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SRK wins first HighGrade popularity contest

March 2010

A NEW survey of Australasian-based exploration, mining and contract mining companies to gauge views on the technical leadership of mining consultancies has produced a surprising runner-up in the ‘best overall’ consultancy category, won by sector heavyweight SRK.

About half the 184 responses to HighGrade’s inaugural survey of market preferences chose a ‘best overall’ consultancy, with SRK a clear winner of the category. However, West Perth-based Optiro garnered enough votes to pull off something of an upset second place in the standings: not surprising in the sense that the growing Optiro team is highly regarded by a number of small and large mining/project development companies – one respondent describing them as a team of “highly skilled resource consultants” – but due to the fact that the company has only been around since 2008 and has already lived through a tumultuous market downturn.

The response rate for ‘best overall’ consultancy of about 50% compared with more than 75% for both the geological and mining consultancy categories, headed by SRK and AMC Consultants, respectively.

Snowden was second in the geology category; Optiro runner-up in mining.

Respondents included many experienced industry executives and mining managers who said they had worked with certain consultants in the past and were not necessarily using their preferred nomination at present.

Most of the responses to HighGrade’s survey came from email or telephone correspondence, and face-to-face interviews, in the six weeks from the start of February to the middle of March this year.

SRK, which last year celebrated its 15th birthday in Australia, was this month due to welcome new managing director Brian Middleton to the country after Peter Williams’ decision to step back into full-time geological consulting work. SRK, a 35-year-old global firm, is the largest mining consulting firm in the sector.

Lycopodium/Orway was the popular choice as leading metallurgical consultancy among one-third of total respondents.

About a quarter of respondents nominated firms they considered the best geotechnical (SRK), hydrogeological (Golder) and environmental (Coffey) consultancies, while Whittle Programming and Beck Arndt Engineering were mentioned most often as the best “niche” consulting service providers.

Other firms that figured prominently in voting for the various categories included Jigsaw Geoscience, Coffey, Hellman & Schofield, and Cube Consulting in geology; Runge, Snowden and SRK in mining; and WorleyParsons and Hatch in metallurgy. Quantitative Geoscience was another popular niche service provider.

Coming up in HighGrade: we profile the leaders. 2010 HighGrade survey summary
Best geology consultancy. 1. SRK. 2. Snowden
Best mining consultancy. 1. AMC. 2. Optiro
Best metallurgy consultancy. 1. Lycopodium. 2. AMMTEC
Best geotechnical consultancy. 1. SRK. 2. Golder
Best hydrogeological consultancy. 1. Golder. 2. Coffey
Best environmental consultancy. 1. Coffey Environments. 2. MBS Environmental
Best overall consultancy. 1. SRK. 2. Optiro
Best niche/specialised consultancy. 1. Whittle Consulting. 2. Beck Arndt Engineering

Respondents: 44% Western Australia; 26% Queensland; 13% New South Wales; 6% Victoria; 4% Indonesia/Papua New Guinea; 2% South Australia; 2% New Zealand; 1% Tasmania; 1% Northern Territory.* 42% Mining companies; 18% exploration companies; 34% mining/development companies; 4% contract mining companies; 2% ‘independent experts’.

*Where companies are based. Includes companies working in other offshore locations.

Key themes

- Strong junior explorer/miner sector in Australia conducive to growth of smaller consulting firms. Many smaller firms had to decide during the recent boom if they were going to transition to a larger-scale enterprise, different culture and new business management issues, or “stay true” to foundation ideals. Those that chose the latter still grew and, some suggest, have retained a more loyal client base.

- Corporatisation and ‘commodification’ of consulting services is said to have proliferated during the recent boom, with bigger consulting firms in particular having to deal with cost inflation (salaries driven higher by big mining companies) and skills gaps, and responding with services tailored to meet the needs of larger mining clients.

Other comments

  • “Some [consultancies] are only small, but that doesn’t seem to limit their capability.”
  • “The real issue is people. There are shortages of good people coming through the system and we face an exodus of experienced engineers, in particular, and even geologists over the next 10 years. Many people who left the industry [first half of 2009] have left for good.”
  • “We don’t use a lot of consultants and the ones we do are usually one-man bands.”
  • “When I choose a consultant I first look to see the qualifications of the person who will be doing my work. I am then very interested in his/her reputation within the industry – not only their technical knowledge but their ability to deliver a completed report or project. There is nothing more frustrating than having the ‘guru’ working for you, but not then being able to get a result because they are torn between so many jobs.”
  • “I am reluctant these days to allow people to ‘learn’ on my job. They all charge too much and provide so little after job care that I am getting harder on this one.”
  • “The skills and willingness of this group to think outside the square is impressive. I think they’re world class and they haven’t been around for that long – the people have, but the company hasn’t.”
  • “I would say we’ve lost that mentoring capacity, in the main. Who’s got the resources to put their best people in that [mentoring] state? But really they can’t afford not to be doing that.”
  • “The excuse that we don’t have enough people to complete the job does not cut it either. I am very aware of the skills shortage and generally book my jobs well in advance. But it amazes me that in most cases consultants these days just see that as an opportunity to take advantage of me.”
  • “Can’t bat, can’t bowl, can’t field ... and they charge too much.”

Written by Richard Roberts, HighGrade - Drilling deeper for the news

SRK Hong Kong