Q&A – Adam Waugh
Since Adam Waugh joined BlueRock Diamonds as CEO, the company has undergone a mini revolution, following a number of issues, including poor machinery. He tells Gary Peters what has changed and why the future now looks a lot brighter.
Tell me more about BlueRock diamonds.
It was formed in 2013, looking for diamond mining assets in South Africa. It was the brainchild of our chairman, Paul Beck, who is South African by birth and has had previous mining interests in the area.
Within about 12 months, we started the Kareevlei Diamond Mine, Kimberley region, which is currently our only asset. This has a total of 3,000 hectares. The diamond deposits were originally discovered by De Beers in the mid-1990s, and they did some work on it, but didn’t mine it. It was then acquired by an Australian company, which did some fairly extensive drilling reports and general background studies.
We then bought the mine in late 2013. The rights were transferred to us and we set about analysing the previous drill data. At that stage, there were five known kimberlite pipes on the estate – that’s what we’re mining at the moment.
Mining started in 2014. We are now mining two of our five kimberlite pipes, and we have been in full production since the end of 2015.
How did you end up at BlueRock?
I started off working in a UK quarrying business, and there picked up some mining experience. I then spent most of my career in financial services, raising money for small companies. From that, I joined a number of companies as an advisor and non-executive director, which is how I got involved in BlueRock Diamonds in 2016.
What takes up most of your time?
I’d say 70-80% is concentrating on the Kareevlei project. We’re still in the process of ramping up production, so it’s about getting the operation into a more regular, smooth running format. Within that, we’ve had changes of senior staff and all of our primary contractors.
Have those changes had an impact?
Yes. Initially, the production was running at about 7,000-9,000 tonnes a month, and now it is 25,000 tonnes. That came about after changing the shift patterns – before we were running only during the day, whereas now it’s 24/7.
We were also let down by some of the load and haul contracting we had, with poor machinery. That has since been changed. We’ve also employed people to move into roles like mine manager and in-house geologists, so we have more specific expertise.
What are the working conditions/regulations in South Africa?
We are regulated by the government body, the South African Department of Mineral Resources (DMR).
It can be onerous, and they can curtail mining operations if you don’t comply. We’re in a highly regulated environment and we must work within that, otherwise we will fall foul.
Does that make it a challenging environment to work in?
It did when I arrived at the company, but not any more. When I joined, we weren’t compliant in quite a few areas, so we had a lot of work to do.
However, we now have a new culture and operations team that works strictly within the DMR’s guidelines, so it no longer causes any long-term concerns. There’s a culture that you need to work in.
What changes have you made to meet the regulations?
There are two specific things. One is with the load and haul operations. All machinery provided by the original contractor failed a DMR inspection and the decision was taken to change contractor.
Individual bits of equipment failed on the basis of not being compliant because of poor lighting, bad brakes, or substandard lifting equipment.
The second thing is, in a mining operation you have codes of practice, which are site-specific. We had failed to put together our own, but that’s something we have rectified now, with up to 14 individual codes that are relevant to us.
Since I joined, the workforce has doubled, the senior teams have changed, as have the main contractors – load and haul, and drilling.
It’s fair to say that if you came to the mine today, compared to the beginning of 2016, you would see a very different project.
Without those changes, was the project in danger of collapsing?
It would have failed. I don’t think anybody can be in any doubt about that. We were substandard in many areas.
Looking ahead, how do you expect the company to grow?
At this stage, the focus is on the Kareevlei project, and making it as efficient as possible. We have been offered plenty of other opportunities, but we have turned them down partly on merit, but also because I don’t want to deflect our time and focus from where it is at the moment