Fox Projects works hand-in-hand with miners to provide EPCM services.
Fox Projects was established in 1998 and offers a full suite of services and project management to the mining sector. Can you provide us with a brief overview of Fox Projects?
Mike Fox-Martin (MFM): Fox Projects services all parts of the value chain. We take a geological model from a client and proceed with concept and feasibilities studies and assist with the execution of that work. Post commissioning, Fox Projects is involved with productivity enhancements and operational assistance.
Pieter Loock (PL): The EPCM work is Fox Project’s long-term, sustaining business. However, to secure an EPCM contract you need to do the legwork up front, beginning with the suite of studies, proving the business case, and even assisting with raising the capital.
Globally, the mining sector faces the major challenge of skills shortages. How has this affected Fox Projects?
PL: Globally there is a shortage of engineering skills, which is apparent in South Africa as well as the rest of the continent. More mining companies are asking Fox Projects to help train the staff to run the mine operations.
MFM: There are large growth opportunities with on the job training. Since Fox Projects employs professionals on the ground, it is a unique opportunity to transfer skills to the client. For most of our projects, we form project teams comprised of the owners’ personnel as well as our own. This hybrid model separates Fox Projects from our competitors.
What are the advantages of the integrated hybrid model of utilizing owners’ personnel in conjunction with outsourced professionals for mining companies?
PL: The EPCM industry is changing. In the golden years, when there was more work than qualified people, companies preferred to have a full EPCM team doing the work. The mining industry is now under pressure, and we need to be able to show the value that we add. What we find is that clients are much more receptive to the sharing of resources.
MFM: One of the principle complaints from clients is that they outsource the management of the project but still the carry the risk of its failure. Our clients are somewhat jaded because in the past they had some projects go badly but there was little recourse to the service provider. With an integrated owners’ team and consultant approach, the clients’ risk is mitigated and a more sustainable project is created, which is also more cost effective for the client. In our view, it is a win-win approach.
However, this approach is far more complex for Fox Projects. To manage your own people is one thing, but to manage your clients’ people is even more difficult. It requires very skilled professionals, who can understand the clients’ view and our own and make calls in the interest of getting the job done. If you do not have the right skills, you are going to fail. In addition, the decision-making and stakeholder management is far more complex. The model relies on client relationships, and we have to become part of their ecosystem in terms of decision-making.
Historically, clients did not do this, but due to cost pressure, we devised this working approach and tested it with a few clients. As a result, other opportunities opened up. During mining recessions, our model has been favored more than other contracting models.
PL: You need to employ people who are able to interact with the clients up to a management level. We need to be able to put our client hat on and do what is best for the project, irrespective of who the shareholders, EPCMs and clients are. That is where the relationship happens and you gain their trust.
MFM: We have actually had one of our project managers elect not to use some of our internal resources because he could get it cheaper in the market. Although it hurts, it is part of the trust relationship and by doing that we actually build their trust.
As part of your community and industry contributions, Fox Projects established a BBBEE Educational Trust, which supports and ensures the training of previously disadvantaged students in the Mining and Engineering Industries. Can you tell us about this initiative?
PL: We have started engaging with our clients and are proposing a joint funding of up skilling people. We have an empowerment trust as our BBBEE shareholder. In partnership with our clients, we identify recent graduates who can come and train with Fox Projects for a six-month period. During this time, we will put them through the full project management spectrum, and they gain on-site experience. After six months, they return to the clients’ mine. The intention is that at the end of the mine’s life, some of the trainees will come back to Fox Projects.
MFM: We have an empowerment trust to fund educational needs, so we gain our BBBEE through our empowerment scheme. We have put a mine engineer through university and once he graduates, we put him into the market and introduce him to various companies. He will either come back one day as a consultant with on the ground experience or become a client one day.
Fox project has worked with very high profile clients; can you detail a flagship project that you have worked on?
MFM: We recently completed a ten-year plan for Mopani Copper Mine in Zambia. We literally went through the whole mine from geology through processing. We modeled what they were doing and compiled a financial and technical business plan for them to move forward. In addition, we did feasibility work for the Modikwe projects and we have been managing the execution of the project.
One of the most unique situations that we have taken on what would be traditionally the clients’ scope, so we are actually managing some of the mining works. There is so much value to be had in the efficient execution of the project. With the hybrid model, you need to find the entity that is best positioned to do that.
PL: We are not risk averse. For example, we will take on contract mining if there is a need. Fox Projects is always looking for innovative ways to solve problems. We listen and respond to what the client wants. Our business is to establish new infrastructure so that they can mine in the future.
Fox Projects has an aggressive growth strategy. What are its plans for 2015?
PL: We have been heavily involved in platinum for the past years and need to start actively driving the core competencies and start targeting base metals and diamonds. We have in-house engineers as well as the necessary project management skills, but in the last couple years, the platinum majors have all used our resources, which is consistent across the EPCM industry.
Fox Projects is not your typical EPCM. We are much more relationship-oriented and solutions driven. As a result, we are able to move into new sectors such as contract mining and are prepared to think about new ventures.
MFM: We would like to consolidate our South African portfolio. We are also looking for diversity our commodity base, client base and jurisdictions. We had the luxury in the past years of being fully subscribed with South African work, but this was not the best strategy, so we entered Zambia and will enter other southern African countries.
This interview was part of research being conducted by GBR for its upcoming Mining in Africa Country Investment Guide (MACIG) 2015, which will be published in February 2015. To participate in this report, please contact Sharon Saylor at email@example.com.