"Because of the downturn, the mining industry was forced to step out of its comfort zone and seriously consider how to adapt. We have entered a stage in which change is not only being investigated, but starting to be implemented."
Can you provide a brief overview of VBKOM and the company’s evolution since its establishment in 2008?
GO: VBKOM is an engineering consultancy firm founded by five mining engineers with a dream to make success a reality for mining businesses across the African continent. South Africa has a rich history in mining, and all five founding partners have extensive expertise within this industry. We believe that we have something to offer, not only to South Africa, but the entire African continent, which is the focus of our company. We understand that the mining industry is cyclical, and therefore we have to be adaptable to what the industry is experiencing. We have set up a business that is robust in the sense that when an opportunity arises, we can grow, and if need be, we can also adapt to a contracted market as well.
VBKOM has managed to add value to clients who operate across a broad range of commodities. The company started as mining engineering experts, but we have added mining value chain capabilities to our portfolio, including geology, metallurgical and mineral processing, project management, project execution, financial modeling, risk management and continuous improvement. Recently, we added operational capabilities such as aerial and land base surveying.
Part of our core values is that we are in this business for our clients’ victories. The company is quite diverse in our focus areas, and the size of clients we target is also very broad. We can assist clients from initial exploration activities through to concept studies, implementation, operation and closure.
Where does VBKOM see the most opportunity in Africa from a geographic perspective?
GO: Due to ease of access, VBKOM is traditionally focused on the SADC region. There have been some positive political changes in African countries such as the DRC and Angola, and we believe that there is significant growth opportunities within these countries. We are keeping our eye on West Africa as we have strong gold expertise within our company. Mozambique is also a country that holds great opportunities in the future. VBKOM wants to align ourselves in such a way that when the opportunity arises, we are ready to take it on.
MK: VBKOM can serve the entire SADC region from our office in South Africa. In the future, we will probably open an office in West Africa, after which we will investigate opportunities in Central Africa and East Africa. When entering countries in Africa, we will always try to find the right local partner to complement our vision, mission and capabilities.
What are the reasons for VBKOM's decision to focus solely on the mining industry, and where does this put the company from a competitive standpoint?
MK: When VBKOM was established, we took a niche approach to our offering, which has served us really well. We initially focused our business on the open pit mining environment as there was not a lot of South African competition in this space. Although the team has a background in deep level mining, we saw the opportunity and gap in the market. In the next 10 years, the company will also start to examine opportunities in the deep level mining environment.
The company has skills and expertise that are not limited to the mining industry, such as financial modeling, risk management, project management and surveying. Over the next 10 years, our objective is to build out the company, and although the mining industry will remain a focus, we will look to expand our capabilities into other industries as well.
Can you elaborate on VBKOM’s growth strategy?
MK: There are two criteria for becoming an employee of VBKOM – you need to be smart, and you need to be passionate about the African continent. In 2014, we set a goal to grow our client base by tenfold in 10 years. At that time, the entire mining industry went through a downturn. The company managed to survive the downturn, which was quite a learning curve for a young organization such as ours. We have recovered over the past two years and are still on track to see accumulative growth and meet our objective.
What strategy did VBKOM employ to survive the downturn in the mining industry?
MK: Part of VBKOM’s DNA is to be adaptable and nimble. During the downturn, we had to adapt our strategy to the market, and a significant amount of our focus went into optimization. Now that the market has recovered, we still have the experience and capabilities to optimize operations for our clients.
Can you elaborate on the current trends in market demand that VBKOM is experiencing?
GO: There are companies that want an end-to-end solution, but this is not true for all mining organizations. A large proportion of our client base prefers a more niche approach, as they are cost sensitive and have put together their own end-to-end teams. The mining industry is notorious for its resistance to change, specifically with regards to innovation and technology. However, because of the downturn, the mining industry was forced to step out of its comfort zone and seriously consider how to adapt. We have entered a stage in which change is not only being investigated, but starting to be implemented. Technology is now being embraced by the industry.
MK: Approximately a decade ago, the mining industry was very much on its own when competing for capital. Today, the mining industry and projects within the mining industry are competing with all other industries. This puts a significant amount of focus on the financials and returns of the projects. The market has changed, and today techno-economic studies are becoming a focus.
What are VBKOM’s objectives and strategy moving forward into 2020?
MK: We are seeing precious metals making a comeback, and at VBKOM, we will position ourselves to best serve this segment of the mining industry. Our strategy moving forward will be guided by practical considerations as well as the political stability of regions where we have operations and want to expand. The company also has the objective to diversify our business and start looking at other industries such as oil & gas, energy, food security and infrastructure.