An interview with Hélène Timpano, Senior Vice-President, Operations at Kinross Gold Corporation, on the transformation themes explored in our 2019 Canadian Mine report: Shifting ground
Traditionally, gold mining has been about discovering new reserves, developing projects and maximizing production. But with bullion prices languishing in the range of US$1,200 to $1,300 per ounce in recent years and investor capital harder to come by, savvy mining companies have been focusing more on optimizing the performance and value of their existing operations.
At Kinross Gold Corporation, while management continues to review and look at quality exploration and development projects and potential acquisitions, it’s also focusing on maximizing the value of existing assets.
“We’ve had seven years of continued strong performance in meeting, or beating, our guidance, so we view ourselves as really strong operators with an emphasis on operational excellence,” says Hélène Timpano, Senior Vice-President, Operations.
A leading Canadian miner builds a sustainable future one success at a time
Much of the success comes from a collection of small initiatives that begin as pilot projects in one area of the company and move across different functions once they’ve shown their value, she says. “In terms of these initiatives, we’re normally talking about a million dollars here, a million dollars there—there are few remaining big $20-million meaty opportunities that you just drop on the table.”
The approach at Kinross has been to find solutions that improve how the company operates across silos rather than buying “gizmos,” says Timpano. She cites the example of using enhanced sensor data to improve the accuracy of blast movement monitoring. By better tracking what happens to the ore body after a controlled blast, engineers can improve the performance of both the mining and milling operations.
Besides its continuous improvement process, the company is moving forward with its innovation push, which begins by encouraging front-line employees to submit ideas. Technology may then come into play to support new initiatives, but it doesn’t drive the change.
“We want those ideas to run deep in the organization, and we want the ownership that comes with them where someone says, ‘I own this idea. I want to see it be successful,’” says Timpano.
“If it works at one site, then we think about how we can replicate it. That’s different than what you see some of our industry peers doing in terms of placing bigger, longer-term bets and forming external partnerships.”
One of Kinross’ recent improvement efforts involves using data to understand the performance of tires on mine vehicles. With the information difficult to access and digest, management at one site built a simple model and a report to determine all of the data required to improve the decision-making process. Once it had perfected the method, the company could use it at other sites.
For Timpano, an essential part of the company’s approach is securing buy-in from all of the affected parties. There’s a delicate balance between governance and offering support, she says.
“There is a time and place for governance, but I think you earn the right to govern if you have a lot of wins under your belt.”
This approach also relies on having cross-functional teams to figure out what’s best for a particular site, says Timpano.
“A lot of our success actually has been in our ability to be as proactive as we’ve been in thinking methodically about big project developments. It’s been very deliberate—even down to team composition, bringing the technical expertise with the financial and business expertise so that we were understanding the value of that opportunity every stage of the way. We really want to make these projects work and want to avoid instances where you head down a path that, when you end up at the other end, it’s not landing where you expected.”
The approach can have the added benefit of appealing to younger workers, which is a significant concern for the mining industry as it competes for talent.
An example of Kinross’ efforts to engage recent graduates is its Generation Gold program, which moves high-performing employees around the company to give them maximum exposure and opportunity.
While the mining industry as a whole needs to work at selling itself to young workers, once people get into the business, “they get hooked,” says Timpano.
For Kinross, a big focus is on expanding the opportunities available to employees. “I think we’re changing the way that we think about mining because we’re bringing more data to the table and we’re bringing the discipline of running a business to the way that we operate our mines,” says Timpano.
“So it’s pretty exciting. It’s a pretty multi-faceted career.”
On their own, small pilot projects don’t earn a company a market capitalization of more than CA$5 billion. While Kinross’ approach to improvement and innovation often starts locally, its operations are running on a global scale and its strategy to increase value includes not only optimizing performance on a step-by-step basis but also investing in exploration and development projects and acquiring assets.
For example, Kinross is studying the feasibility of restarting the La Coipa project in Chile, which the company acquired an interest in back in 2003 and has been on hold since 2013. The company acquired the remaining stake in a promising deposit at La Coipa that it didn’t already own in March 2018 and is on schedule to complete a feasibility study for the restart project in the third quarter of 2019.
In July 2018, Kinross paid US$253.7 million for two hydroelectric power plants in Brazil that it expects to help lower production costs at its Paracatu mine. A few months later, it bought Barrick Gold Corp.’s 50% interest in the Bald Mountain exploration joint venture in Nevada. The purchase gave Kinross 100% ownership of the Bald Mountain land package.
And as for the smaller-scale improvements the company is focusing on, Timpano emphasizes the importance of looking at the bigger picture as well. “You don’t want to have all of these disparate pieces that will never one day connect,” she says.
“So we’d rather start with the bits and pieces, prove the value in that way and then make sure that we’re thinking about how they might ultimately come together to paint the bigger picture.”
Senior Director, Consulting, PwC Canada
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Director, Consulting & Deals, PwC Canada
Tel: +1 416 815 5323