The global resource boom that has sprung up in the past few years has caused rapid growth in the mining industry and left many a miner sitting pretty. However Runge manager of mine operations and engineering John Buffington said it was not all sunshine and roses for the industry.
“Seven to ten years ago we were in the times of gloom with respect to commodity prices and where things were headed,” Buffington said.
“A lot of the consulting work back in those days was with respect to cost cutting and optimisation – obviously now it’s all focussed on expansion.”
Buffington said an increasing number of mining companies were running multiple operations, resulting in a movement towards business process standardisation.
“We’re seeing a lot of growth for us in that across the board standardisation in the larger companies, of how they do their mine planning and that’s I guess a reflection of being able to react to the market quickly,” he said.
“It’s also a function of the severe lack of people in the industry and the need to have standardised systems so when people move around it’s easy for them to come up to speed.”
This bodes well for a company that has grown its suite of products to cover much of what a modern miner needs. Indeed, Buffington talks of some of the companies that have gone from the cradle through to production with Runge products.
Along with the rapid growth has come greater scrutiny of miners from regulators and the public, particularly in terms of environmental practices.
“We see a lot of requests with respect to greenhouse gas emissions and environmental sustainability and incorporating those as definite outputs in any sort of mine planning process,” Buffington said.
He said the mining industry was moving towards a greener future, with more companies getting involved in the production of uranium and coal bed methane gas.
Another trend that has emerged over recent years is the increasing use of mine planning and optimisation software. This has been brought about by a combination of improvements in the technology available and mining companies’ ability to invest in software to improve production.
“In the past, because of the vagaries and numerous parameters involved in any sort of business planning for mines, it’s been impossible to use truly optimised linear programming type solutions,” Buffington said.
“Technology is getting to where now we’ve got computers that can process data much quicker, and we’re getting closer to being able to use true linear programming/optimisation type solutions for certain aspects of mining.”
Buffington said that, far from competing with mine consultants, optimisation software was another tool that companies such as Runge could offer to provide a more complete service to their customers.
“It’s something that’s a fantastic opportunity for both us as consultants and for the mine owners and being able to truly get the most out of the resource that they have,” he said.
“We combine the use of our software products and third-party software products with our traditional advisory services.”
By including software as a part of its service package, Runge has been able to form longer-term relationships with customers. Buffington said an increasing number of mining companies were choosing to form what was essentially a partnership with Runge, using the company’s services at every stage of the mining process.
“We’ve been with customers that started off and assisted them with their exploration planning, done their geological modelling, done their feasibility work on a property, helped them to bring that property into the development stages and now provide software to them that they use in their day to day business planning,” he said.
“We’re kind of part of the furniture, and a true business partner, rather than just an individual task or service provider.”
Over the past 31 years Runge has built up its portfolio to include engineering support services, technology solutions and professional development learning solutions. The company plans to expand its customer base globally.
“We’re continuing to grow our business, both in Australia and overseas, and we’re focused on continuing that provision of the same sort of products and services that we provide, but in a global manner,” Buffington said.
The software and consulting company surprised some in the industry when it decided to list earlier this year.
That the company would want to go onto the Australian Securities Exchange was not that unusual – it was a path many other mining suppliers had already trod. What was odd was the timing. It seemed to be coming at a time when mining and mine supply stocks were unpopular.
In May, when the company released its float to the market, executive director Chris Larson admitted the timing was not as good as it could have been.
“It was all so easy when we started this about six months ago,” he joked.
Indeed, Runge hit the bourse running with its stock going on at $1.11, an 11c premium to the $1 a share it had been seeking in its initial public offering.
It also sparked something of a trend with several other mining industry suppliers such as engineer Emerson Stewart and ammonia producer Burrup Holdings looking to list.
Emerson Stewart made it to the bourse but Burrup Holdings pulled its float citing the company’s difficulties in getting gas. It has a contract with Apache Energy, which lost its main production facility on Varanus Island.
