Australian consultants to play a key role in mining future

AJM: Now that you are part of the Snowden team, can you give us any insights into what areas of the business you will be focussed on initially?
JMR: My initial focus is towards fully assessing the capabilities of the Snowden group, particularly in the area of resource and reserve evaluation. My objective is to determine how to best use present strengths and where improvements can be made, taking into account the industry expectations as I have experienced them over the years. I must add that I have already been very impressed by Snowden's expertise in both the development and application of new tools to better assess mineral resources.

AJM: What kind of insight or technological understanding can Australian consultants use from overseas which provide a competitive edge particularly in the area of resource and reserve valuation?
JMR: Continuous improvement of resource and reserve valuation requires new theoretical developments, rapid technological transfer, and appropriate use of technology for practical application. While theoretical developments may occur within consulting companies, they are primarily the domain of universities. Such centres of excellence are located worldwide. The problems being investigated and the quality of the research vary by location and over time. Consultants must keep up with these developments to have access to the best possible tools to solve their clients' problems.
But developing new theories, understanding where research is being performed, and recognising which research is likely to have significant practical applications is only part of the problem. Technology transfer is just as critical. Only a few can be expected to understand the often very complex concepts and mathematical equations derived by theoreticians. Computerised systems must be developed to make new theoretical solutions to known problems available to a large number of practitioners. Such systems may be developed by software companies, in which case they become available to all.
Alternatively, if it gives them a competitive advantage, consulting companies may choose to develop systems internally for their own use. Consultants must always be aware of systems which are publicly available, assess the need to acquire these systems, and decide whether new ones should be developed in-house. These decisions must be made taking into account the international context of supply and demand.
Having the best available tools does not necessarily mean supplying the best product to clients. Training is a critical part of technology transfer and consulting companies must ensure that they have the best trained staff, and that they offer training to their clients wherever they may be. Experience is just as critical and Australian consultants must thrive to gain worldwide experience by supplying services worldwide. Not only do deposits vary considerably, but so do expectations.
There are differences between countries and between companies which reflect past experience, individual preferences and level of expertise. Consulting companies which understand these differences and know how to adapt accordingly will gain a competitive edge.
Snowden has strength in all three areas: theoretical development, technology transfer, and practical worldwide experience. This is a model which works and in my opinion the only model which can maintain competitive advantage and ensure ongoing success.

AJM: What kind of trends do you see in mining consulting in Australia in the near future - do you see a substantial pick up in demand for consultants following the GFC?
JMR: The demand for consultants varies considerably from one country to another. Australia has always been a leader in this area, with broadly accepted recognition that effective use of consultants is a cost effective way to get access to specialised expertise. I expect the demand for consultants to increase both in Australia and worldwide, because of increased aversion to risk following the GFC. As a result there already are increased requirements for external audits and demonstrated use of appropriate technology and experience.

AJM: What kinds of consulting services do you think will be in most demand in the next 5-10 years in Australia?
JMR: The demand for quality resource modelling, mine planning, project evaluation, will increase. But where new demand is likely to be is in risk assessment. Companies will not only want to know the likely value of their project but also the likelihood that they will succeed or fail, taking into account geologic uncertainty as well as mining, processing, and all other technical and economic uncertainties associated with new projects. Considerable progress has been made in quantifying geologic uncertainty but applications are still limited.

AJM: How do you see the trends for mining exploration investment/activity in the region in the next 5-10 years? Will there be a significant demand for resource and reserve valuation in Australia and/or Australian companies doing exploration work overseas?
JMR: The need to discover, evaluate and bring to production new deposits will be accelerating over the next 5-10 years, not only in Australia but worldwide. Junior companies will continue to play a critical role in exploration and early evaluation of new deposits. Larger companies will play a critical role in the development of discoveries, especially large deposits requiring access to considerable managerial and financial resources. The likely high demand for mineral products will result in even broader internationalisation of companies and projects. Because of their extensive regional experience Australian companies will play a critical role in these developments, and so will Australian consulting companies which supply them with appropriate services. But the competition which Australian consulting companies will face is also likely to increase both nationally and internationally, and the need to remain at the forefront of technology will become ever more so critical.

AJM: How do you see digital and computer generated technologies impacting on exploration and resource and reserve valuation in the future?
JMR: Computer technology has played an ever increasing role in exploration and resource and reserve valuation. This trend will not only continue but accelerate. There are a number of reasons for this. Exploration, evaluation and development decisions must be made faster with better information. The tolerance for errors which would result from poor information, or misinterpretation of available information, is continuously decreasing.
Many new deposits are being brought to production which only a few years ago would have been shelved. And the size of the investments which must be made to develop these deposits is increasing exponentially.
Computer technology plays a critical role in improving the quality of the information being collected and the interpretation of this information, in assessing the risk associated with making decisions, and in accelerating the decision making process.

* Jean-Michel Rendu is currently working with the Snowden team and is based in North America. Before joining Snowden, Jean Michel was Vice President, Resources and Mine Planning for Newmont Mining Corporation with responsibility for resources and reserves worldwide. He left Newmont in 2001 to pursue his own mining consulting practice. Prior to this, he was an Associate of another mining consultancy, he also worked as Assistant Professor with the University of Wisconsin, Madison, and as Head of Operations Research with Anglovaal in Johannesburg, South Africa.
Jean-Michel is author of over 50 publications on subjects ranging from estimation and reporting of mineral resources and mineral reserves, geostatistics, orebody modelling and strategic mine planning, to technical software in mining and optimisation.