Managing director Roger Trundle said the company would pursue further opportunities from an expected increase in activity in the coal, iron ore and base metals sectors as the world economy strengthened over the next two years. However, rapid growth was not on the agenda for Thiess’ mining arm, which accounted for about 50% of its $2.4 billion order book.

Trundle said the company’s strategy was to maintain its position with long-term clients, while seeking modest growth in its core skill areas domestically and internationally. With repeat business levels at 80%, he believes understanding customer needs and providing a high level of value adding service are critical.

“We have to ensure that we remain competitive in the full suite of services that we provide, that we continue to deliver innovative mining solutions through the implementation of leading-edge technology, value engineering, proven workplace practices and excellent safety and environmental performance, to allow our clients to remain competitive in the markets in which they operate,” Trundle said.

“Retaining our position on existing projects is a primary objective. In addition, there are a number of new opportunities — both brownfield and greenfield — emerging in Australia, Indonesia and South America, and we are positioning ourselves to secure further work in these locations.”

Thiess is continuing to target coal projects in New South Wales, Queensland and Indonesia. In Western Australia, it is working with Portman Mining on the expansion of the Koolyanobbing iron ore mine in addition to other iron ore prospects in the Pilbara. With an office established in Lima, Peru, Thiess believes it is well positioned to capitalise on growth in gold and base metals, particularly copper, in South America. Current projects include BHP Billiton’s Tintaya copper mine and Newmont Mining’s Yanacocha gold mine, both in Peru.

International projects now account for more than 30% of Thiess’ mining operations.

“All in all, it’s a question of timing,” Trundle said. “Growth in coal, iron ore and base metals won’t occur simultaneously, but I believe we’ll see stronger demand over the next 2-3 years as the global economy recovers. We hope that with the services we provide, the skills we have developed, our commitment to safety and the relationships we have both onshore and offshore, we’ll be a part of that growth.”

Thiess will continue to invest in selected projects and currently holds equity in three coal mines: North Goonyella (40%) and Burton (5%) in Queensland, and Southland (10%) in New South Wales. “The main benefit derived from these investments is that we become a full project partner, which allows us to provide a more effective service to the operation and, hopefully, extend the life and value of the mine in the process, providing benefits to all project participants,” Trundle said.

“Alliances, partnerships and open relationships are very much in keeping with our business philosophy in the mining sector and elsewhere. It is an important and growing feature of our business and one that provides strong alignment of objectives to optimise project outcomes.

“Our financial strength supports our ability to commit substantial funds to the development and operation of mining projects as well as selective equity investments.”

Trundle believes the contract mining business will remain tough and that there will be further rationalisation of the industry, despite relative stability over the past 18 months. Competition in the provision of contract mining services had been “extreme in many circumstances, driving margins to a point that are not sustainable”, so something had to give. This pointed to the likelihood of mergers, acquisitions and joint ventures, however, Trundle saw no deterioration in the level of competitiveness in the marketplace.

The debate over owner mining versus contract mining was here to stay, he said.

“There will always be circumstances where companies elect to outsource mining services and there will be other companies who will elect to undertake those services inhouse. However, when you consider the expertise, finance, resource flexibility and innovation that external operators can offer, I believe there is a strong case for outsourcing.

“For organisations such as ours, survival is a pretty powerful incentive to stay at the leading edge of industry skills and technology.

“That’s not to say that owners, when they do that work themselves, aren’t skilled and don’t have a high degree of competence, but the same drivers don’t apply.”