Trollope Mining Services: Phoenix from the ashes

With prevailing economic conditions throwing up a range of challenges for business, there is much to be said for spreading risk. Having experienced first-hand, the severity of plummeting coal prices in 2008, Trollope Mining Services has realigned its business to mitigate the effects of prices, through diversity.Trollope01

Headquartered in Johannesburg, Trollope Mining Services provides surface mining expertise and services to the mining industry. These include opencast mining, rehabilitation, bulk earthworks, plant hire and road construction. Much of the work involves excavating land and then drilling and blasting, stock-piling usable materials and removing any rubble.

The company has resurfaced from a tumultuous period in 2008, which almost spelled the end of a business which has served the domestic coal industry since 1975. The company was established by two brothers, Peter and John Trollope, who had purchased a bulldozer from a military auction and started to use their newly purchased equipment to clear bush at local iron ores mines. The business quickly gathered pace and required the brothers to increase their capital expenditure, which was stored on the family farm, approximately two and a half hours north of Johannesburg.

By 1999 the company had grown sufficiently to become the target of a takeover by a Black Economic Empowerment company which was rolled up into the Mvelaphanda Group. Today the business is 30 per cent owned by a BEE company called Mntungwa while John, Peter and Danie Le Roux own 70 per cent of the business.

In 2000 Trollope Mining was relocated to its present head office and was still very much immersed in coal mining, relying heavily on a contract with Xstrata Coal. Operations remained relatively unchanged until 2008 when the price of coal plummeted and the company’s fortunes took a dramatic turn for the worse. At that point roughly 98 per cent of the business revenue derived from coal, but the price of coal fell to just 50 dollars a ton wiping out 90 per cent of turnover in one month.

Trollope02The company survived the crisis and phoenix-like was able to rise from the ashes, having learnt a harsh lesson. Within two years Trollope had appointed Guy Hopkins as new Managing Director. Hailing from a civil engineering background with a particular focus on construction, Hopkins was assigned the task of reorganising Trollope to serve other mining sectors and hence to spread the company’s risk.

Speaking earlier this year, Hopkins reflected on the effect of the changes: “It has been a gradual process but from an operating turnover of 278 million Rand in 2010 we should achieve 700 million Rand this year,” he predicted.

The company now serves over 14 different clients as far afield as Australia, Spain and Turkey, who are involved not only with coal but also manganese, gold and platinum. Trollope also focuses on providing services for junior mining companies who may not necessarily have the equipment or funding to purchase machinery needed to crush or move earth.

One significant aspect of the change in market focus was that Trollope needed to re-evaluate its existing fleet of machinery and vehicles. By moving into hard rock work, the excavators, crushers and dump trucks already in operation were inadequate, meaning the company had to embark on an ambitious replacement programme to larger vehicles.

The investment programme eventually cost in the region of 300 million Rand, with Trollope adding dump trucks of between 40 and 100 tonnes to its fleet. The process of procurement is an ongoing one however, with excavators having an average shelf life of 18 months.

Trollope03Hopkins indicated that the company operates around 200 core pieces of equipment with a further 200 available for use when necessary. In addition to its Johannesburg headquarters, Trollope runs a series of workshops and has other sites based in Thabazimbi and Jurmal.

The remoteness of many of the mining sites, has lead the company to operate workshops at every location, meaning essential maintenance can be carried out with the minimum of operational delay.

At present the company has roughly a dozen live projects and routine maintenance and minor repairs are carried out on-site at each location as necessary. More complex work takes place in the 300-square metre Johannesburg workshop, built in 2009 and housing ten bays including a paint shop, an engine & transmission rebuilding shop, a boilermaker shop, auto electrician division and hydraulic cylinder rebuilding shop.

The philosophy of spreading risk continues apace, with the company still looking at opportunities to expand, as Hopkins eluded earlier this year; “Having traditionally been involved in opencast mining up to the run-of-mine stockpile stage, we plan to extend our services to include crushing, screening and washing, as well as becoming more active in other minerals including uranium, gold, copper, platinum, andalusite, iron-ore, nickel and chrome.”

In addition to its traditional activities, Trollope is increasingly looking at opportunities to deliver infrastructure solutions for both the mining and private sector, including the construction of roads – something that the South African Government has announced as an important focus for expenditure. The company can also offer environmental services such as rehabilitation programmes, construction and maintenance of environmental facilities and mine closing requirements.

Trollope04Of course quality and safety are essential aspects of Trollope’s business and the company has been working towards ISO accreditation, which will potentially open up new frontiers such as Canada, Germany and the United States. Closer to home the business is also turning to opportunities across the SADC region, including Namibia, Botswana, Zimbabwe and Zambia, as well as parts of West Africa.

Trollope Mining Services is committed to empowerment at all levels and has embraced Black Economic Empowerment. The company has implemented an employment equity plan with set targets, including affirmative action in all activities and tolerance of all cultures represented in the workforce. It has also devised a procurement strategy to meet BEE requirements, increasing the percentage of goods and services it purchases from black empowered companies.

As part of its quality drive, Trollope has embedded a management development plan designed to identify and nurture the next generation of black managers. By the time these managers are in place, Trollope Mining Services will be a long way removed from the business so nearly destroyed by the coal crisis.