Notwithstanding the downturn in South Africa’s mining industry, WorleyParsons RSA, the South African arm of the ASX-listed WorleyParsons project delivery group, has managed to maintain a healthy workload, with work from around the globe making up for the reduced level of mining activity locally. “We are the Mining and Minerals Processing Centre of Excellence within the wider WorleyParsons group,” says Denver Dreyer, CEO of WorleyParsons RSA. “This means that engineering work related to mining and minerals processing projects being undertaken by WorleyParsons internationally is channelled into our offices here in Johannesburg.”
Dreyer says the involvement of the South African company in global projects has huge benefits. “Apart from the fact that it has kept us busy through a long downturn, another major plus is the fact that our local engineers are getting exposure to some very exciting projects being executed in countries and regions such as Canada, South America, Asia and Australia,” he says. “This is extremely good for staff morale and means that WorleyParsons RSA can offer its employees a career path which is unequalled.”
Most of the engineering work that WorleyParsons RSA does for global projects encompasses the pre-execution phase. “Essentially, we’re working from the concept stage through to detailed engineering,” Dreyer explains. “Once a project moves into execution, then our involvement would normally reduce although we are still available to provide support as required.”
WorleyParsons RSA, of course, has its own execution capability and, over the past decade, has been involved – generally as EPCM contractor – in some of the biggest mining projects undertaken in the Southern African region. These have included Impala’s 20 and 17 shafts and the Bakubung and Styldrift platinum mines, all in the Western Bushveld, the Shondoni coal project near Secunda and a broad range of work at the Black Rock mine complex in the Northern Cape. North of South Africa’s borders, the company has participated in the Konkola Deep project in Zambia and the Kibali gold mine project in the north-east of the DRC.
Says Dreyer: “We’re actually coming out of an intense phase of execution and, given market conditions, the emphasis has now shifted towards study work as clients plan for the next upswing in the minerals cycle. Many of these studies will ultimately move through to execution and our goal is to continue our involvement into this phase. Based on the number of studies we’re doing, we see considerable activity ahead although the timing of an upturn still remains uncertain.”
WorleyParsons RSA’s flagship contract in South Africa at present is undoubtedly the Venetia Underground Project (VUP) of De Beers South Africa. The total cost of the VUP is approximately US$2,1 billion and it ranks as probably the biggest mining project currently underway in South Africa and indeed one of the biggest globally. It will extend the life of Venetia through to the 2040s and involves the sinking of two vertical shafts to a depth of 1 050 m, as well as the development of a decline system for trackless equipment. WorleyParsons RSA was responsible for the pre-feasibility and feasibility studies for the VUP and is now acting as the EPCM contractor.
“We are delighted to be participating in the VUP,” says Dreyer. “It is a very prestigious project and will keep us busy for several years yet. It is currently progressing very well and we have forged an excellent relationship with our client, De Beers, and with the main contractor for the shaft sinking and decline development, Murray & Roberts Cementation.”
With much of WorleyParsons RSA’s workload derived from the large ‘mining houses’ who operate internationally, Dreyer is quick to point out that the company considers the junior and mid-tier miners as crucially important. “There is sometimes a perception that smaller companies – and, in particular, the juniors – cannot really afford our services. This is quite untrue. We benchmark our fees regularly against our competitors, both big and small, and there is no question that we are competitive.”
Dreyer mentions that WorleyParsons RSA does have at its disposal systems and methodologies that are particularly well-suited to assisting juniors to assess and develop projects. “An example is StepWise, which is a financial and technical process model which enables exploration or mining companies to evaluate the financial and technical viability of their orebodies,” he explains. “It can identify risks upfront and also determine the optimum strategy for project development where there are multiple options available.”
He notes that StepWise – which was developed by Advisian, the advisory arm of WorleyParsons – can be of value to any mining company, from juniors through to Tier 1 players, but says it is of particular relevance to smaller companies moving from exploration into production, given that they generally need to limit upfront costs. “StepWise enables them to quickly and cost effectively get to the point where they can make a decision as to whether or not they should shelve or advance a project. It can also provide solid data which can be presented to prospective funders at an early stage in the project development cycle.”
As part of the WorleyParsons global group, WorleyParsons RSA operates in more than just the mining space. “Internationally, WorleyParsons targets the hydrocarbons, infrastructure, minerals, metals and chemical sectors and we do the same,” says Dreyer. “In the past, the minerals and metals sector has accounted for the bulk of the work done by WorleyParsons RSA but this is changing.
“If we look at hydrocarbons, East Africa – including Mozambique – has emerged as an important oil and gas market in recent years and this has already resulted in some significant contracts. In the infrastructure and energy fields, we are also very active. We project managed the recently inaugurated Nacala Rail Corridor Project and we have also had a close involvement with the Lake Turkana Wind Power (LTWP) Project in Kenya, which – at 310 MW installed capacity – is the largest development of its type in Africa. Here in South Africa, we see great potential in renewable energy although the short-term power surplus we now have in the country is inhibiting growth in this market.”
Turning to the transformation imperatives of the South African scene, Dreyer points with pride to WorleyParsons RSA’s Enterprise and Supplier Development (ESD) programme, in terms of which it is partnering with a number of black-owned Small and Medium Enterprises (SMEs) to jointly deliver services in the mining, water, energy and infrastructure sectors.
“We have no equity in these companies but we are supporting them in a variety of ways,” he says. “We are, for example, assisting them with branding, marketing, tendering, procurement and legal and financial compliance. We also provide mentorship, facilities and introductions to prospective clients. It’s a tough world for these SMEs and it helps if they can go into the marketplace and say, ‘We are small but we have the backing and support of WorleyParsons.’
“We need to create viable, black-owned engineering companies in this country and, for this to be achieved, there needs to be significant skills transfer. We have 13 companies in our programme at present and we are very pleased with the results so far, as many of the participants have experienced an encouraging growth in turnover.”
Dreyer notes that a recent initiative launched by WorleyParsons RSA is an Extended Consultant Programme (ECP). “This gives us access on a contract basis to acknowledged experts in the areas in which we operate and has, in effect, greatly extended the already formidable skills base of the company,” he explains. “We see the programme as a means of delivering highly skilled resources to our clients in a cost-effective manner.”
Finally, how does Dreyer view the positioning of WorleyParsons RSA within the wider WorleyParsons group? Responding, he says that while WorleyParsons RSA ranks as one of the biggest operations of its kind in Africa, it accounts for only a fairly small proportion of WorleyParsons’ global workforce of nearly 23 000 employees.
“Strategically, though, we are regarded as being extremely important to WorleyParsons. This is not only because of the special skills in mining and minerals processing that we contribute to the group but it also reflects the fact that the potential for economic growth in Africa – both in the near and long term – is really huge. WorleyParsons obviously wants to be part of this growth and WorleyParsons RSA – based in Johannesburg, which is the gateway to the continent – will spearhead this involvement. My own belief is that exciting times lie ahead for WorleyParsons RSA and that its size relative to the rest of the group will steadily increase in the years ahead.”
Report by Arthur Tassell