Seven-year old consulting and engineering firm Obsideo Consulting has quickly built its success in the mining industry on the back of founder and MD COBUS ROBERTSON’s foresight to recognise the growing need for an alternative option to the traditional EPC/EPCM models offered by some of the larger engineering firms.
Having implemented this approach across a number of projects, the company is well positioned to help cash-strapped junior miners get their projects off the ground, writes LAURA CORNISH.
Having spent his entire career working in the engineering fraternity, Robertson took the decision to start his own business in 2012, motivated by the growing need for a more cost-effective and more client orientated engineering model.
An alternative approach delivers major benefits
“While the EPC/EPCM model may be effective for Tier 1 mining companies, it is a hugely inefficient model for junior companies operating with very tight budgets who don’t have the financial capability to, in essence, to pay for man hours worked which generally increases throughout a project’s duration to de-risk unforeseen challenges,” Robertson begins.
And the company’s success in delivering innovative engineering solutions is demonstrated through its impressive list of successful projects, which for a relatively young company includes a list of high profile clients within the junior and mid-tier space.
An astute businessman, Robertson has also expanded the original Obsideo business structure to cater to another emerging gap in the mining sector as well as the regulatory requirements in South Africa.
“Obsideo Projects & Technical Services is a standalone, 51% black-owned and Level 2 BBBEE company through which all South African project work is being undertaken,” Robertson points out.
In support of project implementation by Obsideo Consulting, another new firm has been established – Obsideo Construction – which is designed to deliver a full suite of construction services to mining and engineering clientele who typically find it challenging to secure construction professionals who are committed to delivering timeous and again, cost effective work without the need to secure additional, unreliable sub-contractors.
A proven track record
Just a year after its start-up, Obsideo Consulting completed its first major mining project in 2013, namely the Tormin mineral sands project on the West Coast for Mineral Sands Resources’ (the South African subsidiary of Australia’s Mineral Resources Commodities).
“The project, including processing plants and infrastructure, was undertaken on a fixed fee basis, charging to manage the project and employ the necessary suppliers and contractors on behalf of the client.
"This model included a percentage share in the capital saving of the project. Having reviewed the original studies already completed, Obsideo was able to reduce the overall project cost to the client” Robertson unpacks.
The project commenced in January of 2013, moved into construction phase in March and was commissioned in December of the same year. Obsideo also assisted the client with the necessary skills to start mining and operating the plant.
“We have developed a relationship of trust and loyalty with the client which kept us regularly active on site for another three years completing expansion and optimisation work. This is again a reflection of the importance we place on our ability to secure repeat business through the quality of work we deliver.”
New project work has continued to flow into the business since the completion of Tormin, which included studies and geological work in the silica/quartz space, consulting work for Exxaro’s Grootegeluk mine and then the company’s first turnkey job delivering a chrome tailings retreatment plant for a Glencore BBBEE company.
“We completed our first project outside of South Africa in 2017 for Rainbow Rare Earths’s Gakara project in Burundi which was delivered in record time and passed all the performance criteria,” Robertson notes. (Obsideo Consulting handles all project work outside of South Africa).
The company’s most recent project entailed the delivery of the process plant for Canyon Coal’s newest operation Khanye – which incorporates the LARCODEMS (LARge COal DEnse Medium Separator) technology that Robertson believes delivers massive cost and production efficiencies for any dense media separation process.
“Our engineering model for Khanye adopted an open book policy on every cost incurred with an agreed fee upfront. Through this process, the client was made fully aware of all necessary costs and was also kept fully involved during the equipment selection and adjudication process. With no hidden costs built into the payment plan and the establishment of a partnership with the client, we came within 6% of the original cost of the project which is considered a highly successful result for any new project delivery.”
With a number of stay-in-business and optimisation projects currently in execution, Obsideo Projects & Technical Services and Obsideo Consulting are both looking to execute new project work using the engineering models which to date have proven highly cost-effective for clients.
“Our focus remains predominantly on the junior mining space where we can undertake projects up to a value of about R500 million internally. Our knowledge of the process to move a project up the value chain, from prospecting, through mining right applications and funding to studies, engineering and delivery is extensive and we can offer clients this entire array of services,” Robertson concludes.
This will likely prove highly effective in South Africa where companies are acquiring potential mining-lucrative properties but lack the expertise and capacity to develop full projects.