"A big change that is shaping the mining value chain in Africa is the proliferation of mining contractors and, specifically, local contractors, which we believe will bring enormous socioeconomic benefits."
What have been the key growth drivers for Mincon over the past year?
Our most strategic growth has come from three key areas: (1) Increasing our territorial reach through multiple service centers around the world; (2) Growing our manufacturing capacity to be able to keep up with demand and serve our customers more efficiently from different locations – in Africa, we produce our drill pipe range together with other drill rig accessories in South Africa; And (3) Expanding on our product range by developing various product lines to grow the business sustainably and organically in different segments of the value chain, not only exploration, so that we are resilient at different points in the commodity cycle.
What are the key demand trends you have noticed?
While exploration in South Africa seems to have dropped off, West Africa continues to grow and new concessions are picked up, so we expect a high level of activity in the next five to seven years in this region. A big change that is shaping the mining value chain is the proliferation of mining contractors and, specifically, local contractors, which we believe will bring enormous socioeconomic benefits. Also, we can no longer talk exclusively about gold in West Africa, as other minerals like lithium or rare earths are claiming attention as an attractive addition to the traditional gold-focused portfolios.
Can you tell us more about Mincon’s latest innovations?
Since our IPO almost 10 years ago, we have grown our product offering to a range that we consider comprehensive – we can supply customers with everything they need for their drill string. Our products lower drilling costs and reduce GHG output. We have quite a few exciting R&D projects going forward. Our “Green Hammer” is in the final stages of development in Australia; when launched, it will revolutionize large-diameter blasthole drilling by more than halving the time required to drill a hole.
How has inflation impacted purchasing habits for drilling tools?
The impact of energy and raw material costs increases is one of our biggest challenges, especially as we manufacture the bigger part of our product range in Europe, which has seen the most significant spike in energy costs. We are absorbing a large portion of these costs but must pass some of them to our customers. Mincon is developing products to reduce the cost impact on operations through additional value. Our biggest challenge is to be up against a customer rationale of wanting the quality of European products at the lowest possible price, a price that can only be met by Eastern suppliers. Many Asian manufacturers simply reverse engineer other established products and sell them at a low price enabled by cheap labor costs. To overcome this industry mindset, we offer our products for trials at the mine sites at a low cost or at no cost; our clients will buy if they are satisfied with the performance of our tools. In West Africa, customers want us to be involved as much as possible with their operations. Mincon does not just supply products, but we go on site, we lend our expertise, and we want our customers to be successful.
Could you elaborate on Mincon’s CSR work in Africa?
In 2022, the Mincon Group formalized its ESG goals. These include halving our CO2 emissions by 2030, powering our manufacturing sites with a mix of renewables, and becoming net zero by 2040. So far, we have invested €2.5 million in greener manufacturing technologies. Our CSR campaign is called “Social Impact” and is based on three key pillars: Creating opportunities for the next generation, making a positive impact on society, and building a better world for the future. We believe in being hands-on with our CSR projects, which is why we have invested ourselves in multiple projects on the ground, primarily in South Africa. One of the key social issues we identified is that many South African girls are forced to skip school because they don’t have access to sanitary pads, so we have a big project to distribute personal hygiene products to schools in underprivileged areas. We often engage schools close to our manufacturing locations.