Macraes around for a while yet

An ore spotter (left) guides the excavator scooping rock in its 40-tonne bucket in the Coronation...
An ore spotter (left) guides the excavator scooping rock in its 40-tonne bucket in the Coronation pit at Macraes mine. PHOTOS: STEPHEN JAQUIERY
OceanaGold’s Macraes goldmine celebrates its 30th anniversary this year. Business editor Sally Rae talks to general manager Matt Hine about both the milestone and the mine’s future.

Expect Macraes goldmine to "be around for a while yet".

As a new decade dawns at the East Otago mine, against the backdrop of a healthy gold price, manager Matt Hine says there is little time to rest in the fast-paced mining industry.

Gold production at Macraes started on January 1, 1990, and the life of the mine was initially just seven years.

While it was good to reflect on the past and celebrate what had been achieved over those years, it needed to be "doing things differently tomorrow to stay in the game" and always striving to be better.

OceanaGold Macraes mine general manager Matt Hine stands near the processing plant.
OceanaGold Macraes mine general manager Matt Hine stands near the processing plant.
In the early days, that came out of necessity. Fifteen years ago, the gold price was about $US500-$600 ($NZ758-$910) an ounce; now it was more than $US1500.

While happy to take advantage of those prices, the company was also very mindful of the cyclical nature of the business.

Those in the industry needed to be resilient; they could not be stationary or they would get overtaken, he said.

The mine notched up two major milestones last year. In July, the five-millionth ounce of gold was poured, followed by its 10,000th gold bar in November, and this year was shaping up to be another busy year.

As always, there was an eye to the future and, when it came to the life of the mine, there were five to six years ahead the company could "see and touch" but he believed there was also potential beyond that.

Mr Hine was keen to be able to "clearly articulate" how much longer the mine was going to be there for.

 Work continues in the Coronation pit.
Work continues in the Coronation pit.
"We’d like to really solidify what our best life of mine looks like."

"We do have an underground coming to end of life; we need to understand how to transition out of that. We think we’ve got another underground project."

That project was at Golden Point where a pre-feasibility study, both technical and financial, was being undertaken.

By the middle of the year, the company should be in a position to understand where it sat as either stand-alone underground or open-pit potential.

That could potentially add four or five ‘‘plus’’ years as another underground mine. There were no guarantees but it was exciting.

"We know the gold’s there, we don’t know how much yet and if we can make that work," Mr Hine said.

The 30th anniversary would be marked towards the end of the year. Details of that were yet to be revealed but it would be doing something to celebrate its people and its community, paying homage to both for their support.

Macraes directly employed more than 550 people, while an additional 300 contractors then tap into other services.

A front-end loader moves rock in the Coronation pit.
A front-end loader moves rock in the Coronation pit.
The company was mindful of sourcing locally and the majority of its contractors and providers were local.

"We want the community to be better off for our involvement," Mr Hine said.

A report by KPMG on the economic, social and environmental contributions of OceanaGold to New Zealand in 2016 showed $330 million, or 88% of OceanaGold’s expenditure on its New Zealand operations, reached people and businesses in New Zealand through wages and procurement.

In 2016, 81% of employees lived locally to the Macraes site and 59% of employees lived locally to the Waihi site, resulting in $64 million of wages and benefits retained predominantly within the local districts of Waitaki, Dunedin, Hauraki and Tauranga. That year, it contributed almost $84 million to Otago’s GDP.

Mr Hine said the mine had a good reputation; many mines in Australia struggled to replicate its longevity or get close to what was being done there both in efficiencies and productivity.

Many employees had been there for 25 to 30 years and turnover was about 15%-20% which was well below industry average. When he left Kalgoorlie, it was 40% and that made it hard to build a good company culture.

A road grader is dwarfed by an excavator and dump trucks extracting rock in the Coronation pit....
A road grader is dwarfed by an excavator and dump trucks extracting rock in the Coronation pit. PHOTOS: STEPHEN JAQUIERY
The secret at Macraes was the "good people" and, for some staff, it was the only place they had ever worked. They also saw plenty of "repeat business", with people heading to Australia to further their experience and then later returning.

While it was great to be at the helm during another milestone year — Mr Hine acknowledged those involved, including in the past — who had played a major part in "helping us get there". He was ‘‘just one in the line’’ of a multitude of people who had contributed.

Quipping he was "doomed from the start", Mr Hine was born in the Western Australian mining town of Kalgoorlie — and third generation in a mining family — he was destined to follow in their boot-steps.

It was an industry that long appealed to him; he was attracted to the personalities involved — "there’s some great characters" — along with the global opportunities it afforded.

Its transient nature meant he attended about 10 different schools, including a stint in Turkey. After leaving school, he completed an engineering degree at the University of Queensland.

After working in various mines around Australia, he took on the Macraes position in July 2018.

Mr Hine acknowledged he was fortunate to have been brought up in the industry, so he understood the characters, the challenges and the dynamics of it.

He had also made it a focus to work in all aspects of the industry; when he came out of university as a qualified engineer, he did not work in that position for four years.

The processing plant where gold is extracted and cast.
The processing plant where gold is extracted and cast.
He believed that was important for any leader to have an appreciation and empathy for what people were being asked to do.

The role also required being a "people person’’— "it’s the people that make it" — and creating an environment in which employees enjoyed being there, where it was "not just punching the card".

With an engaging and fairly laidback manner, Mr Hine stressed the importance of ‘‘having a bit of fun’’ in the workplace.

He also wanted to be part of a management team that understood not just everyone’s name but also their story.

There were plenty of Kiwis working in the Australian mining industry and he believed New Zealanders did so well in the industry because of their work ethic and willingness to "get their hands dirty".

Macraes was now a multi-generational business and it was surprising how many employees had been there for the entire 30 years, he said.

An average wage at Macraes was about $100,000. While it paid well and it produced a lot of gold, it also cost it a lot to do that.

It was an industry that "demands the very best of you", lending itself to those with a baseline of resilience.

His own role was both rewarding and dynamic — one day he could be in the office working on a $100 million budget, the next a kilometre underground.

Open pit manager Kieran Rich  worked in mines around the world before moving to Otago.
Open pit manager Kieran Rich worked in mines around the world before moving to Otago.
One constant was change — technology in the mining industry was constantly evolving and the company was quick to adopt technology.

It was looking at technology, not just in the safety side — which included using driverless vehicles underground — but also around the environment, and using technology to lower emissions and usage, particularly for the likes of electricity.

Many of those ideas were being generated from the "bottom up" with ideas coming from the shop floor.

The mining industry, like anything in society, had plenty of challenges being put forward. But OceanaGold was a company that was "absolutely up for hitting these head on".

It recognised there was a big responsibility there and it held itself very accountable to execute on that responsibility. Social expectations continued to evolve and it was "up for the challenge".

It believed its business model would sustain it well into the future and it was not afraid to change and evolve. "We look forward to being around for a while yet."

Mining had its hazards but it was not dangerous if it was disciplined and diligent with how it managed those hazards, and so there was no reason why it should not expect its employees to get home every day.

It was something that the company was not complacent about and it genuinely believed it could be a harm-free workplace. He was proud of the safety performance at Macraes.

"I think we’re getting some great strides there and we’re very competitive on the world stage with our work environment."

OceanaGold was an international company — it listed on the stock exchange in 2003 and Macraes was the founding asset — and it provided a chance for Otago people to travel the world.

Even though the company had grown, that journey had started in Otago and there were still a ‘‘myriad of benefits’’ for the local region, Mr Hine said.

Many of the workforce lived in Dunedin where there was the good balance between work and being part of the community, with the associated financial benefits for the communities.

For many, the central location of the mine was appealing, close to many centres. Sometimes, Mr Hine even managed to play a round of golf at the Ardleigh course, in Palmerston, on his way home to Dunedin.

He was grateful for the support of his wife, Hailey, along with the team that surrounded him. It was a consuming role — as he described how he could write down a list of things to do for the day and never get to the bottom, yet more stuff kept coming on top — and so having a partner that was supportive of that work life was important.

The couple, who welcomed their first child — "Kiwi" son Max— earlier this month, loved living in Dunedin.

Fellow Australian, open pit mine manager Kieran Rich who arrived at Macraes in mid-August, graduated from the Western Australian School of Mines in 2009 as a mining engineer.

He did not come from a mining background — his father was an apiarist — and he originally looked at civil engineering. But having joined the mining industry, he had "never looked back".

He had worked in diverse locations as Suriname, on the northeastern coast of South America, and Zambia, where he would find zebras on his front lawn. Becoming a mine manager was a ‘‘real step up’’ and he was keen to eventually become a general manager of a mine.

Like Mr Hine, he loved the lifestyle Dunedin afforded and an attraction of the job was the ability to go home every night and spend time with wife Laura. Since starting work, he had always previously been on a fly-in and fly-out roster.

 

At a glance

  • OceanaGold is New Zealand’s largest producer of gold.
  • Its operating assets in New Zealand consist of two large open pit mines (Macraes, 30km, northwest of Palmerston, and Waihi) and four underground mines, including Frasers at Macraes.
  • Since commissioned, more than 5 million ounces of gold have been produced at Macraes.
  • OceanaGold (New Zealand Ltd) is a wholly owned subsidiary of OceanaGold Corporation, a publicly listed company on the Australian and Toronto stock exchanges.

 

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