How shifting to CSG helped firm survive

Equipment supplier MAC’S Engineering has looked to diversification as a way to survive the mining downturn.

The company acted swiftly as the downturn hit and realised it could invest in the coal seam gas industry as a way to survive the downturn.

The company also decided to shift away from open cut coal mining and looked at how they can better use their sheds, The Daily Mercury reported.

“When the major mining houses are driving down costs, everyone down the supply chain has to do it,” company director Mortess said.

“So we looked top to bottom, left to right.

“We’ve been quite successful diversifying into coal seam gas, which was part of a strategy that started two years ago,” Mortess said.

“That was planned as part of overall growth, so there was no luck involved in it. But it’s proved to definitely be the right decision.”

Open cut coal comprised of 65-70 per cent of the company’s core operations. But the company is branching out acquiring more work from companies like Aurizon, Ergon and Powerlink.

“We’ve had to get back in there to generate sales and build that side of the business.”

Australia's coal sector has been going through a tumultuous phase as commodity prices fall and operating costs increase.

One industry association said over 9000 jobs have disappeared in the last 15 months until May.

MAC’S Engineering has a workforce of 85 people in Mackay and Brisbane and Mortess is one of four directors of the engineering company.

While the company is positive about its prospects, the directors rated the current mining downturn as the worst in 25 years.

“It’s not going to end tomorrow, but what I’m hearing, being on the board of MAIN, is that the fundamentals for coal demand are good globally, though we are still going through that process of resetting.

“And we are told that our coal product is very highly sought-after by the major take-up companies of India and China. Demand is strong and it will climb,” he said.

Australian Mining recently reported China will regulate higher coal quality import standards, which could increase demand for Australia's high energy coal.

He added that while factors out of anyone’s control brought about the mining downturn, Australian miners must become cost effective.

There have been job cuts at MAC’S Engineering, while some workers shifted to the Brisbane manufacturing facility, which has a focus towards the CSG sector.

Queensland coalfields saw 1000 jobs disappear in a week earlier this year bringing state-wide mine job losses to more than 7000 since early 2012.

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