Home' Australian Resources and Investment : June 2013 Contents 60 • Australian Resources and Investment • Volume 7 Number 2
in most areas where mining is.
We sell across the range of commodity groups within the
mining industry, and most of our revenue is mining-based,
so we are truly a mining services company, but we aren’t in
exactly the same position as other mining services companies,
and that’s a point I’ll come back to later in the presentation.
Now, I’d like to make a few points for observation about
some types of blast. A ‘throw blast’ is when you’re kicking off
an initial excavation. You can choose to throw the dirt, or you
can choose to keep the dirt in situ or in place. This one throws
The second blast is where you want to have an initial
excavation, but leave the dirt in place. Now, it depends on the
application point, but we can do either.
The third one is about how we can fire in the middle of
skyscrapers without disturbing the public in the streets
around this blast or the skyscrapers themselves.
And the last one is how you can use explosives to facilitate
the development of infrastructure right next to existing
infrastructure without disturbing the general environment.
And when you think about it, if you couldn’t apply explosives
in the middle of skyscrapers, the only other choice would be
hour upon hour of jack-hammering. So if you control that
blast and control that use of energy in an application point,
which is quite unusual in the middle of the city, then you can
actually have a smaller environmental impact than any other
Now let’s get onto the industry fundamentals. So why is it
that explosives have some gravitas going forward?
Urbanisation and industrialisation will continue. There
are a few hiccups at the moment, and I think last year or
the year before, in human history, in excess of 50 per cent of
the population lived in urban cities. In the developing world,
in China and India, that trend will continue. That thrust for
accommodation as a result of that, and the various services
and consumption of commodities that goes with it, is the key
driver that sits at the back of the demand for explosives.
On top of that, there are declining ore grades in most of
the commodity groups, and the strip ratios are going up. Now,
strip ratios going up applies just as much to the bulks of iron
ore and coal as to the other base metal commodities and the
precious metals. And by definition, as a greater percentage
of the supply point comes from established mines, then the
grade tends to drop and the strip ratio tends to increase. So
as the size of the industry grows, that tendency accelerates.
That’s driven in particular at the moment because exploration
success has dropped off, and I think that you’ll find over the
coming years that the money put into exploration will drop as
well, so it will be an acceleration point.
Miners tend to take the best ore bodies and the best parts
of the ore bodies first because, of course, it gives you the best
payback, so that strip ratio point just continues to exacerbate.
And then on top of that, people are looking for technologically
driven answers to productivity questions that are facing us
more and more right across a whole range of industries.
Now this contends that, over the next 20 odd years, we will
continue to see fairly exceptional percentages of commodity
demand growth. At the moment, we may be going through
some hiccups, and gas might be thrusting itself into the
Global Leader in Mining Ser vices
1. World’s largest provider of commercial explosives to mining and
infrastructure markets with 28% global market share
2. Global leader in the provision of ground support in mining and tunneling
3. Leading global supplier of cyanide for use in gold extraction
4. Australia and New Zealand’s largest supplier of chemical products to
mining, water treatment and other industrial markets
5. ASX listed with market capitalization of approximately A$9.6B (ASX Top 30)
Australian Base - Global Footprint
2012 Mining Ser vices Revenue • 90% of Group EBIT is generated from
mining related industries including
quarrying and construction
• Broad mining exposure – from coal
and iron ore to base and precious
metals and diamonds
• Wide geographic spread
• Commodity and geographic diversity
reduces earnings volatility
Iron Ore, 5%
Australian Base - Global Footprint
Operations in 50 countries
Customers in over 100 countries
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