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What mining teaches about the connections between people, knowledge and success in business

By Ken McDonald FIML


About the time that I was learning about business analysis, the managing director of our company, Weipa, assigned me a task that would occupy 100% of my time for about 12 months. In brief, we had to move quickly to be able to supply a more cost-efficient blend of trihydrate bauxite (ore that is the primary source of aluminium) to a leading refinery in Gladstone. If the trihydrate bauxite from a competitor went into Gladstone, it would change the dynamics of future negotiations. There was a major business threat if we did not supply and opportunity if we did supply trihydrate grade bauxite of about a million tonnes per year.

The managing director, Ian Gould, explained the context in some detail and said, “I want you to get trihydrate bauxite from Weipa to Gladstone by the end of this year.”

That was very clear. The reasoning was also crystal clear. How to do it was a foggy highway – initially. I do not intend to bore the reader with all the technical work that took place, but we were successful. There were many restless nights but it was a great case study in problem-solving that goes back to the Jaques stratified systems theory about levels of work complexity. There was some very good teamwork across multiple sites as well.

There were a number of streams of work taking place in parallel. Geologists and technical people who had a good knowledge of the bauxite deposits were combing through historical data to see if there were “pockets” of trihydrate. Chemical and process engineers were developing ways of analysing bauxite chemistry. Drillers at Weipa were drilling and analysing the bauxite to find potential trihydrate pockets near existing mine faces in targeted areas.

Considerable time and effort were also being spent on understanding the fundamentals of the ore. This was critical information for our current project. Interestingly, fully productive operating mines tend to be driven by less-detailed analyses. It is easy to lose sight of the fundamentals if there is no significant change. However, if you are seriously challenged, fundamentals are like gold.

We subsequently sent a trial shipment of trihydrate bauxite which proved a success. When capital was approved, the Weipa operations and Gladstone refinery were equipped to mine, handle and process trihydrate-grade bauxite, thus increasing the output of both operations.

I, meanwhile, learned some valuable lessons:

  • The importance of understanding the fundamentals of a product or resource
  • When you give people clear targets, appropriate discretion and good context, you can be pleasantly surprised with their contribution
  • As a leader, you do not have to be the expert on everything. You do have to be able to out all the pieces of work together in a coherent work plan

This is article is an edited excerpt from Ken’s book, ‘Management, Machinery and Money’.

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