Published in September 2005 Australian Longwall Magazine

Walter Mining was born with the demise of its parent company Walter Construction Group. Following liquidation of Walter Construction in early April, the profitable mining arm of the company was bought by a consortium of 24 of the company's previous management and staff and is backed by Helmsman Funds Management, a joint venture between Macquarie Bank and McGrath Nichol & Partners.

The new entity, Walter Mining, started operating on April 15, with no assumption of debt carried over from its parent.

While the mining arm was successful in its own right prior to Walter liquidation, its management has taken it from strength to strength in the past four months and is already forecasting revenues of $75 million for the 2005-06 financial year. The robust outlook is partly based on two significant contracts the contractor has picked up within the past few months.

In mid-May Walter moved its men out to Anglo Coal’s Moranbah North mine in central Queensland to begin a mains drivage contract. Walter is extending the mine’s main headings out to gain access to the next longwall block. The face equipment has been supplied by the mine, while Walter is supplying LHDs, man transporters and all ancillary equipment. The contract is scheduled to last 15 months.

The new contract was the second Walter had secured with Moranbah North; the contractor was already at the mine as part of a two-year contract mining coal through place change mining techniques. Once the second contract is in full force, Walter will have in excess of 100 men on-site at Moranbah North.

The second recent contract secured by Walter is another roadway drivage contract. Walter will perform main heading development at AMCI’s Glennies Creek mine in New South Wales’ Hunter Valley. Walter recently negotiated the early works contract and has had its men on-site since mid-July. The contractor is currently finalising negotiations with the mine owner to make the contract long term.

Like Moranbah, Walter will use the mine’s equipment on the Glennies Creek project, and the job will be manned by 45 people. Walter already has a crew permanently at Glennies Creek performing construction and maintenance of roadways.

The contractor is also in the process of negotiating a long-term contract for the installation and maintenance of underground conveyors at Glennies Creek. This is a significant part of the Walter business, with major projects having been completed previously at Mandalong, Dendrobium, and Tahmoor, as well as Glennies Creek

Roadway development has emerged as a significant part of Walter’s business, with four major contracts running concurrently. With 50 full-time management personnel and a workforce approaching 400 across both NSW and Queensland, it has the depth to effectively manage multiple projects.

Other jobs Walter currently holds includes roadway drivage and outbye sevices at BHP Billiton's Dendrobium mine in NSW, outbye services at BHPB's Westcliff mine, and conveyor installation work for Continental Conveyor & Equipment at Tahmoor Dendrobium and Mandalong. Walter has also installed conveyors at Xstrata Coal's Beltana mine and is recovering old roadways at the company's Baal Bone operation It also has a contract with Peabody’s North Goonyella mine for secondary support.

Since its inception, Walter has focused on its growing tunnelling division. The company owns a roadheader fleet consisting of six machines, half of which are flameproof. Currently, two are at work, one at the Newpac mine near Singleton, NSW, and one at a Queensland gold mine.

In line with expanding the tunnelling division, Walter recently appointed Peter Wilson to head up this division as general manager. Wilson brings 30-years experience to the company and has been involved in tunnelling and underground coal mining throughout Australia, New Zealand and the UK.

Walter has also recently added Phil McCarthy to its board, bringing a wealth of management experience to the company. McCarthy has been involved with the coal industry at all levels, including chief executive officer and managing director of Powercoal.

Walter has ordered four new Eimco LHD-ED7s, with the first two to be delivered in November and the second two in April next year. The new additions bring Walter’s fleet up to eight LHDs, seven man transporters and numerous drill rigs and ancillary mining equipment.

So, with business cruising along nicely now, has Walter Mining carried forward any stigma associated with the collapse of its parent company Walter Construction Group?

“At the time of the collapse, I was phoned by a senior GM of a major mining house and he said, ‘What the hell have you done to us – you have left us with no preferred option of where to go for major development contracts’. We were able to show him we could continue business as usual and we were able to keep every single contract going,” business development general manager Peter Roberts said.

Roberts attributed much of Walter’s success to offering clients project management, not just the supply of labour. “Effectively, what wins us the jobs is we manage the entire project, thereby alleviating the mine of the worry and hassle of having to manage it,” Roberts said.

Walter has also shifted towards an alliance style of contracting, where risk is shared. All four of the company’s latest contracts have been based on this sort of contract delivery.

“In the past, contractors have accepted a disproportionate amount of risk. That has led to poor outcomes and dissatisfaction for both the client and the contractor. Ultimately, contractors lose a lot of money or there are confrontations, lawyers and fights. Contractors are now saying, ‘That is no longer appropriate’,” Roberts said. And the industry is listening. A different method of contract delivery is now evident, whereby the contractor and the mine owner are working together to achieve the desired outcome.

Like most of its clients, Walter is finding it no easy task to source skilled labour. “We are in a constant recruitment drive. Success lies in having the staff on board before you win the contracts; therefore, we target project staff ahead of upcoming opportunities.”

Fortunately, Walter enjoys a very low turnover in staff, as evidenced by the fact that only one person left through the entire administration period.

“We had determined some time ago that in order to become the contractor of choice we had to become the employer of choice. People come to us because we have long-term contracts, we can offer work in any location, and we treat them well. We still believe in the adage that people should be able to enjoy their job.”

Walter has a training program in place to bring “cleanskins” through, an area Roberts said is important because “the industry just can’t cope with the current lack of skills”. Walter has also enjoyed tremendous success with its graduate program, with some of the best young project managers coming through that system.