them to ensure that the perceived or proffered benefits of a new method or approach are real and will benefit of the business. Where criticism of the business is raised, again it needs to be tested, those conversations normally run along the lines of, “you say that we never XYZ…..when was the last time……?”.

Not only should the leader test these employee orginated new ideas, it is their role to encourage others to do likewise and to build on the idea so that if it passes this testing stage and is implemented, that it is the best implementation of the concept that could possibly be achieved because everyone has had input into the execution of the change.

This approach ensures not only that the idea will improve outcomes for the business but as importantly, that those involved in the business are committed to it because it is in fact their idea and are therefore determined to prove that it is a better method than that which it replaced.

So to an extent the former Crown Agents, Quarry Manager was indeed correct. Engagement with the workforce is the key to unlocking this wealth within the business. But it is the power of people working together to implement their plan rather than one imposed on them.

Perhaps we would have more productive mines if a greater number of managers did less talking and more listening to their workforce.

In my post of 16 July 2015, I touched on the issue of strategy and strategic planning. I opined that there appeared to be a lack of strategic planning in the mining industry, although I have no doubt that many an MD and senior executive would protest that this was untrue.

So perhaps I should be more specific in my criticism and say that it is not that "strategic planning" sessions are not held, but rather it is the processes employed, or the lack of them and the quality of the discussion that takes place that I take issue with.

The Oxford dictionary defines strategy as:

“A plan of action designed to achieve a long-term or overall aim”

The origin of the word is from the Greek stratēgia, meaning "art of troop leader; office of general, command, generalship", which obviously speaks to its military origin.

Like most people in the resources sector I have been involved in strategic planning in the various companies for whom I have worked for much of my career . As with many of you I suspect, I have found the processes employed to have varied significantly from one company to another, both in terms of structure and content.

I have seen a number of methods employed to run "strategic planning" sessions, both good and bad. In its worst form it has amounted to nothing more than an MD or other senior executive leading the board and/or senior executives to a predetermined outcome. Typically such sessions have an agenda prepared and circulated in advance that pre-empts the matters that will be discussed before leading everyone to a preferred conclusion! In my mind this is not strategic planning. Such meetings are also often time constrained to ensure that the participants stick to the “script”.

It may well be that the MD or executive leading the strategic planning session has indeed been through a process in their own minds that led them to their conclusion or preferred outcome, but this is not a true strategic planning process.

A strategic plan needs to be contextual and needs to be owned by the group drawing it up, this can only be achieved if the process of arriving at the plan is open, engages all of the players and is free to take-up lines of discussion that may not have occurred to one individual in drafting an agenda leading towards their preferred outcome.

Maybe because I am an engineer I like structure and whilst an agenda is indeed a structure, it is not what I mean in this context.

To me structure in the context of strategic planning, refers to a structured process which guides the participants through all of be factors that they should consider in arriving at their strategic plan.

To date the best example of a structured process that I have encountered, is that which was used by Gold Fields in the mid-2000’s and is based on the book by Chantelle Ilbury and Clem Sunter called Games Foxes Play (GFP).

The Fox is used as a metaphor to describe how we should change our plans based on changing circumstances. As Ilbury and Sunter point out, Foxes do change their minds - when they realise they are wrong about something or something better exists out there.

The GFP approach is a two phase process. The first phase they call "defining the game" and comprises five steps:

1.    Scope of the game
2.    The players
3.    Rules of the game
4.    Key uncertainties
5.    Scenarios

They refer to the second phase as "playing the game", this too has five steps. They draw on the strategic insights gained in the first phase and take a more focused view of the possibilities ahead:

6.    SWOT
7.    Options
8.    Decisions
9.    Measurable outcomes
10.  The meaning of winning

Participants in the process engage in what the authors call a “conversational model” which is circular rather than linear, with each step of the process interconnected so that it can lead to a review of earlier material based on the conclusions reached later in the process.

A graphic, extracted from the book, showing this conversational model is shown below.

Source: Games Foxes Play, Ilbury & Sunter

The process also allows for the noting down during the course of the discussion, issues for potential action (IPA’s). This allows thoughts and ideas that may not relate to the immediate area of discussion or to be captured and incorporated later in the process if they are considered to have a material impact on the options and decisions.

The process is not quick and nor should it be. A strategic plan is an important document that will guide the actions of a company or a site for the next 12 months or until circumstances change significantly, in which event all good Foxes will reassess their strategic plan

Gold Fields used to set aside two days each year, for each of the company's site teams to go through the GFP process to arrive at the following year’s strategic plan. The budget was then shaped around the actions needed to achieve the strategic plan.

I will not attempt to lead you through the process that is not my purpose here. If you are interested in this area, then I would thoroughly recommend obtaining a copy of the book and reading through the process and maybe even encourage your company to use it for their next strategic planning session.

My intention was merely to raise it as a model of how a structured process can and does work. This one does happen to resonate with me, but I am sure that there are other models that work as effectively.

I also wanted to make the point that a company's strategic plan requires a commitment of time. Whilst the actual time may vary from company to company and process model to process model, I am firmly of the view that a sound strategic plan cannot be arrived at in a mere two hours!

For those who are interested in furthering their reading on strategic planning, I would also recommend [10] lessons from the future and lessons in radical innovation, both by Wolfgang Grulke.

Whilst not about process per se these books highlight how radical thinking can create new futures for a company that are currently not imagined.

In [10] lessons, I found it particularly interesting to read Grulke talking about the life cycle of an organisation and describing how, in the first half of a company's life cycle the focus is on customer value but in the second, it is on the business efficiency and costs.

He argues that inevitably companies become so large that an enormous number of people within the business are focused solely on managing the organisation, rather than focusing on what the business actually does. At this point smaller, more versatile companies start to take market share away from the established player.

Whilst mining, it could be argued, is different to retail or banking, which is where Grulke focuses much of his discussion, perhaps the analogy is in small and lean juniors acquiring the cast off assets of the majors and turning them from loss-making enterprises into profitable ones.

In conclusion, whether it is GFP or some other process model, I urge would you to adopt a structured process rather than an agenda for your next strategic planning session and give it the openness, application, diligence and time that it deserves because there is surely no more important an activity that you can undertake than to arrive at a good strategic plan.

References:

http://www.mindofafox.com/site/home

http://www.futureworld.org/PublicZone/Gurus/GuruOrg.aspx?GuruID=4485

Those of you who know me, will know that I fly and have an interest in all things aviation related. It will therefore be of no surprise to any of you that I recently read Richard de Crespigny’s account of QF32, a truly remarkable account of how a cool head and years of accumulated experience resulted in a happy outcome for all involved.

One of the interesting aspects of de Crespigny’s account, is that whilst he describes himself as an "alpha male" and explains that he was both legally and practically in command of the aircraft throughout its flight, he also details the consultative approach that he took in dealing with the emergency. He invited input from the other four pilots on the flight deck, which sometimes was forthcoming and sometimes not. His decisions were informed by the feedback that he received. The evidence of the effectiveness of this approach was in the outcome.

It was with this background that I then read Steve Heathers blog, Mining People Matters, titled “The War on Talent…..” (refer to References at the end of this blog for the link)

In particular I was interested in Steve's comments under the heading “Greater collaboration/fewer silos”. In this section he details his thoughts on how the complexity of many modern mining operations has been dealt with by creating functional silos. He then goes on to talk about the need to break down these silos and concludes by stating that, “This includes breaking down the ”alpha male” culture and promoting greater teamwork and collaboration across the functions”. [I am sure that Steve was using the term in a non-gender specific way!]

Many of us will have experienced silos at some point in our careers. It can happen across the full spectrum of size and complexity of operation and in my opinion is always management driven, either by an individual or group of individuals. These individuals are normally the formal department/section heads intent on building an empire, but in some instances it can be their deputies who subvert the incumbent head.

Many of these could well be described as "alpha males", and would almost certainly wear the label as a badge of honour, but in fact I believe that this is a truly sweeping generalisation and the real root of the silo mentality is something more subtle but nonetheless devastating. However, gaining an understanding of the characteristics of this trait can also lead to the successful dismantling of these silos and an attendant boost in performance.

The characteristic to which I refer is a tendency towards being a Diminisher or a Multiplier.

In 2010 Liz Wiseman with Greg McKeown, published a book called “Multipliers”, subtitled, "how the best leaders make everyone smarter”. The book was based both on Liz's personal experience during the course of her career, together with extensive research including analysing data on 150 leaders, as well as conducting many interviews. The book cites many real-world examples of both multiplier and diminisher behaviour.

If one was to précis the book to its core findings it would be to tabulate the five disciplines or characteristics that multipliers exhibit, and that diminishers exhibit the antithesis of. These disciplines are succinctly summarised in a table in the book that I have reproduced here.

Source: Wiseman & McKeown, Multipliers

Whilst the book expands upon all of these disciplines and provides examples of each, I think that the descriptions are incisive and even from this short summary it is easy to start to classifying the people who we have worked with or for, into each of the two classification. Of course the descriptions relate to the most extreme demonstration of those disciplines and in reality there will be a spectrum ranging from extreme diminisher to extreme multiplier. There will also be those who are marginal diminishers and marginal multipliers.

Through examples in the book Wiseman and McKeown show that diminishers weaken organisations, lose talent and result in underperformance, whilst multipliers strengthen organisations, attract talent and lead to exceptional performance.

Through the interviews conducted as part of their research the authors were able to demonstrate that multipliers got twice as much from their teams as did diminishers from theirs. They then pose the question "what could you accomplish if you can get twice as much from your people?" An interesting question indeed particularly with the industry in its current parlous state.

The good news is that even diminishers can learn to be multipliers and those who are marginal multipliers can learn to hone their skills to become master multipliers.

I strongly believe that this book should be compulsory reading for everyone in a supervisory and management position in the mining industry. They should read it with an open mind and at the conclusion of the book ask themselves whether they would rather be a multiplier or a diminisher. If they choose to be a multiplier; and I sincerely hope that they will, then they should set about cultivating the disciplines of a multiplier.

Just imagine if the management teams at every mining operation behaving as multipliers, just think what they could achieve.

So return to where I started, whilst Richard de Crespigny, may describe himself as an “alpha male”, he still appears to be able to exhibit the disciplines of a multiplier.

So I’ll finish with a call to action and suggest that everyone who reads this blog should go out and buy themselves a copy of multipliers, read it and when finished, if you agree with the concepts described, go out and spread the word.

References:

http://qf32.aero/

http://us1.campaign-archive1.com/?u=54c7590bc2dc96776616d63ee&id=2b463b241e&e=96091d5e81

E.Wiseman, G.McKeown, 2010. Multipliers, How the best leaders make everyone smarter, Harper Business, ISBN 978-0-06-196439-8

http://multipliersbooks.com/

http://thewisemangroup.com/about/our-team/

The 1969 movie was a rather enjoyable outing for a 13 year old boy and perhaps it was that that gave me the taste for wandering the planet and a fascination for gold?

Unfortunately my Father decided to buy the movie soundtrack, which somewhat jaded my view of the film. There is only so much of Lee Marvin singing, “I was born under a wandering star”, that someone into ELP and other Prog Rockers could take!

Time moves on and around one third of my career has been spent in the gold mining sector. It is therefore an area that I know reasonable well and an area that I have maintained an interest in regardless of whether or not I was involved in it at any particular point in time.

It is therefore perhaps not surprising that the sudden drop in the US price of gold below US$1100 /oz caught my attention this week and prompted me to do a little research on the historical price of gold in both US dollars and Australian dollars.

I found the results quite interesting and despite this week's fall I still feel reasonably optimistic about the gold sector particularly in Australian dollar terms, and probably in any currency other than US dollars. 

My curiosity regarding gold price history prompted me to undertake a little historical research which I will try and précis in the next few paragraphs.

In order to prepare for economic order in a post-war environment, 730 delegates representing 44 nations met at the Mount Washington Hotel, at Bretton Woods in New Hampshire, USA over the period 1 - 22 of July 1944, in what became known as the Bretton Woods Conference but which was formerly called the United Nations Monetary and Financial Conference. The goal was to aid political stability and foster peace after the end of WW II.

An agreement was signed on the final day of the conference and came into effect in 1945 following ratification by sufficient number of countries. The conference also led to the formation of the International Monetary Fund (IMF).

In essence the Bretton Woods agreement led to the fixing of currencies to the gold price with the US dollar pegged at $35 per ounce of gold.

The Bretton Woods agreement lasted for 26 years until, under the presidency of Richard Nixon, the United States, on 15 August 1971, unilaterally terminated the international convertibility of gold in what became known as the "Nixon shock".

Although intended to be a short term measure, it eventually lead to the abandonment of the gold standard for currencies. By 1973 the US dollar had been devalued to $42.22 per ounce. In October 1976 the US government rewrote the definition of the dollar to remove all reference to gold and from this point onward the international monetary system was based on pure fiat money.

In the brief period between the Nixon shock and the formal removal of the gold standard from the US statutes, the gold price had peaked at US$195 /oz and subsequently fallen to a floor of US$100 /oz.

The metal remained below US$200 /oz until August 1978, when it began its inexorable rise to peak first at US$660 /oz on 14 January 1980, falling back again to US$506 /oz in April of that year, before rebounding again to hit a peak of US$673 per ounce on 17 September 1980.

Its subsequent fall was about 40% slower than its rise and it reached a low of US$313.50 /oz on 8 July 1982, before rebounding at almost the same rate as its initial rise, peaking at US$486.50 /oz on 26 January 1983, subsequently falling again, at around half the rate of its precipitous fall two years earlier.

For the next 23 years gold traded in a range US$257.60 to US$486.50 with a mean somewhere around US$350 /oz.

In December 2005 the price finally broke above the 23 year maximum and commenced its run up to the 24 February 2012 peak of US$1776.40.

Whilst visually the rise looks dramatic in terms of absolute value, it is interesting that the rate of rise was only around 70% of that achieved in the late 1970’s and the absolute increase in percentage terms was actually 10% less, achieving a rise of 243% of the starting value compared with around 254% of that in 1978.

What is apparent, if one looks at the US dollar gold price chart, is that after the 1980 peak and 1982 trough, the metal price had shifted to a new trading range that was sustained for a significant period of time.

This shifting of ranges is not an uncommon phenomenon in commodities. The phosphate price for example experienced a similar range shift between 2007 and 2009.

In April 2007 the rock phosphate price had been US$45.50 per tonne, a level at which it had traded at for at least the preceding six years. By August 2008 it had peaked at US$450 per tonne only to crash back to US$90 per tonne by July 2009. However it quickly recovered to be trading above US$100 per tonne by April 2010 and has more or less traded in a range US$125 to US$150 per tonne ever since. Anyone who has undertaken training in statistical process control will tell you, that that is more than enough data to establish that a shift in the operating range has taken place.

Whilst nothing about gold could or should be regarded as predictable, the trends of the early part of this century and the late 1970’s early 1980’s are similar, even if the exact rates of change and absolute increase in price differ. I therefore thought it would be an interesting exercise to extrapolate the available data to see what it might predict for the fortunes of gold.

Accepting that the fall in gold price might mirror the 1982 fall of 53% of the peak would suggest a low of around US$827 /oz, before a rebound of 55% to US$1284, followed by a fall again to around US$787 /oz, with another rebound to around the US$903 /oz level, which could represent a longer term average level.

At first glance this looks to be a less than rosy outlook and certainly one likely to discourage investors. And in US dollar terms I would certainly agree. But if one looks at these same key price points in Australian dollar terms a slightly different and more optimistic picture emerges.

Looking at the Australian dollar gold price chart over the same period provides a significantly different picture than that of the US dollar price chart due to the effect of the AUD: USD exchange-rate.

Whilst the initial peaks and retreats mirror those of the US dollar price, the peak in 1980 was followed by two higher peaks in 1986 and 1987, and whilst the price retreated in 1988, the changes in the exchange rate generally smoothed out the fluctuations in the US dollar price over the ensuing period up until 2005, making the fluctuations less pronounced.

The spike in the US dollar price in 2009, which appeared as a noticeable blip on the US$ chart appears grossly exaggerated in the Australian dollar chart.

Towards their peaks both charts have similar characters, but what is noticeable is that once the fall in the US dollar price starts to emerge so does the cushioning effect of the exchange rate. In fact one would have to acknowledge that over the past 12 to 18 months there is a clear disconnect between the trends of the two charts as our commodity dominated currency kicks in. So whilst the US dollar price has fallen 38% from its peak, the price in Australian dollars has only fallen 15%, a significant differential.

Beyond this everything is speculation. So for what it's worth, here is my speculation based on both of the Australian dollar experience of the 1970's and 80's and the current differential between the US dollar curve and the Australian dollar per.

I see the Australian dollar price bottoming out at around A$1110 /oz by March 2016 followed by a correction to around A$1350 /oz, 12 months later. A further retracement to around the A$1150 followed by a rebound to A$1550 is possible, and then a fall to A$1350 occurring by about April 2018. If the trend were to continue as it did in the 1980’s then we could see the Australian dollar gold price trade in the range A$1350 to A$1550 for a few years after that.

A large proportion of Australian producers have an all in sustaining cost (ASIC) of between A$1000 and A $1100 per ounce, suggesting that most will survive the bottom of the cycle. This is both comforting and logical, for whilst gold; because of its use as a store of wealth, is not a commodity driven by the laws of supply and demand, in its weakest times it should reflect the cost of production.

Mine is but one of many forecasts of the future gold price. The only thing certain about such forecasts is that most of us will be wrong and a few will be more or less right. The question for anyone involved in the sector is who is most likely to be correct?

I recall once having a conversation with Nick Holland, then CFO now CEO of Gold Fields when I was Australian Country Manager for that company.

We were musing on the predictability of the price of gold and I mentioned that as a student I had read a paper by an academic who had undertaken a research project trying to come up with a method of forecasting the price of gold. His conclusion was that one might as well peer into a crystal ball as try and predict the price of the metal, because he could find no model to do so.

Nick confided in me that Gold Fields had engaged a consultant to undertake modelling to try and predict the price of gold within a range. In this regard the project has been a success. The model predicted the price of gold at the time, to lie in the range US$200 per ounce to US $2000 per ounce! A triumph of accuracy over precision.


References:

https://en.wikipedia.org/wiki/Bretton_Woods_Conference
https://en.wikipedia.org/wiki/Gold_standard

http://goldprice.org/

Since I started to write a blog, I not surprisingly have become very interested in the work of other bloggers, in particular how they generate ideas for topics to write about.

This week I came across an interesting article by Kelly Exeter, titled “How to write a business blog FAST!”, which promised to show me a way to quickly generate blog posts. In fact the article suggested that it should take no more than an hour to write a post. That is certainly an outcome I would be happy to achieve given that my current commitment of time to these posts is considerably more than that!

My cynicism regarding the Kelly’s claim was reinforced when I saw the result of her worked example, which amounted to little more than five paragraphs, a total of 322 words! (This post is one of my shorter ones at 1005 words).

Nonetheless, I did quite like her concept for generating ideas, although I am less convinced with her guidance of providing three key points of discussion with respect to a single idea. In my view that is the approach that you take with the media but blog readers expect something more.

Because of my time constraints this week, this blog is shorter than some of my more recent offerings and after you have read it I invite you to provide some feedback and contribute your thoughts and ideas.

The concept that Kelly was advocating to generate ideas, was to brainstorm the five key issues currently facing your clients or the industry in which you work. I thought that this might be worthwhile exercise to undertake, so here is my take on the current status of the mining industry. I’ve come up with six.

I think that the issue affecting the most companies in the mining sector; rather than the most number of people, is the much talked about "Capital Strike". Many exploration companies have limited and dwindling funds, so long as investors, are not prepared to invest new capital in the resources sector, then the lifeblood of the industry's future, exploration, will grind to a halt. This is borne out by recent statistics on exploration activity. This has obvious implications for future production.

The second issue is also greatly talked about, namely the depressed prices of most commodities. Capital that might be inclined to invest in projects that are development ready or nearly so, are hesitating because no one seems to want to be the one that calls the bottom of the cycle.

One could argue that issues three and four are actually subsets of or at least drivers of issue two, however I will include them as separate issues.

For issue three we have the large official inventories of most metals that are hanging over the price of commodities like the sword of Damocles. Who knows how much additional inventory there is in unofficial stockpiles?

Issue four impacts on issue three and hence issue two. The demand situation for most commodities appears not to be improving. With China going off the boil and many other economies; other than the US, struggling to stage significant recovery, demand is depressed and hence the rate at which stockpiles are being drawn down, if at all, appears painfully slow. Hence recovery in commodity prices would appear destined to be a long drawn out process, maybe taking a couple of years.

My fifth suggestion for a significant issue facing the industry is innovative strategy, or the lack of it.

Whilst one can argue that saying “we will survive until times get better and we can raise more money to continue exploration”, is a valid strategy and support that with tactical responses that see the company hunker down and cut costs, including exploration. It is not exactly positioning the company for long-term success.

Although recent articles have suggested that M&A activity at the large end of town has, in many cases, produced poor results for the participants that does not mean that it does not have merit at the smaller end of the spectrum.

I would have thought that given the current circumstances some of the smaller players would look to combine their assets; cash and tenements and reduce their costs by having fewer people manage a larger number of assets. But it seems not to be happening.

Whilst I have no evidence for this assertion, I believe that the lack of such consolidation is either ego driven or motivated by a desire of directors and management to retain an income stream for as long as possible, i.e. as long as the cash lasts, regardless of the consequences for the company's shareholders.

I think that there is a sixth issue, the impacts of which, will not be realised until there is an upturn in the fortunes of the industry. This is the loss of experience from the industry, particularly technical professionals and operational management.

A lot of people have been made redundant over the last couple of years, many of them veterans of the industry who have been through many commodity price cycles during the course of their working lives and have accumulated a wealth of valuable experience.

We are all aware of the high salaries that were on offer during the peak of the boom and I have no doubt that a large number of experienced industry professionals will decide that they have sufficient savings accumulated, particularly over recent years, that they will take the opportunity of redundancy to call it a day and go and enjoy their retirement.

Whilst this may have no immediate impact, when the industry starts its climb out of its present malaise, I believe that it will find itself desperately short of the kind of experience that such veterans bring to the table. This will inevitably result in some companies re-visiting errors of the past due to their diminished knowledgebase.

So those are my thoughts. What do you think? Have I missed anything significant from the list? Have I got it completely wrong? I would welcome your thoughts.

When I saw the ABC news tweet regarding this week's Australian story on the Hancock dynasty, I couldn't help but take a look at the comments that had been made in response.

When I saw at Cristina’s @Crissy0180 tweet, I found that I could not resist replying. My response was as follows,”@Crissy0180 perhaps you might like to consider how many different minerals were complicit in your last tweet!” I can only hope that her lack of response was because she had given it proper consideration and agreed with the accuracy of my statement, but somehow I suspect that this is an optimistic interpretation.

It was not simply the fact that she was attacking the industry in which I choose to work but the sheer generality of her statement. She was not saying that this particular project should not go ahead because it will endanger the only known colony of Myrmecia species 17 (look it up, its real and I should know!), she was saying that all mining is bad and should not be allowed. Yet she is obviously totally unaware of the ramifications of those views. I don’t simply mean in terms of employment and the economy, I mean in terms of what underpins human existence as we currently know it.

Perhaps we should not blame Cristina for being so poorly informed about the role of minerals in our everyday lives. The industry has been slow to respond to the environmental lobby casting mining as the villain of the piece at every opportunity, rather than recognising it as the facilitator of mankind's development to its current state.

How often have you watched a TV show; particularly a children's TV show, where the villain is a mining company? Too many. TV shows and teachers have a big influence on the way that children perceive the world.


In part I see this as an inevitable consequence of much of Western society turning away from science and engineering towards subjects that are considered more contemporary, less "dirty" or perhaps more interesting, and in some cases, just requiring less effort on the part of the student, in my opinion.

Of course there is plenty of historical evidence for the damage that mining has done to the environment. But the same argument could be levelled against many other industries, it’s just that their legacy is less extant. Regardless of the industry they reflected the values and the standards of the day.

Certainly all the people that I know working in the industry have a very high regard for the environment and the industry's relationship with the communities in which we work, and would not tolerate the practices that were prevalent even 30 years ago, let alone 100 years ago.

In western countries at least, mine employees are well paid and well cared for. If you are looking for exploitation of workers and abuse of human rights, look no further than your local chicken processor.

I know that some of the Chamber of Mines and related bodies around the country, have recognised that many preconceptions that adults hold where moulded by the attitudes and opinions of the teachers whom they encounter in their formative years.  In response to this, they have made great efforts to try and educate teachers; in particular primary school teachers, not only in the importance of the industry to modern society but how mining manages the environment in those areas where it is active. I know from personal accounts how surprised some teachers are of the lengths that the industry goes to in order to mitigate its impact and in some cases, how it can be a vector for an improvement in particular ecological community, for example, by re-introducing a plant species that has been almost extinguished in the area. 

However, the various Chamber’s efforts alone are not enough. Whilst the importance of mining to the Australian economy is significant, it employs relatively few people. Each and every one of those people needs to become an advocate for the industry and challenge every misconception or incorrect portrayal of the industry.

Every time that we hear someone say that mining is destroying the environment and should be banned we should pull that person up and ask them exactly how they are going to manage without mining?

I suspect that they will not understand what we mean. So wherever we are, we need to ask them to stop and look around them, then ask them to explain how they are going to substitute for all the things that the mineral industry provides, the roof over their head, electricity to power the lights, their appliances and computers, cables to carry electricity, pipes that carry the water, the list goes on and on as we all know.

The reality is that the bulk of the population has lost touch with where things come from. I see it in as a similar challenge to the child who does not associate the glass of milk that it drinks with a cow in a paddock.

In the same way that we have to explain to the child the steps taken from the cow grazing in the paddock to the carton of milk in the supermarket, we have to explain to the naysayers of mining that they cannot enjoy their current way of life without mining.

Once we have established that our way of life is inextricably connected to the continuation of mining, we need to go further and explain that it is one of the most commercially risky undertakings that anyone can pursue. We need to tell them about the millions of dollars that are risked each year in searching for new mineral deposits and the low success rate in finding them.

We have to detail how, even when they are found, it still takes many millions of dollars and several years more to turn them into productive ventures, which we hope will make money depending of course, on how good the studies were that led to the development of the project and exactly where in the commodity price cycle we are.

Once people understand the amount of money that is expended in bringing a single mine into production, there may be less inclination to try and impose "super profits tax" during those, often a brief, periods when commodity prices hit new highs.

So I urge each and every one of you to become an advocate for the industry and make sure that people that you know or meet, clearly understand the connection between the lifestyle that they currently enjoy and mining that underpins it.

Finally, thank you Cristina for reminding me exactly why I am proud to be part of the mining industry.  

This week's post is part rant and part reflection. Let me explain. I will start with the rant.

As I have business dealings with overseas partners I decided; after a couple of rather poor quality Skype calls, that I needed to purchase a decent headset in an effort to get rid of the horrible feedback that seemed to accompany these calls.

After reading the few online reviews, I decided on the brand and model of headset that I wished to purchase and set about finding a supplier.

The lowest cost Australian supplier was Nanobyte Solutions from Victoria. However, when I attempted to purchase the headset the following morning, it appeared to have disappeared from their website and an exchange via their online chat service was most unproductive. They promised a couple of times to get back to me, they didn't. So I decided to go elsewhere.

Next stop was Speedy Shipping Sales (as you will discover the name is obviously ironic). The same product was a little more expensive from them, particularly when the courier delivery cost of $15.95 was included. However, they claimed to have it in stock and promised to deliver in 1 to 3 days.

I placed my order on Friday, 12 June 2015. The order was processed on Monday 15 June and I therefore expected delivery on Thursday 18 June.

Thursday came and went and I thought that I should follow up with Speedy Shipping Sales, so I jumped online and used their online chat facility. Jack, if that was his real name was on the other end and promised to get back to me with an email to let me know where my headset was. I received no email.

Monday 22 June came around and still no headset and no email, so back to online chat with “Jack” again. He was checking with their warehouse to find out where my order was. He would email me when he finds out. Again no email.

Tuesday 23rd of June, back to online chat with Jack. It appears that there had been a "problem" and they were having to source the product from their supplier in Sydney. He will provide details. He didn't.

Wednesday 24th of June dawns and I finally managed to get a tracking number for Star Track Express (yes, another ironic name as it turned out)

By now I had rather low expectations. The tracking advice tells me that the item was picked up on Tuesday 23rd and was expected to be delivered on Monday 29th, so the full five days that Speedy Shipping Sales caution could be required to move a package from the eastern States to WA.

On Monday I re-check the tracking status and notice that they apparently tried to deliver my package on Friday, but that delivery was unsuccessful because the premises were closed. Now I was at home all day on Friday and there was certainly no attempt to make a delivery of any kind.

When by the end of Monday, I had still not received my headset I checked the tracking advice once more, only to find out that they had apparently attempted to deliver it again and once more has been unsuccessful because the premises were "closed".

I am normally a tolerant person but on reading the tracking history and knowing that there had been no attempt to make a delivery on either occasion because I had been on the premises throughout the period when delivery was alleged to have been attempted, I became rather incensed and looked for and found their feedback page and registered a complaint.

For the first time I actually received a prompt response, with Star Track Express acknowledging my complaint the following morning.

At about 2:10 PM on Tuesday, 30 June 2015, my headset finally arrived, a full 12 business days after I placed the order!

What conclusions have I drawn from these events?

Firstly, I will never ever purchase anything again from Speedy Shipping Sales, and would strongly advise others against doing so as well.

Secondly if I can possibly avoid using Star Track Express, I will do so. Australia Post’s Express Parcel Post would have guaranteed next day delivery for $10.20. Instead it cost me $15.95 and took five business days.

But the real issue at the core of this farce, is the appalling level of customer service, in particular the lack of communication.

If Speedy Shipping Sales had contacted me as soon as they knew that their warehouse was out of stock and that they would have to supply directly from their supplier, then I would have known to expect a delay. I may not have been entirely happy, but at least I would appreciated their keeping me informed.

Similarly if "Jack" had kept his promise and emailed me; even to say that he was having difficulty getting an answer from the warehouse, then I would at least have understood that he took my query seriously and was trying to do something about it.

It appears that some companies mistake the immediacy of online chat facility to answer questions for real communication and customer service.

Star Track Express have promised to investigate my complaint. Whether they decide to share the result of the investigation with me is another matter. In any event I expect that it will come down to a question of the delivery driver’s word against mine. A no-win situation.

I have to say that in my experience poor customer service; at least in Australia, is not that uncommon. Whether it is sales representatives; like those above, who fail to follow up on actions or the waitperson at a restaurant who seats you at a table and then forgets about you, the occurrence is widespread. In the latter circumstance I have simply got up and walked out to the restaurant.

How is this relevant to the mining industry?

Well particularly relevant to me now that I have joined the ranks of the service providers rather than the client.

I have always tried to make sure that I stayed on top of communication, no matter what the medium. Whether it is responding to someone's email or a voicemail on a message bank, I always try and follow up promptly, even if it is just to let the other party know that I have received the message and will give them a response later when I have time to do so. This confirms to them that I have received their message and it is my intention to do something about.

As a client I have always appreciated those consultants who have called to advise of the progress of the work that they were undertaking for me and particularly if they were likely to be late in meeting a deadline. Whilst I may not always have been happy with this news, I certainly appreciated being told so that I could try and work around their deferred schedule, or at least let those that I reported to know that there was going to be a delay.

Of course mining companies have internal customers and service providers too and the need for communication is no less relevant to these relationships than it is with third-party providers.

Many of us have heard talk of "silos" within operations or within companies. Whilst some of these silos can be the result of one person's ego trip isolating their department from the rest of the operation, in many cases it is merely the absence of effective communication.

Again there can be misunderstandings as to exactly what “effective communication” is. In my view, it is not merely the exchange of words and information, it is making sure that the information provided meets the needs of the other party and enables them to do their task effectively. So unless you take the trouble to ask exactly what the other party needs in terms of information, then you are not communicating.

So for those of you who diligently follow up on the various communiqués that you receive during the course of the working day, congratulations, keep up the good work.

For those of you who are inclined to leave things for tomorrow, or perhaps a day after, perhaps you should consider your approach. It can be as simple as setting aside half an hour a day to deal with correspondence. But make sure that you actively follow up on the actions that you commit to.

For those who are interested, the headset is a Plantronics Blackwire C720, and I am very pleased with my purchase. Indeed together with Dragon Naturally Speaking, I used it to write this blog!