How to build a mining culture that drives innovation, sustainability

7 minute read 25 Sep. 2020
By Jeff Swinoga

EY Canada National Mining and Metals Co-Leader, Board Member of PDAC

Bringing a strategic perspective to clients. Accomplished speaker and presenter. Passions include playing tennis, guitar and cycling.

7 minute read 25 Sep. 2020
Related topics Mining and metals

Jody Kuzenko, President & CEO of Torex Gold Resources, on why culture is key to drive productivity, innovation and social responsibility.

Torex Gold Resources Inc. is an intermediate gold producer based in Canada, engaged in the exploration, development and operation of its Morelos Gold Property, an area in the highly prospective Guerrero Gold Belt located southwest of Mexico City. There, the company’s assets include the El Limón-Guajes (ELG) mining complex, which comprises the El Limón, Guajes and El Limón Sur open pits, the ELG Underground Mine and a processing plant and related infrastructure. The company’s Media Luna project, an early stage development project located seven kilometres from ELG, is currently in feasibility study, which is expected to be completed in 2021.

Jody Kuzenko, rising star in the mining and metals sector and recently appointed President and Chief Executive Officer of Torex Gold, sat down with Jeff Swinoga, EY Canada Mining & Metals Co-Leader.

How is having a strong organizational culture vital to achieving your goals?

Mining is a complex industry. We take rock from the depths of the earth and transform it into saleable product at a profit. Doing that safely can be complicated work. And one of the more challenging elements of it all is that it takes a lot of people to do it — thousands of people, in fact, who need to be organized safely to understand the same workflow and move in the same direction. So that means that workplace culture is absolutely critical.

Torex Gold understood how to create a workplace culture that is productive, profitable and safe from the very beginning — particularly against the social backdrop of a complex part of the world like Guerrero, Mexico, where we operate. From the outset, we’ve been deliberate and systematic about creating a culture where employees are engaged and willingly come to work every day and give us the best they’ve got.

From the outset, we’ve been deliberate and systematic about creating a culture where employees are engaged and willingly come to work every day and give us the best they’ve got.
Jody Kuzenko
President & CEO, Torex Gold Resources

This all started with choosing a framework that works for us: Systems Leadership. Put simply, this is a series of interconnected models that, when used correctly, empowers team leads to be effective leaders and use the tools — including behaviours, systems of work and symbols — available to them. We use this framework in tandem with deeply held values such as trust, love, courage, dignity, honesty and fairness. At Torex, values are not written and rewritten. We believe that operating consistently by those six universal values creates a long-term, positive work culture.

This approach speaks for itself. Our safety performance is at a record high, not only for the company, but as a benchmark for the industry. We’ve now achieved eight million hours lost-time injury free. We’ve built excellent relationships with local communities, regulators and all stakeholders. And even through the COVID-19 crisis, our people are implementing new controls and rising up to deliver on new projects. I believe that’s a true testament to the culture we have at Torex Gold.

How do you operate in a landscape with heightened stakeholder concerns on environmental, social and governance (ESG) factors?

It goes without saying that being a socially responsible operator is no longer a nice to do, but is now part of the mandate. Investors no longer want to partner with or invest in companies that have a compromised reputation — whether it’s because of a poor safety record, community relations, environmental footprint or questionable governance. On the flip side, there’s plenty of evidence that shows investors want to do business with companies that are viewed to be best in class in the ESG space. As do customers, suppliers and prospective talent.

For Torex, social license isn’t just about creating a business advantage. It’s the way we carry ourselves and has become part of our philosophy. We will continue to deliver value for our shareholders, of course, but we’ll do so in a way that’s positive for society and makes a difference in the lives of people around us.

Our asset in Guerrero, for example, started from nothing and has been built up to deliver prosperity for thousands of people. We have 11 different community development agreements, which we call CODECOPs, which are meant to address the unique interests and concerns of the different local communities around us. Through those agreements, direct investment in projects and royalties we pay to the Mexican Government for community development, we spent more than US$13m in 2019 in our neighbouring communities to build churches, schools, medical centres and access to education for individuals who may not otherwise have that.

Our ESG commitment extends to the environmental space as well, as the Guerrero asset is built and operated to Canadian standards, effectively as a zero-discharge site.

It’s also important that we weave innovation into our ESG platform, which we are doing in two ways:

  1. RopeCon: we have a 1.3 km conveyor that bridges a 400-metre vertical delta, from the top of the pit to the processing plant. That conveyor was designed and installed to mitigate a safety risk associated with loaded haul trucks driving down steep switchbacks. But it also has economic benefits since it generates most of its own power and reduces GHG and dust emissions.
  2. Tailings storage: we’ve built a filtered tailing storage facility instead of conventional tailings. Spending more capital up front for the system was worth mitigating the long-term ESG risk associated with tailings catastrophes. Plus, it uses about 1.5 million cubic metres less water than traditional impoundments. In areas where we want to contain the environmental footprint, mitigate the risk with dam failure and not overuse water, it’s definitely been the right choice.

How do you nurture a culture of innovation?

Innovation is a key part of our DNA. We’ve never been afraid of it and have always embraced it, even when others were a little afraid. This culture helps us deliver significant value and mitigate risk in a way that makes us different.

There are a few things that play into building this culture. The first is having the courage to do things differently — having a dissatisfaction with the status quo. It also comes from active listening by leaders — sometimes the best and most innovative ideas come the front lines where the pain points are experienced firsthand. An innovative culture needs a good dose of patience, perseverance and an eye on the long game. And it needs to be celebrated. Not just the successes, but also the failures.

But with innovation, I will give a warning. Organizations tend to get focused on the new flashy things and forget to put people first. Without considering how people will come together around new processes or pieces of equipment, the benefits can easily be eroded. More focus needs to be on change management, skills upgrading and training. If you’re going to foster an effective culture of innovation, you need to bring your people along with you.

Touching on innovation, can you describe the Muckahi Mining System?

The Muckahi Mining System is a proprietary innovation at Torex that’s in active testing in our El Limón Deep deposit in Mexico. Where a traditional underground mine uses scoops and haul trucks to carry ore to the surface in a batch or discontinuous process, Muckahi uses roof-mounted, monorail equipment that carries ore out in a conveyor using continuous transportation. By eliminating trucks, Co2 emissions are expected to be reduced as much as 95% from conventional mining techniques. Another benefit is that by hanging equipment from a monorail, you can drive tunnels four times as steep, meaning that you can cover the same elevation change in a quarter of the distance.

There’s no doubt that Muckahi has the potential to deliver a material capital expenditure and operating expense benefit, and become a real game changer for the mining industry.

What excites you about the future of Torex Gold?

We’re fortunate to have excellent assets in the Guerrero gold belt and, on top of that, have an amazing team. It’s exciting for me to get to work with people who are highly engaged, capable, skilled and experienced to make the most out of that asset in a highly prospective region. We’re also looking to continue generating cash out of El Limón, which is known to be best in class for margins and cash production, and maintaining our health and safety track record.

Looking mid-term, we want to de-risk and build up our Media Luna asset, which has the potential to add more than a decade to our mine life in Mexico. Working towards these goals will allow us to generate cash to pursue growth opportunities to acquire outside assets that enable profitable and productive geographic diversification.

What advice would you give for women in mining?

There’s one piece of advice that I like to give to both men and women: work hard, work with purpose and stay true to your values. When I say work with purpose, I mean build constructive relationships, make a positive difference in the lives you touch and leave the planet cleaner than you found it. As miners, we’re forced to go where the metal is, and these places are made up of all sorts of different social conditions. Working with purpose needs to be the platform for how you operate.

For women in particular, my advice is this: be brave. To the new women coming up in mining and metals, push yourself behind what you think you can do, apply for challenging roles that make you uncomfortable, seek out mentorship and categorically reject the notion that you have to be perfect and not make mistakes. If we help more talented women do this, they will earn their rightful place in leadership positions.

Summary

Recently appointed President and CEO of Torex Gold Resources Inc., Jody Kuzenko shares her thoughts on the importance of building a strong workplace culture that can withstand any crisis to be more productive and innovative to achieve long-term goals and build a socially responsible organization.

About this article

By Jeff Swinoga

EY Canada National Mining and Metals Co-Leader, Board Member of PDAC

Bringing a strategic perspective to clients. Accomplished speaker and presenter. Passions include playing tennis, guitar and cycling.

Related topics Mining and metals