Worley’s acquisition of Jacobs Engineering Group’s Energy, Chemicals and Resources division (Jacobs ECR) in April this year has not only resulted in Worley (previously WorleyParsons) doubling in size but has also hugely strengthened what was an already formidable capability and footprint in the mining, minerals and metals space. This was a key point that emerged from recent discussions between Modern Mining and Worley’s senior executives, Nick Bell and Denver Dreyer.
Impala Platinum’s 20 Shaft on the Western Limb of the Bushveld Complex (photo Implats).
Bell, who is based in Brisbane, Australia and is Senior Vice President Business Development and Global Sector Lead Mining, Minerals & Metals (MM&M), says that the US$3,2 billion Jacobs ECR transaction has resulted in the Worley Group becoming arguably the pre-eminent global provider of professional project solutions and asset management services in the energy, chemicals and resources sectors, with a total employee complement of around 58 000 across more than 50 countries. He also notes that Worley’s mining business is now about five times the size it was before the acquisition.
“Prior to the acquisition, WorleyParsons was already a major player in mining and a clear world leader in certain areas such as the design, engineering and execution of deep shafts,” he says. “What is perhaps less well known is that Jacobs ECR, best known for its dominant position in petrochemicals, was also a formidable player in mining, with a strong and long-standing relationship with a number of Tier 1 mining customers. The combination of the two companies has now resulted in a mining business that is probably without equal in the world in terms of its capacity and capability.”
Dreyer, Senior Vice President Mining, Minerals and Metals – Europe, Middle East and Africa, points out that the merger involved two businesses which were largely complementary in nature, particularly in respect of mining. “There was only a limited overlap between the mining businesses of the two parties when they operated independently. Geographically, WorleyParsons was strong in Australasia and Africa while Jacobs ECR had a well-developed footprint in the Americas and was clearly the dominant player in the Australian mining and minerals industry for major projects,” he explains.
“Similarly, WorleyParsons had world-class expertise in areas such as shafts and underground development while Jacobs ECR was known for its experience in base metals concentrators and mass materials handling systems for both surface and underground operations, just to take a couple of examples. The combined group brings together all these skills and geographies under the Worley name.” Dreyer adds that Worley’s Johannesburg office (where he is based) remains one of the group’s Global Centres of Excellence for mining.
While Worley services all areas of the MM&M market with its customers ranging from juniors through to the ‘blue chip’ mining giants, Bell sees the latter – the Tier 1 customers – as being critically important to Worley. “These are the customers with whom one can develop long-term relationships, becoming their partner in delivery over multiple projects across a range of commodities and minerals provinces,” he says. “This has been a core part of our business in the past and we see this continuing in the future.”
One major trend that Bell identifies in the MM&M market is an ever-growing emphasis on sustaining capital investment as mining companies look to extend the lives of their mines, improve the efficiency of existing operations or replace assets which have reached the end of their lives. “We’ve seen this trend developing over the past several years and revenue from projects of this type now represents about 50 % of our global MM&M Services business – it’s an arena that Worley plays in very strongly. An example of what I’m referring to is the Pilbara region in Australia where the major iron ore companies are building new mines to replace operations that are no longer economic. They’re not producing more tonnage – they’re investing to stay in business.”
Bell adds that the work generated for Worley by sustaining capital investment by mining companies lacks the ‘glamour’ associated with the implementation of new greenfield capital projects but nevertheless provides a steady – and growing – revenue stream and the opportunity to build sustainable relationships with customers.
A second trend that Bell identifies as an opportunity for the company is the ‘migration’ of open-pit mines to underground operation as surface resources are depleted. “Essentially, what we’re talking about is the development of large-scale block caves and sub-level caves. Examples of projects of this type are the Venetia Underground Project (VUP) in South Africa, the Chuquicamata underground copper mine in Chile and the Cadia East mine in Australia, in all of which we’re involved. We have been able to bring our global resources to bear on these projects, which are notable for their size and complexity.”
According to Dreyer, the global footprint of Worley – now further enhanced by the merger – has been hugely beneficial to the South African operation. “Activity in South Africa’s mining sector has been subdued over the past several years, but we nevertheless remain extremely busy, providing support to Worley’s execution projects globally,” he says. “This involvement is also extremely positive for our people, who have the opportunity to participate in major projects around the world.”
On the subject of expansion into the African mining market, Dreyer is of the view that the continent has the potential to be a major growth area for Worley. “We are keen to operate throughout Africa. We are already active in many African countries and we would like to further grow our footprint across the continent. We see particular opportunity in commodities such as lithium, nickel and graphite which are going to be increasingly in demand as the global transition to ‘greener’ sources of energy gains momentum,” he says.
Interestingly, Worley’s two biggest current or recent mining execution projects in Africa are at opposite ends of the continent. In South Africa, the company is the EPCM contractor on De Beers’ VUP, which is taking the Venetia diamond mine underground, while in Morocco it has just completed the Beni Amir phosphate beneficiation plant for the OCP Group. This is a complex project which has not only involved the construction of a 190 km long pipeline which is the longest of its type in the world but also has linkages to upstream and downstream projects being executed in parallel.
Although the MM&M line of business only accounts for about 10 % of Worley’s global revenue, the African operation, controlled from Johannesburg, is still mainly engaged with the mining market. “Mining is the source of about 80 % of the revenues generated by the Johannesburg office,” states Dreyer. “This is changing, however, and energy, chemicals and petrochemicals will be increasingly important to the African business. We’ve already scored some big successes in these fields in Africa, including the 310 MW Lake Turkana Wind Power (LTWP) project in Kenya, the largest in Africa, which has just been officially launched. Worley was responsible for both the project and construction management.”
Dreyer makes the point that high ethical standards and transparency are core values of Worley and mentions that the group is working closely with Transparency International (TI) to develop more transparency at the front-end of the mining process, especially in emerging economies. “We’re rolling out workshops both here in South Africa and globally which will address this issue, highlighting some of the experience we’ve gained over the years,” he says.
Finally, and moving to the subject of the digital transformation of mining, Dreyer notes that Tier 1 mining companies are increasingly demanding digital platforms to plan, engineer, construct and manage their projects. “Fortunately, Worley is one of the world leaders in this field, in part due to the efforts of the Johannesburg office, which has been one of the pioneers of the concept of the virtual or digital mine,” he says. “We can now offer our clients truly cutting-edge technology. We see this digital ability giving us a clear competitive edge as we move forward.”
