We take an in-depth look into the Ok Tedi mine, its operations within Papua New Guinea and speak with executives to delve deeper into the organisation.
THE HEART OF PAPUA NEW GUINEA
“We’re a company with a soul.”
That’s the view of Musje Werror, Managing Director and CEO of Ok Tedi Mining Limited (OTML).
It’s fair to say that OTML is a mining firm proud of its culture. The company prides itself on being a 100 percent Papua New Guinea (PNG) owned organisation and operating with a large national workforce. In fact, according to Werror, the staff are committed to make OTML become a successful company since the profits generated stays within the country.
“When we became a 100 percent PNG-owned company, there were doubts that we could operate as a strong and vibrant business and so far we have done that,” he explains. “I believe Ok Tedi in many ways is a role model for this country.”
Today, Werror sits at the helm of the mine’s operations. However, his journey to the top of the organisation is an interesting one. Werror has worked his way up through the ranks since joining the company’s Graduate Development Programme in 1988. “I always had an interest in mining and accepted the offer to join Ok Tedi after completing my degree,” he recounts. “I started off in the production laboratory before moving into the health and safety department where I became the first trained occupational hygienist in PNG.”
Subsequently, Werror then became Superintendent of Health and Safety before he moved into the operations area. By his own admission, there isn’t an area within Ok Tedi that he hasn’t worked in or doesn’t know about. “My time in health and safety allowed me to have access to all the operating areas on site. It helped me to develop a greater understanding of how the business worked,” he explains.
Werror graduated with a Chemistry degree from the University of Papua New Guinea, the country’s premier state institution. Having worked in the mining space for over 30 years, Werror has had a front-row seat to how the industry has changed, particularly in PNG. “The industry has had its fair share of challenges over time,” he admits. “Addressing environmental and social impacts are always high on the agenda as expectations continue to develop and change.”
And that experience certainly equipped Werror with the tools he needed when an opportunity to lead the company came along in June 2020. Upon his appointment, he acknowledged that while Ok Tedi is a small operation relative to the global industry, his company plays an influential role in PNG’s economy. “We are small in size but big in heart and we have a lot more to contribute to the development of our country.”
CRUSHER REPLACEMENT PROJECT
Ok Tedi operates a large-scale copper and gold mining and processing facility in the Western Province of Papua New Guinea. Ore mined from the open pit mine at an annual rate of 24 million tonnes feeds a processing facility which consists of a gyratory primary crusher, two parallel grinding modules, flotation and gravity separation and sulphur removal.
“In 2016, a major strategic review of the business was conducted to optimise the main Fubilan pit and maximise the value of the business while maintaining our environmental obligations to the Government and communities. The review identified the Crusher Replacement Project (CRP) as a major value adding proposition,” explains Werror. “The project was completed and commissioned in December 2020. It had cost PGK800 million and was completed on time and on budget without a lost time injury. The completion of the project will allow access to high grade ore material below where the old crusher was located by 2023.”
The scale of the project was significant given the challenges of procuring and freighting the equipment and materials into a remote location and establishing a team made up of 98 percent contractors and consultants to execute the project. At the time of installation, the gyratory crusher was regarded as one of the largest machines of its type to be manufactured globally. Over 13,000 cubic metres of concrete and more than 2,500 tonnes of fabricated steel was required to construct the new facility. “The site itself required substantial pioneering earthworks to be undertaken before construction could begin,” says Werror. “It is indeed a credit to the CRP team for safely executing the project on time and within budget.”
For Werror, he believes in the value of having long-term strategic goals. “We have a small strategic planning team who have done an outstanding job to identify these high value projects for the business,” he says. “We have all but exhausted the value in the current pit and will focus our attention on exploration to extend mine life beyond 2029. Hopefully, we will identify another ore body but time is running out so it will have to happen soon.”
To most organisations across the world, the importance of establishing key strategic relationships is essential to long-term success. Werror acknowledges how much of an influential role key suppliers play and affirms that his company places considerable emphasis on how important they are, particularly as a result of its location in PNG.
“We are located in a very remote area,” explains Werror. “Most of our consumables and supplies are imported from overseas and this requires the company to maintain close working relationships with our partners and suppliers.” He added that it can take up to four months for supplies to arrive on site so forward planning to ensure the right equipment or part is critical.
Werror points to Ok Tedi’s relationship with Hastings Deering as a particularly important example. “With our mining fleet, we use Caterpillar equipment,” he says. “Hastings Deering are our PNG agent for Caterpillar, and we require parts to be available at any time to maintain our fleet. We have other suppliers that supply critical parts for our mills and processing plant. Partners are critical to us to ensure the mine continues to operate successfully and the relationship we have with partners like Hastings Deering are essential to meet our production targets.”
When seeking to establish a mutually beneficial collaboration, Werror has a clear idea of the characteristics he looks for in a partner. These include having values that are aligned with OTML’s values, reliability and have a proven track record.
In March 2020, as the COVID-19 pandemic took hold of the world and caused operations in all sectors to grind to a halt almost overnight, Ok Tedi activated its major incident management plans and introduced a series of measures and alert levels prior to its first positive case.
“In August 2020, we had a positive case and the numbers escalated considerably within a space of two weeks,” says Werror. “We suspended operations for six weeks and it was a challenging period for us since we didn’t know how the virus would impact our employees, contractors, business partners, communities and the business. Fortunately, we had no deaths and only a few people experienced mild to moderate symptoms. We established workplace and residential bubbles, imposed control measures and commenced a general awareness programme to curb the spread of the virus which we successfully achieved.”
“Despite these efforts, we had a second wave of the COVID-19 virus within the operation in March this year resulting in the company having to suspend operations for two weeks. A major review of our COVID-19 management processes and control measures were undertaken allowing the safe resumption of operations in early April. To support the country’s efforts to combat the surge in COVID-19 cases, the company has made a PGK20 million contribution.”
Talent management is a key part of Ok Tedi’s strategy. The company has around 1,800 permanent employees, with a similar number of embedded contractors and service contractors. Indeed, Werror is keen to stress that the organisation believes in its staff and wants to equip them with the skills and tools to succeed, not just in Papua New Guinea but also overseas if they are given the opportunity to work abroad.
“One of my ambitions is to rewrite Ok Tedi’s history and create a positive perception of the company to the world. We can achieve this by working towards leaving behind a positive legacy which includes our workforce becoming successful when they leave OTML,” explains Werror. “It’s about developing our people with skillsets that create opportunities for them anywhere in the world.”
Ok Tedi seeks to be renowned as the leading PNG mining firm in all aspects of business as part of its Vision 2025. However, Werror acknowledges it’s a short-term goal. “Usually visions are for much longer durations. In Ok Tedi’s case, it is about providing a balance between commercial and technical aspects and people and social outcomes,” he explains. “By 2023, all manager positions will be nationalised. We’re not moving all expatriates out; we want them to play a mentoring role and allow the nationals to take the lead. This goal aligns with our philosophy of being a 100 percent PNG owned company.”