African Mining Projects: an Executive Interview with Peter Canterbury, Managing Director at Triton Minerals
Triton Minerals Limited (ASX Code: TON) is an ASX listed emerging graphite producer with three world-class graphite projects in the Cabo Delgado region of Northern Mozambique, arguably one of the world's best locations for graphite.
Triton's primary strategic focus is production from its Ancuabe Graphite Project. Early works activities are underway, and construction is scheduled to commence in the first half of 2020 with first graphite production in mid-2021.
Triton is also targeting commercialisation of its Nicanda Hill Project, the world's largest combined graphite and vanadium deposit.
1 - Alain Pfammatter: Peter, thank you for your time today. You have been travelling quite a bit recently. Anything exciting on the horizon?
Peter Canterbury: Yes, for us, the next 6 months are pivotal.
A lot has been achieved over the past 2 years; with the Ancuabe project ready to go into a construction phase. We completed the DFS in December 2017 and we've secured off-track agreements for 50% of the production. Its fully permitted now, with environmental and mining concessions, and we signed an EPC contract with MCC International. So the next big thing for us, as announced in late June, is a deal with a Chinese Provincial SOE called Jinan Hi-Tech to come in to take a 34% stake in the company, subject to shareholder approval, which is scheduled for 27 September 2019 should happen at the end of September.
They'll inject about $8.5M into the project. But the fundamental element is financing support. They will assist with over US$70M of funding.
We are also having several discussions with other groups where we'll easily be able to get the remainder.
We're now in a fully funded stage, and it's just a matter of getting shareholder approval for this transaction. The next step is, therefore, to mobilise, later this year or early next year, and give the notice to proceed to MCC, and then get building!
It's an 18-month construction period and so by early parts of mid-2021, we are looking to go into production. Ancuabe is a 60,000 ton per annum, high-grade, large graphite project: we are due to be the next large-scale graphite producer and we can further expand into the high-grade expandable graphite market. Very exciting.
2 - Alain Pfammatter: Peter, in these busy couple of years, what have been the highlights, from your perspective?
Peter Canterbury: Certainly, the fact that we've been able to take a company that was involuntary administration when I joined out of this situation and to really progress and fast-track the development of its assets.
We've been able to do it promptly: we came out of voluntary administration in December 2016 and did all the necessary studies during 2017. Permitting took a bit of time, but we've now taken a project from 2.5 years from nothing to being permitted ready to run, and now to have financing and a very clear path to go and ready for construction.
A highlight is to have in place a board and management team that is very focused. One of the best things I ever did was to get on board a project manager who was a metallurgist to get us back on track. She drove it very hard, without compromise and got us credibility with her metallurgical work. When a company comes out of voluntary administration, they aren't going to have a lot of credibility and we've taken that to a new level. Working with really good people is definitively a highlight.
3 - Alain Pfammatter: How do you see the graphite market in the coming years?
Peter Canterbury: Expandable graphite will be in high demand, another reason for us to be excited. Estimates say demand will be around 1 to 2 million tons in the next 10 years, and currently, there are only about 50,000 tons produced per year.
Very little of that can come from China in the future, as they are running out of large flake graphite which is needed for expandable graphite, and a lot of the other projects that are capable of supplying that in Africa are located in Tanzania which has as of today, some significant development challenges. Whereas being in Mozambique is quite good because we have a fully supportive government in place.
In short, we're in a really good position to beneficiate from these market conditions. We have supportive shareholders that have helped us finance the project and move forward, we have a government that's supportive and wants us to build, and we have a constructor who wants to build, and we also have people who want our product!
4 - Alain Pfammatter: Is the environment in Mozambique favourable to your project and other projects in general?
Peter Canterbury: Without being too parochial on this, my experience in Mozambique compared with several of the other countries I've had experiences in is one where the government is supportive. They have a second-generation mining code that is fully in place, you've got two graphite mines already operating there, you've got a coal mine created by Vale sitting there. South32 has an aluminum smelter running, and you have 2 large LNG projects going on.
The government can see a path to getting employment and income into the country by supporting development. It is not perfect, a bit slow, but it's just inefficiency rather than anything that we may need to be concerned about. They're under-resourced and don't have good systems in place yet to get up and support the development that's going on. But you have good legal firms sitting in the country, with alliances with large legal firms and the large accounting firms. So, the framework in Mozambique is favourable.
5 - Alain Pfammatter: You mentioned a few operating mines and a few projects going on in Mozambique. Do you think that feeds a talent pool you can recruit from or is it is a risk for you?
Peter Canterbury: It's a bit of both. With the gas projects coming on, there will certainly be a drain of the talent pool. But there are a lot of skills in Mozambique, we currently do not have any expats in our workforce. We've got some good local communities where we've employed from. Look, it's an unskilled level or a semi-skilled level, but part of our vision is to have training programs to maximise local employment.
6 - Alain Pfammatter: Do you have any programs or initiatives to select, train and develop people from these communities?
Peter Canterbury: As part of the social development program, we did surveys and sessions with 5 local villages that surround us. We've surveyed skills; we've talked with communities about the project and we have now a consultation process going to assess what they expect to get out of this project.
Employment is certainly one, we've built a skills database and we've committed to maximise the local workforce. We've also talked to village chiefs about having a diverse workforce in terms of supporting women, and how best to do it. It is part of our requirements that each of our contractors commits to the training and development of local staff.
7 - Alain Pfammatter: You seem quite optimistic about finding the people you need with the right skills or trainability to have the right resources for the project. One challenge would maybe be at the community level to have a transparent vetting process that satisfies everyone. Do you see any challenges in the people space that are specific to the African environment, or the country you're in?
Peter Canterbury: There will always be challenges, communities or authorities might try to nominate who they want to be employed and we'll need to ensure that we employ equally from the different communities, etc. It's all about transparency, we've communicated how many people we're going to employ and what are the skills profiles and requirements. Sure, we'll eventually need consistency in the vetting process. Some of it will be put onto our contractors, as we may well do a contact mining process. It's not just the skills, it's also going through the health screening, medical screening checks.
The other challenge will be to bring other Mozambicans into what might be seen as the ‘good jobs', for example professional, skilled or supervisory jobs. Part of mitigating this is to have training programs that'll develop people over time, and what we've explained to the people is that this is a long project, so it's not for them, it's going to be for their children and to allow them to develop the necessary skills.
8 - Alain Pfammatter: From your perspective, what are the strengths and weaknesses of the Australian mining sector for that kind of environment?
Peter Canterbury: The skillsets are there, there are a lot of people with experience in Africa and there are companies that have the right experience and knowledge. When you're a junior, you're never going to have the skills sitting in your company, you need to have good partners, good contractors who can bring that skill set to your organisation when you need it.
Another strength is that Australians are always very determined in what they do, even if they don't always understand the jurisdictions they go into, and what are the nuances of operating in a different place. I think that's getting better.
The Australian Government has been good at engaging with other countries and understanding the development framework. This definitively helps with governments' goodwill.
But I also sometimes feel it's getting harder and harder. The regulatory environment becomes difficult from an equity market perspective. I do have sympathy for the regulators in what they're trying to achieve, but the implementation is becoming increasingly more challenging to raise funds based on the regulatory environment. It's become a lot harder to get funds and it's harder and harder to tell the story and vision, outside a purely fact-based communication.
Part of the junior exploration phase is selling a vision and delivering on it and based on the credibility of the company. If you're not able to sell that vision, it's hard to obtain funds for doing it. A challenge I enjoy!
9 - Alain Pfammatter: Anything you'd like to add?
Peter Canterbury: I would like to highlight the importance of contractors. That's the real thing people need to understand. You don't need to have everything sitting in your organisation. Lean organisations are better at doing this work. The challenge is to identify who are the people or organisations with the capabilities to best support your business. We've used 20 to 25 different contractors through various processes, studies, approvals. Then you get into a construction and operation phases and this is where Globe 24-7 comes in and helps assist us with the HR framework or the recruitment processes. Globe has been able to offer expertise, support and assist us with implementation throughout the recruitment processes, the training processes etc.
At this stage, the issue is that you can't have big programs, as the revenue cannot support that, but we're able to utilise people with the experience who can roll out programs, even if there may be some tailoring required, and you learn to live through the capabilities of your contractors and work with them.
Big organisations tend to think they have all the skills within their organisation. We know we don't, so we get the right people to come on board. Having local understanding is important.
10 - Alain Pfammatter: A last word?
Peter Canterbury: Everything is in place, all the dominos are in place, it's just a matter of pushing that button now, and then go constructing! Let's build this thing!
About Globe 24-7
Globe 24-7 (Globe) has been conducting human resources consulting and search assignments for local and international mining, power and energy companies around the world for over a decade. Globe has offices in the major markets of the world to ensure consulting assignments and search campaigns are effectively managed at both site and corporate locations and has grown internationally to now service small, mid-tier and large-scale companies through its project recruitment, search, HR consulting and HR Systems divisions.