Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
By IAN ROSS – Norther Ontario Business
Mining is a core Canadian industry and Sudbury’s Robert Lipic has been at the centre of it for more than 40 years.
“Never in my fondest dreams did I ever envision I’d be in the mining equipment business and banging on international doors to open up new markets,” says the 64-year-old president and CEO of Mining Technologies International (MTI).
It was an evolution for the Welland-born Lipic with aspirations on working in his father’s aggregate hauling and quarry business in southern Ontario.
Attending the famed Haileybury School of Mines in the mid-1960s got him hooked on hard rock mining. His love of outdoor sports and various jobs underground, in mineral exploration, mine development and sales have kept him in the North.
The 340-employee firm with production facilities in Sudbury and North Bay enjoyed rapid success internationally in Chile, Peru and Australia when it was established 13 years ago.
Where once exports made up 65 to 70 per cent of MTI’s production, today it’s shifted to 70 per cent domestic.
Hydraulic drill and long-haul jumbos, LHD loaders, mine locomotives, rail haulage and bucket systems head to clients across Ontario, northern Quebec and into the U.S. Southwest.
The 1996-2003 period were tough times for many mining equipment companies. They either closed, merged or were absorbed.
But MTI stayed completely intact. Always an active exporter to Latin America, Lipic downsized his operation from eight to three plants.
“We got smarter, added production equipment, enhanced our ability to turn things out faster and maximized floor space.”
With today’s robust mineral market, he’s thinking about expanding capacity again and is eyeballing Romania, the Balkans and Eastern Europe.
Developing the next generation of mining equipment is always a huge priority for him.
The company is testing a new hybrid electric diesel load haul dump at the CANMET test mine in Val-d’Or, Quebec.
MTI is also researching the use of hydrogen-powered vehicles to eliminate particulate and nitrous oxide gases in underground mining. These leading edge vehicles should hit the market in late 2009 or early 2010.
“It will represent a huge breakthrough for our industry,” says Lipic.
His dealings with overseas clients have allowed him to hone his negotiating skills.
Lipic says the always price-conscious Chinese are master hagglers.
Once the lowest bid is selected, there’s a series of so-called “technical sessions to beat you up on the prices again.”
Marathon negotiating sessions with few or no breaks is common. Russian tactics are similar with 18 to 20 hour sessions often with five negotiators in the room against him.
“They want to see if you are the kind of guy they want to do business with. The biggest skill you bring to the table is knowing your costs.
“The last contract I negotiated in Russia was a brutal five and half days of 16 to 20 hours every day.”
His travels have introduced him to international cuisine of all kinds.
Lipic has eaten everything that walks, crawls or flies while on business in central Africa and the Far East. On one occasion in China, a live snake was introduced, the head was cut off with the blood drained into a carafe decanter and mixed with Chinese liquore to toast one’s good health.
In many Asian countries, stray dogs are caught and boiled in large pots out in the open.
Lipic has even put himself in precarious situations. While travelling by car in the southern Philippine islands in the early 1990s, he took gunfire from Communist rebels, but emerged unscathed.
“It’s been challenging every day of my life. But being in a difficult situation only makes you stronger once you figure out a solution to the problem. It’s a learning curve and I welcome it. The tougher the problem is, the better I like it.”
