Articles

The DRA Group – Well prepared for the growth ahead
This article first appeared in Mining Review Africa

DRA, long established in the mining sector as a builder and operator of successful processing plants, has over the past 18 months not only progressed its mining division significantly but has also reshuffled its management team to facilitate a structured and well planned transfer of management responsibilities, completing the company’s eight year succession program.

Leon Uys, group managing director for DRA, indicated that the company’s strategic and corporate focus is currently on two priority areas - to ensure that succession planning at the company enables it to adhere to, and build on, its past achievements; and to accelerate the globalisation process that was started a few years ago.

The changes recently introduced were executed from within with current and experienced board members being re-appointed to create an integrated and focused management structure. Angus Fynes-Clinton is now the new managing director for DRA Mineral Projects and Chiel van Niekerk the managing director for DRA Mining while Paul Thomson remains the managing director of Minopex.

The company has recognised the importance of identifying and mentoring younger talent for management positions in order to retain the core values on which the company’s growth is based. The succession strategy was initiated about five years ago and incorporated the appointment of young engineers onto the various subsidiary boards. The founding members of the company are committed to remain in the Group to ensure the successful transfer of knowledge and proven practices.

Recently, DRA Mining was introduced as the third leg of the DRA services delivery profile, complementing DRA Mineral Projects and the well-established operations and maintenance services offered by Minopex.

The restructuring has also freed members of senior management to dedicate themselves to DRA’s globalisation drive. While it is expected that Southern Africa will continue to be the major contributor to its business for some time to come, globalisation will expose the company to different project development cycles and currency incomes. Says Uys, “Initially globalisation will be seen as an extension of the South African operations, with its technical centre remaining in Johannesburg, supporting decentralised project and construction management offices around the world. This is how we plan to share our extensive database, mitigate the risks and retain the capacity to deliver on projects.” The company has established a global footprint from where its growth objectives will be accelerated.

In the Far East Region, DRA has set up offices in Perth and Brisbane to handle projects in Australia and Indonesia while its office in Beijing oversees projects in China, mostly coal related dense media type process plant projects. To avoid spreading itself too thinly, DRA’s longer term goal will be to staff offices with predominantly local expertise and to further create design support centres in countries such as India and China.

The company currently operates a design office in India to provide detail drafting services. The recent award of a study for a coal washing facility for Tata Steel will enable DRA to enter the next stage of project management. DRA’s Canadian office in Toronto was recently awarded an EPCM contract for a nickel expansion project in Brazil and the company is looking at facilitating further growth and inroads into the South American market.

DRA sees Africa as a key area for its expansion. Having already established itself in Botswana, it has recently registered entities in Mozambique, Zimbabwe, Tanzania and Zambia. “We are now taking a bold step into West-Central Africa, where we see great potential in a variety of minerals. We are currently managing a variety of projects in countries North of the Limpopo,” says Uys.

The company is currently undertaking a turnkey project for Perseus Mining on its Central Ashanti Gold Project in Ghana. Construction is well advanced and completion is set for mid-2011. DRA and Minopex are also forming business entities in Tanzania in anticipation of uranium and gold related work in that country. Shanta Gold in Tanzania is another contract in which DRA is playing a role and it is also executing the feasibility study for the Mkuju River Uranium Project for Mantra. Says Uys, “In light of our current contracts, we have embarked on a cautious but definitely aggressive approach into Africa.”

The company is also expanding its operating capacity as it ventures into new markets and new destinations in an effort to mitigate risk for clients. The combined strengths of DRA Mineral Projects, DRA Mining, DRA Technical Services (a niche outfit specialising in winder refurbishments and repairs), Quality Laboratories, a SANS 17025 accredited quality laboratory service and DRA’s specialist electrical engineering capacity as well as its purchase of Holley and Associates to give it a strong civil, structural and infrastructure capacity, place DRA in the enviable position of being able to offer a total solution to the mining and mineral processing sector.

DRA utilises the services of sister company and plant operator, Minopex, to assist with the commissioning of process plants irrespective of whether Minopex will gain a contract to operate them or not. This shortens the ramp up time and improves the net present value (NPV) of projects. The feedback of the process plant operation into the plant design offers DRA a competitive advantage. Minopex operates 8 platinum concentrators responsible for the processing of a total of 18 mtpa of ROM ore, accounting for the production of 1.2 million ounces of PGMs. In 2011 it will also be responsible for the processing of some 22 to 24 mtpa of coal.

The development of a mining division together with DRA’s other strengths in minerals processing, infrastructure and operations management means that the Group can offer clients a full suite of mineral project development services from the management of exploration programmes to the operation of process plants. Its mining division has grown from 20 people two years ago to some 140, and according to its MD, Michiel van Niekerk, the company has become a strong competitor for project work in the mining sector.

In the past, DRA’s mining division mostly undertook engineering and the management of equipping projects for mines, but more recently has become involved with mine design and mining project development. The company purchased boutique mine design and consultancy group, Lower Quartile Solutions, in 2009. Says van Niekerk, “We are now self-sufficient in mining projects including resource development and exploration drilling management.”

Van Niekerk says that DRA has been successful over time because it is conservative in its approach. “As much as some people within the company may not like to hear that, this is so, and we have been conservative in the management of our cash reserves. We also turn down work if we are not confident we have the capacity do tackle it at the time.”

Even while expanding, DRA weathered the global recession better than many of its competitors. Angus Fynes-Clinton, MD of DRA Mineral Projects, attributes this to a variety of factors. “It helps that we are an employee-owned engineering company run by engineers and we have, through the recession, benefited from our well-established track record of successful project delivery and contractor of choice status in the industry. We are recognised for our successful EPCM projects where we deliver fit for clients’ purpose, as promised, and typically within budget and on time.”

This is reflected in the fact that a number of DRA’s clients bring repeat business, and during the 27 years of the company’s existence there has never been cause for litigation. DRA’s client base consists of most of the major and mid-tier mining houses operating within Africa and the world and current assignments include contracts for groups such as BHP, Impala Platinum, Lonmin, RIO Tinto, Northam, VALE, Aquarius, Xstrata and Anglo American upon whose Tier 1 contractor list DRA appears. The company’s innovative engineering solutions; its win-win approach to contracting methodologies; and project implementation strategies also attract a number of smaller and emerging mineral owners. “The project environment is a stressful one, but when a dispute occurs we resolve it with our client,” says Uys. “When the project is finished we ensure that there are no surprises.” The company is very selective about whom it employs and makes sure new employees fit in; the corollary is that DRA is seen as an employer of choice.

As an engineering-orientated company, DRA employs some 240 engineers on its staff of 900 in South Africa. Of these, 81 are registered professional engineers. Prior to the recession in 2008, the company employed 800 people, indicating its subsequent growth. DRA has another ±70 people located at its global offices. Minopex accounts for another 1,800 people located throughout Southern Africa.

Platinum has for some time been DRA’s perceived field of dominance and true to form. DRA’s recent projects include the successful completion of Pilanesberg Platinum Mines’ project in South Africa’s North West Province as well as the hot commissioning of the Unki concentrator and completion of Ngezi Phase I, both in Zimbabwe. It is now managing the implementation of Ngezi Phase II and is undertaking the study for the planned Phase III expansion. DRA has been appointed to manage the development of a new platinum project in the Pilanesberg area for an emerging Canadian client. With mining companies watching their cash flow, there have been a number of smaller optimisation and de-bottlenecking brownfield projects which have seen the company involved in some 24 PGM projects over the past two years.

Uys says that the reduction in platinum projects has allowed DRA to re-direct resources into other commodities including coal, its other main area of sector dominance. DRA has successfully managed the development of both the Phola Project for Anglo Coal and the Douglas Middleburg Optimisation Project for BHP Billiton. It has also won work for smaller coal producers, typically inclusive of the design and construction of washing plants, for Keaton Energy’s Vanggatfontein Project, Umthombo Resources’ Hakhano Project and the Total Coal Dorstfontein Project. During 2010, DRA Moçambique LDA was established and it is currently undertaking elements of the Phase II material handling and surface infrastructure work for Vale’s Moatize Phase II expansions. DRA has also built four coal plants in China in as many years.

In the nickel sector DRA completed Phase II and Phase II b of the Nkomati Nickel Project which was the result of a five year presence on the mine doing study and project implementation work.

In iron ore DRA completed the Khumani Iron Ore Project (BKM) Phase 1 up to 10 million tonnes per annum (mtpa) and is currently managing the expansion to 16 mtpa. The new crushing facility for the project was completed at the end of November 2010.

DRA has also been appointed to manage the implementation of the AK6 Diamond Project in Botswana. In Zambia, DRA has a contract for managing the development of the mine and process plant at Vale and ARM’s Konkola North Project. It has performed work in the Democratic Republic of the Congo (DRC) for Chemaf, establishing a new crushing, scrubbing and DMS pre-concentration plant. It has also completed a small modular processing plant for the Kipoi Project in the DRC and is completing studies for ENRC on copper concentrators.

DRA Mining was recently awarded the BRPM Phase III N Shaft’s EPCM project for the Anglo Platinum Royal Bafokeng joint venture, and it is managing the “total solution” at Booysendal for Northam. This EPCM contract covers the original BFS and includes mine design, infrastructure and the process plant. DRA Mining is also managing the 6^th decline shaft at Aquarius’s Kroondal operation and recently completed a successful shaft conveyor system upgrade at Mimosa’s Blore Shaft.

Adds Uys, “Clients have been cautiously optimistic during 2010, setting themselves up through the completion of a number of studies to step in and develop projects once hurdles have been crossed. We are bullish and are positioning ourselves to be there when this occurs.”