The market

From your company’s point of view, where is the coal industry in the current cycle? Has it peaked and will we start to gradually return to lower prices and mine shutdowns, or is there still some upside left in the current market? What are your forecasts: immediate, a year from now and longer term?

Our company believes the worldwide coal industry will continue to grow for several years. The major driving force is the emerging economies of China, India and Latin America. As long as a worldwide free market economy is allowed to thrive, worldwide demand for energy and raw materials should grow substantially.

Although the US may not be directly involved in supplying raw materials to the world, the demand for all US products to satisfy the needs of these developing nations increases and therefore our own energy needs increase as well. We believe worldwide development will keep local demand high and prices stable to higher for at least five years.

The second possible driving force in coal (specifically in North America) is the growing interest in gasification. Due to political instability and trouble in the Middle East, we believe there is more interest than ever in decreasing energy dependence on foreign oil. This is a wild card that has the potential to grow the US coal industry for many years to come as now we are looking at a huge new market potential.

How has the recovery of the coal market over the past few years changed your business?

We have seen the need for good consulting expertise rising over the last two decades even when times were not good as fewer companies are keeping specific expertise on staff. But when times were bad, many projects were related to cost cutting.

Today, as the coal market has recovered, most projects are related to increasing equipment capacity or increasing reliability and availability. When project goals shift to reliability, specific expertise requirements also increase.

What percentage of your consulting work is done for locally owned companies versus offshore? What are the top three foreign locations for your company?

Our business mix is currently about 60% North America with the international work growing every year. Currently, our top three countries outside North America would be Brazil, Chile and Australia. Next year, we believe Peru, Columbia, China, India and Indonesia will play larger roles.

Several consulting companies have moved into other technology areas including coal mine methane, coal gasification and others. Please comment on what varied areas your company has moved into and the future growth areas for consultants.

Our primary business expertise is material handling by belt conveyor. But we are expanding into the more general area of bulk material behaviour. Bulk materials are not easy to design around as they do not act like a solid or liquid and mathematical techniques are just now coming out of academia that can accurately predict bulk material behaviour.

As bulk materials flow from mining to transport to storage to transport to processing to transport to utilisation, tremendous efficiencies can be gained by optimising handling and intermediate equipment. Today, “Virtual Prototyping” of traditional problem areas which cannot be physically prototyped or laboratory tested can lead to significant overall mine and plant gains in reliability and availability.

We believe this trend is so significant, we started a second company (Applied DEM, Inc) to specifically work on the challenges of developing more accurate design tools and methods.

Another area we have expanding into is longwall equipment design, testing and manufacturing audits. Although we believe most manufacturers are competent, clients often need consultants to fill expertise gaps as insurance to insure the products are designed and manufactured to fulfil the intended purpose.

An engineer without specific skills in longwall shields will not know what questions to ask or what is important to the process. And since shields are only purchased on a multi-year cycle, keeping expertise in-house is expensive.

Skills crisis

The skills crisis is a major issue affecting the coal mining industry and is increasingly the subject of corporate level remarks. How has your company been affected/benefited from the skills crisis?

This “skills crisis” as you call it, is directly responsible for our growth. But we believe the reasons for this “crisis” have only partially been identified. We believe the main reason is that our mines and our equipment have become tremendously more complex and will continue to become more complex every year.

This trend toward complexity is a topic of its own and won’t be addressed here but we believe the level of education and experience necessary today to design effective equipment that has become common in mines today is perhaps 10 times greater than it was 20 years ago.

This means a typical mining engineer who has...click here to read on.