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Soderstrom’s secrets to success

fter 30 years dedicated to mining, There are varied reasons as to why com- ing] has a great opportunity to create and
Aserving some of the industry’s most panies are reluctant to engage external optimise strategic value of its assets such
well-known outfits, Sten Soderstrom consultants and seek external non-techni- as resources and reserves, processing
hasn’t come across one situation that has cal advice, however, Soderstrom is more knowledge, people, product value realisa-
been unsalvageable. concerned with those chief executives with tion, and seldom gets a second bite of the
It is a fair effort given that Soderstrom an open mind to ideas that will potentially cherry if it gets it wrong. Doing it right from
spent time on projects in Europe, Africa, add genuine project value. the beginning is therefore a key to success;
New Zealand and South East Asia, which First and foremost, establishing trust is I am motivated by seeing others succeed,”
would have presented challenges not nor- key for Soderstrom and he remained firm he said.
mally encountered in Australia. in the view that he wouldn’t enter a working – Mark Andrews
“Sten diligently protected Macraes’ inter- relationship without that being absolute.
ests at all times. I can unreservedly com- Creating a trust bank is done by starting For an expert strategic review of your cur-
mend him as a person of integrity and resil- with a level of empathy, understanding and rent or future projects contact
ient character who has extensive skills and knowledge of the situation with a client be- Sten on 1300 301 035 or visit
knowledge. Having maintained contact with fore the work to betterment begins, accord- www.MiningStrategicValuePartners.com.
him over the years and recently reading his ing to Soderstrom. au/Consult
book, I can highly recommend his services While Soderstrom has his relationship
to CEOs and senior executives in the min- building skills down to a fine art, he is cog-
ing industry,” former Macraes Mining Co nisant of the fact that “soft” skills aren’t mas-
chairman, now Lucapa Diamond Company tered by everyone. Sten Soderstrom
Ltd chairman, Miles Kennedy said of his for- Unlike the manufacturing, retail and ser-
mer colleague. vice industries which are driven by good
With the current global health crisis there people, customer relation skills and entail
is no better time to be promoting or consum- active listening, the mining sector functions
ing a book such as Soderstrom’s – Creating differently.
& Optimising Strategic Asset Value – which “These skill sets are less important in
addresses 10 roadblocks every senior ex- industries such as mining where a much
ecutive must overcome to realise the full greater emphasis is placed on technical
value of their existing assets. “hard” skills,” Soderstrom says on page 54.
Early in the book, Soderstrom points out “This means that mining-related indus-
that more than half of all mining projects tries are more prone to organisational dys-
never get built because the owners come functionality than some other industries.
to realise that a return on investment can’t This can lead to a number of difficulties.
be generated. A lack of open and frank communication
And, of the projects that do get built, in- throughout the organisation is at the top of
vestor hurdles aren’t met, meaning that just that list.”
25% of all projects make the cut. Soderstrom said having poor listeners
“Of those, half run over schedule, mean- and negative responders to advice can be
ing that just 12.5% of all projects actually detrimental to project outcomes and while Sten Soderstrom’s Australian
meet investor hurdle returns and get fin- improvements in such areas can go a long mining industry experience
ished on time,” Soderstrom claims on page way to company success, companies also
16. need to be mindful and provide for unfore- spans more than three decades
Investors have long lamented such a seen events. in roles covering operations,
high failure rate in the mining industry and “I deal in my book fairly extensively with project management, design,
despite the availability of expertise in the risk management, both at the corporate construction and development,
fields Soderstrom and others excel in, and project level. Risk management, of while also serving in positions
money continues to be torched in the sec- course, is about identifying external and in- of managing director, chief
tor and there are probably no better recent ternal possible events; how likely they are to executive, general manager,
examples than some of Western Australia’s occur; what the impact of the event would project manager and business
emerging gold producers. be with or without mitigation; and applying manager levels. Soderstrom has
“Some sectors of the industry will keep a probabilistic monetary outcome; assess- worked in companies, including
making the same mistakes over again as ing if existing mitigation measures are suf- Metso Group, Sedgman Worley
long as the market allows them to. Inves- ficient,” Soderstrom said.
tors need to be more discerning. What I am “There is a natural tendency amongst Parsons, United Minerals,
referring to here is mostly the mid-to-low CEOs of developing resource companies Sundance Resources and
cap end of the market and single project to be positive and optimistic about the pro- Sinosteel and has provided
companies,” Soderstrom told Paydirt. jects they are responsible for. This stems strategic advice and reviews of
“Some analysts argue that the hurdle for simply from the fact that they are motivated projects for Monadelphous and
listing on the ASX should be set higher and to provide shareholders and institutional in- Newcrest Mining Ltd
I agree with them. There are of course com- vestors with a ‘positive spin’ where the com-
panies that have and are likely to provide pany is heading.
shareholder returns that are very attractive.” “A mining company [emerging or produc-

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