Mine’s reliance on local suppliers continues

Posted August 25, 2015

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Site-based supply people will be working with procurement at head office.

The shift to South32 will not adversely affect local suppliers’ relationship with the Cannington operation in north-west Queensland, according to asset president Peter Sharpe.

The BHP Billiton spin-off company is headquartered in Perth and has closed a regional office in Townsville.

“Regardless of where we’re headquartered we rely on local businesses and we rely on the relationships - and that’s not going to change,” Mr Sharpe said.

“We still have a local warehouse here at Cannington, we have local supply people.

“There is a core group of procurement people based in Perth but they won’t be working in isolation, they’ll be working with our site-based supply people.”

In 2014, the Cannington operation spent $30 million among 30 locally owned and operated businesses from the Townsville and Mount Isa regions.

Mount Isa to Townsville Economic Development Zone (MITEZ) chief executive officer Glen Graham said the Cannington mine was a major contributor to the North Queensland economy. It was one of the largest customers on the Mount Isa rail system and for the Port of Townsville, he said.

“Although the mine is principally fly in-fly out, Cannington has been a strong supporter of communities in the North West and MITEZ is pleased to hear that South32 will continue with the levels of support provided in the past, which includes a local purchasing policy that gives suppliers and contractors in the North West the opportunity to quote,” Mr Graham said.

Mr Sharpe said Perth had been selected as the corporate centre for South32 as it was the ideal location for time zone coverage between Australia and South Africa, where many company assets are based.

He described South32 as having a leaner business model, removing layers of management.

The Townsville BHP Billiton Cannington office was being closed as part of the demerger, leading to about 40 redundancies, he said.

“Some people were able to be redeployed to Perth or out to the mine site but, yes, unfortunately there were a number of redundancies that came with the change,” Mr Sharpe said.

He said the Cannington operation would maintain its close connections with the north and north-west Queensland community.

About 70 per cent of Cannington employees live in Townsville and work at the mine on a fly in-fly out basis, while others are drawn from Brisbane, Cairns and communities immediately surrounding the mine site.

Mr Sharpe said there was a groundswell of excitement at Cannington about the shift to South32 and the chance to become the simple and nimble business being flagged by senior management.

“Agility is important because we have been part of a very big organisation and that can be a little bit bureaucratic and constraining for smaller assets that probably need to be more flexible or need to be able to move faster than some of the larger organisations’ systems allow,” he said.

“There’s a real sense that the time between an idea and a decision is going to be much shorter and people are starting to see that already - we are already looking at process and procedures and unwinding some of that bureaucracy and complexity.”

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