Published in March 2006 Australian Longwall Magazine
Mastermyne began life in 1996 as a company installing conveyors but by 1997, with few companies offering specialist skills in the area, it had expanded into longwall moves and installations.
At the time, no contracting company was providing the total service – a niche Mastermyne was able to fill.
Its first major job was the plum new longwall installation contract for then Shell-owned Moranbah North mine, and Mastermyne went on to carry out face relocations of the mine’s next four blocks.
As turnkey projects, Mastermyne has undertaken more than 12 longwall moves and has offered a range of services in a host of other moves.
Being a contractor undertaking longwall moves is tricky. Forward planning is almost impossible, as mines rarely know exactly when moves will launch.
A longwall move contractor also needs to keep on his books a trained core of up to 60 specialists ready to be rapidly mobilised any time from three weeks to three months. But it is generally perceived as outbye work, and attracts less attractive pay rates for employees.
For Mastermyne, the expansion of the industry and the increased difficulty of manning its workforce eventually necessitated a shift to driveage contracts.
This has meant the company can offer better paying work on longer-term contracts with more attractive rosters.
In 2005, Mastermyne had around 130 permanent employees; this has grown to more than 230 in early 2006 with the company recently completing a successful recruitment drive in the UK.
Fifteen experienced English miners were recruited and are currently being introduced to Mastermyne’s operations throughout Queensland and NSW.
The company currently has four major primary driveage contracts underway: mains and gateroad driveage at BHP Billiton’s Crinum East and a mains driveage contract at Rio Tinto’s Kestrel mine.
The company won its first contract in NSW last year and is carrying out mains driveage in a recently reopened NSW mine.
All of these are on schedule and on budget.
Underground coal mining contractors come and go, as recent history attests with the demise of Henry Walker Eltin and Allied, but Mastermyne’s continuing success and growth, in what is universally known to be a tough market, is surely a testimony to doing something right.
A key operational focus is driving down delays of all kinds. Supplies are carefully coordinated to face crews for example, to ensure work is not delayed due to something small missing.
Equipment is maintained to an extremely high standard – not historically a contractor’s perspective. “We are told we over-maintain our equipment and we believe it’s the best- maintained diesel fleet in the industry,” said company co-founder and director Andrew Watts.
Mastermyne’s equipment fleet includes two ABM continuous miners, one shuttle car, seven Juggernaut loaders, eight Eimco Loaders, six PJB personnel carriers and three complete conveyor systems along with a suite of attachments and miscellaneous equipment; both utilisation and availability ranges from the mid 90s to 100%.
Project management is tightly managed to very high standards.
“By driving down delay times you give people the opportunity to achieve, thus introducing a competitive culture,” Watts said.
The nature of the company’s contracts is set up on a risk-sharing basis, an approach pioneered between Kestrel mine and Mastermyne some five years ago. This is a model that has since been adopted by other underground contracting companies.
Traditionally, contracts often contain onerous conditions that require the contractor to take on all the risks related to strata control, water management, occasionally even downtime of company-supplied equipment. Mastermyne structures its contracts in a way that minimises risk to Mastermyne and the client by jointly developing KPI’s and working together to achieve a common goal.
This enables both parties to focus on the operational aspect of the project rather than the contractual aspect. The key to these contracts being successful is in the relationship and initial set-up; both parties need to understand the model and be committed for it to work.
A typical contract proposal can contain detail of up to 1200 line items – or tasks – that need to be completed during a project.
Each of these is then aligned to a price book and extrapolated out to reach a contract sum. Mobilisation, for example, may consist of 50 sub-tasks that ensure the company can track how long each task takes and what it costs.
This approach demonstrates to the client a depth of knowledge by Mastermyne of the environment the contractor is going into, Watts said.
This means on at least a weekly basis, Mastermyne knows where a project is in relation to cost and schedule. It also simplifies contract management
Some contracts incorporate an incentive scheme – if Mastermyne over-achieves or under-achieves on a job, a portion of the overrun/underrun cost may be at risk.
So how does the company perform?
At Crinum, driveage units have been averaging 15m per shift for the last 10 months and have had a best of 45m on a shift. (Watts is quick to point out that the focus is not on records but rather on standards and systems.)
The company has been doing contracting work at Kestrel mine for seven years, Okay North for five years and Moranbah North for five years.
“Our philosophy when we go into an operation is to try and ingrain ourselves into that mine and make ourselves indispensable. As we take over more work, we take away more headaches from the mine owner,” Watts said. “Also we offer practical solutions.”
Most current contracts extend out two years and more.
The company is well positioned for growth having secured the backing of private equity fund manager CHAMP Ventures last year.
“We look to back a management team that can grow value,” said CHAMP manager James Wentworth of the fund’s reasons for investing in the contractor.
“Mastermyne has a great range of blue-chip clients, great OH&S record and importantly, makes good margins in this industry.”
