Centrex Metals : Knowledge is the rock of ages


There’s a lot to learn when you work for a company like BHP and there’s even more to learn when you jump from a mining giant to a small company that has only been in existence for 13 years. Yet Ben Hammond has taken it all in his stride and this young gun applies every ounce of knowledge gained from his MBA to his practical experience to create the best opportunities for the companies he has worked for. Now, Centrex Metals is benefiting from his expertise. He speaks with Jonathan Jackson.

Ben Hammond wanted to work in economics, but he found himself studying geology, became a geologist, worked for BHP and is now the CEO of Centrex Metals. The four years he spent at BHP were invaluable, particularly when he moved away from geology and into business improvement.

“That was the best thing I ever did, because that allowed to me work across the business,” Ben says. “I worked in ports, rail and maintenance and had little to do with geology for a few years there.”

The BHP business improvement program, which allowed its employees to cross all its business sectors, helped Ben to fine tune several skills that go a long way in business management in both big and small companies.

“You’re not working full-time in any one area, you’re  gaining experience in all areas from long-term planning, through to processing rail ports and dealing with investors and staff at all levels from a whole supply chain point of view.”

Ben gained knowledge in a myriad of areas.

“It helps to know a bit about a lot of things across the business, especially if you are moving into a smaller company with fewer resources. It’s not like a big company where you have experts in specific areas to lean on. Although you can’t be an expert in all areas it helps to at least be able to ask the right questions particularly in a small company where you’re relying on a lot of external consultants.  The actual business improvement side helped me a lot as well: having all those statistics in your head, the various parts of the operations and their expected efficiencies or where the bottlenecks may be, and just knowing which key areas to deal with first. I also had involvement with the technical marketing that aided to understand the customer’s end. So all this as a background coming into Centrex was very handy.”

During the first 6 years of his career Ben was also studying his MBA through correspondence as he moved from town to town, and state to state. It was an MBA designed for engineers, and related back to mining and petroleum, so held him in good stead.

“I could apply it directly back to everything I did. I wouldn’t recommend an MBA to someone who already has a commercial background, but, certainly for a geologist, scientist, or an engineer, I think it’s perfect because it gives you those extra commercial skills you don’t necessarily have.”


When Ben moved to Centrex Metals in 2007 as project manager he made an immediate impact, jumping straight into the deep end to help facilitate negotiations with Baotou Iron & Steel on the Bungalow Magnetite Joint Venture located on the northern Eyre Peninsula, South Australia. While a HOA for the joint venture was already in place, technical due diligence was just starting and detailed agreements required drafting, allowing Ben to apply both his technical and commercial skill sets.

“What certainly became clear was there was still a long way to go to actually get a joint venture in place and most of that was on the technical, due diligence side. So my first role was to really convince them.”

While the negotiations with Baotou were ongoing, in 2008 he commenced marketing the Company’s projects on the southern Eyre Peninsula which lead to negotiations for the Eyre Iron Magnetite Joint Venture with Wuhan Iron & Steel.

After protracted negotiations with the two Chinese steel majors and investment approvals processes, both of the joint venture transactions were completed in 2010.

The Bungalow joint venture gives Baotou the right to a 50% interest in the Bungalow magnetite project by spending the first $40 million on development. To date Baotou has spent $24 million and the project has defined 338Mt of Mineral Resources. The project is currently the subject of a Prefeasibility Study targeting a 5Mtpa magnetite concentrate operation.

For their 60% interest in the Eyre Iron Magnetite Joint Venture, Wuhan paid Centrex $78 million directly plus a further $75 million in development funding. The joint venture’s flagship project at Fusion has 680Mt of Mineral Resources to date and further drilling is underway to expand the resources and complete a Prefeasibility Study for another 5Mtpa magnetite concentrate operation.

Both magnetite joint ventures will transport the products between 40km and 100km to Centrex’s Port Spencer development, another joint venture with Wuhan.

“The $78 million we got directly into the company as part of the Wuhan deal is really why we’re in such a strong cash position right now. We moved early to a model where we didn’t have to rely on the equity markets over here.”

Commencement of the Eyre Iron Magnetite Joint Venture between Centrex and Wuhan saw him seconded at the desire of the Chinese as Chief Operating Officer to Eyre Iron Pty Ltd, the joint venture management company, to oversee its implementation. He spent two years in the role at the same time as he was fulfilling his role as Chief Development Officer at Centrex, before being appointed acting CEO of Centrex in February 2013 and CEO in July. He remains a Director of Eyre Iron as well as Port Spencer Pty Ltd. Ben could see what needed to be done to move Centrex forward while he was in the role of Chief Development Officer. His goal was to take Centrex back to a company that developed projects rather than another aspiring miner.


“The biggest aspect we’ve started working on, that’s resulted in a supplementary deal with Wuhan recently, is to try to isolate the equity needs of the joint ventures from the parent company, and to free up our cash and allow us to keep repeating the model of developing projects and finding foreign partners.”

In 2013 Ben worked on yet another Chinese backed joint venture. The Goulburn zinc-lead project is located in the Lachlan Fold Belt in New South Wales. Geophysical mapping of the project has shown promising conductor targets located on the edge of a major gravity high adjacent historically defined zinc, lead and copper mineralisation. Shandong 5th Geo-Mineral Prospecting Institute has signed a joint venture agreement to spend $2 million on exploration in 2014 to earn a 35% interest. Shandong have further options to earn up to 80% by funding a project through to production should a deposit be defined. Completion of the joint venture awaits Chinese Government approvals.

“A big part of marketing and negotiations has been preparing presentations and learning how the Chinese digest and respond to information. I think that’s the key learning we’ve had in this company is how to present information to the Chinese – it is critical. You have to realise the levels of the organisation you’re presenting to. The right information has to go to the right departments.”

 The development strategy has the support of shareholders. Ben says the company is very tightly held, with the top 20 shareholders owning nearly 80% of the business. This causes liquidity challenges, but at the same time relationships are close and everyone is on board with the direction.

As the mining industry has softened, Centrex’s biggest opportunity but also challenge is to look for acquisitions.

“We reviewed hundreds of opportunities and it’s finding those next projects that is becoming more difficult, certainly outside of the majors,” Ben says.

And there are related problems.

“The industry needs more competition. If the country’s going to grow its resources to be able to compete with other resource rich countries, costs need to come down, we’re starting to see that already but it’s got some way to go yet. Land access actually is one of the greatest issues facing the industry at the moment. Many of the remaining exploration opportunities are in higher use land areas.”

“So we’re being proactive in terms of land access. We’re not going to shy away from it; we’ll try and find commercial solutions. We’ve had great success on the Eyre Peninsula and NSW to date. We’re the first in 20 years to get on at Goulburn, so we’re trying to build a competitive advantage in that area and I think that’s the next frontier.”

The strength of Centrex is that it can leverage between each project; there are great synergies that allow this to happen even though the company operates across two regions. Ben is also looking at new technologies and ways to ease the burdens on the company. Recently he adopted a new style transhipping model for the Port Spencer Joint Venture on the Eyre Peninsula.

“Ports have always been a challenge, particularly for iron ore, but we were certainly watching the developments in transhipping up the coast from us, and after 12 months could see it would be a successful model. It’s a major step change in technology. Traditionally just the operating costs could be prohibitive, but these new ‘mini-ships’ are self-unloading and self-mooring, so they can compete on operating costs, while reducing the port and infrastructure costs dramatically. Our jetty length significantly reduced and we don’t need a full size wharf, we only need a point ship loader as they can move themselves underneath it for loading. We knocked almost half the capital off and yet can still ramp up with multiple or larger transhippers. This kind of solution allows a smaller project to justify its own port.”

Ben is looking at autonomous mining and new technologies around non-invasive exploration to aid in the land access issues. He sees his role as seeking out potential opportunities and getting foreign investors on board. It’s been a quick rise, but you feel his skills acquired across a range of projects and large and small business holds Centrex in good stead. BF


Business First is a peer-to-peer magazine: written by CEOs and other high level executives, with interviews with some of the country’s best leaders.

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