CSA Mine’s new owners take over

Glencore’s sale of Cobar’s CSA Mine was finalised on Friday with new owners MAC (Metals Acquisition Corp) personnel arriving on site on Friday afternoon to brief staff and contractors about what changes will take place as a result of the sale. MAC CEO Mick McMullen and other MAC board members will be on site up until shift change today communicating the changes to all personnel.
Mr McMullen spoke with The Cobar Weekly on Monday and said the changeover process had been running smoothly. See Pages 3 and 4 for more information about the sale and expected changes at the mine including the appointment of a new general manager.
▪ Photo by Klae McGuinness Photography

MAC CEO outlines future plans for the CSA Mine

The sale of Cobar’s CSA Mine from Glencore to Metals Acquisition Corp (MAC) was finalised on Friday with the mine welcoming its 5th owner in 58 years of operation.

Glencore, who has owned the mine since 1999, received USD$775 million in cash and USD$100 million in shares (Glenore will hold 20.6 per cent of shares in MAC) in the sale.

The transaction also included USD$75 million deferred payment to be paid within 12 months, USD$150 million contingent payment on future copper prices and a 1.5 per cent life of mine Net Smelter Return royalty.

MAC has now assumed ownership and taken full control of the running of the mine.

MAC’s CEO Mick McMullen, who was in Cobar when the sale was finalised, sat down with The Cobar Weekly on Monday to talk about their future plans and the immediate changes that are taking place.

The Coonamble-born CEO, who has 29 years experience in various facets of the mining industry, knows the Cobar basin well.

He said he has had an interest in the area, and in particular the CSA Mine, for some years.

Mr McMullen was thrilled when the long sale process was finalised on Friday.

“This is a phenomenal ore body.

“It’s had a 5-6 year reserve life since 1967.

“It’s got the highest grade copper mine around pretty well anywhere and I think it’s the best place to operate globally,” Mr McMullen said.

“You cannot get better than Cobar.

“I’ve gone from Coonamble to the University of Newcastle, and then worked all over the world.

“It’s location, the geology is great, there’s a fantastic ore body, the ability to get permanent staff, the ability to work with the community, the Shire is incredibly supportive, there’s a pro mining culture, there’s a skilled workforce here and you don’t have a lot of competing land users,” he said.

“I don’t think you can get a better place to operate than Cobar.”

Mr McMullen said while there are no real plans for staff restructuring, the mine’s current General Manager, Glencore’s Peter Christen, will be seconded for three months for the handover process to the new GM, Robert Walker.

“Everyone else is employed by CMPL [Cobar Management P/L] and we bought CMPL so everybody is on the same contracts,” Mr McMullen said.

He said some staff have asked about voluntary redundancies and there may be some opportunities for redundancies, “but in general we’re not planning on major reorganisation”.

“There are no plans at this stage to change the current workforce mix.

“We intend to be majority owner-operated.”

CSA will not be going to contractor operations.

Mr McMullen said a small contractor workforce (like what is currently in place) will support the owner-operated workforce.

“We’d like to keep as much of the work force as residential as possible,” he said.

Mr McMullen said there are however a few hurdles in doing that with a current lack of childcare facilities and a shortage of housing in Cobar.

“There’s a shortage of housing everywhere and we’re aware there is also a shortage of “high quality” housing.”

He said they will be looking at what they can do to encourage families to come here.

“Because ultimately it’s the families that you want to come here, it’s in our interests to get people to work out of here because once they’ve moved here it’s a bigger hurdle for them to then pack up and move again and change jobs.

“From a selfish point of view, we want the workforce to actually be located in Cobar as much as possible but it’s not just about how much you pay them to come here, it’s about: Can they get a good quality house? Can they get childcare? If the husband’s working here can the wife do something?

“We probably need to do a bit more [in that area] than what the mines have been doing,” Mr McMullen said.

Mr McMullen said while MAC’s previous business style has been buying businesses, improving them and then on-selling, he said that’s not their focus for CSA.

He said their plan is for CSA to become the cornerstone asset in what management believes can be a multi asset mid-tier company focused on producing decarbonzation metals.

“MAC will remain focused on low-risk jurisdictions and on assets that have opportunity for operational improvement,” he said.

“This business has been part of a very large company with operations all over the world and that’s led to a certain amount of bureaucracy that they needed to have,” Mr McMullen said.

He said as a smaller company, MAC did not need that level of bureaucracy and he hoped it would mean that CSA could be run more efficiently and increase its production.

“I think the mine has lost its way a little bit over the past five or six years.

“If you go back to 2017, morale was much better, the culture was much better, the performance was much better.

“I’m hoping the main change that people see in the business is that we make life easier and a bit more user-friendly to actually get the copper out of the ground,” he said.

“From a culture point of view we want to get back to a more high performing culture and we see a lot of opportunity to find incremental stuff and get that through the processing plant because there’s a lot of excess capacity there.

“The current reserve life is about seven years but we know there is additional resources for about another seven years on top of that.”

Mr McMullen said the company’s investors share his excitement in the mine’s potential with one visiting investor from Brazil doubling his initial investment from USD$25 million to USD$50 million.

One thing that’s not changing in the business is the accounting system.

“I know some people would like to see it change but some of its problems comes from the way it’s set up from Glencore,” Mr McMullen said.

“One of the things we actually changed today is a lot of the rules around sole source vendors and the ability to actually get stuff into the system.

“Some of the procurement decisions in the past have been made by people who don’t understand Western NSW.

“We will gradually build all that Australian stuff out of Johannesburg and in to Australia.

“It won’t happen tomorrow, but it is happening,” he said.

“We do have a policy of shopping locally where possible and when competitive.

He said as CSA Mine is a very important part of the community, they will be working hard to make sure it will be seen that way.

“MAC would like to have a stronger local presence and be seen more in the community all the time, not just at special events.

“CSA is a great mine and with certain changes to processes, we expect to improve the overall performance of the operation.”