This post covers MND-related thoughts that were triggered when this morning I read about the $40m solar-electricity project that Sandfire commissioned in 2016. I have probably posted most of the thoughts below in this MND subforum before, so expect nothing novel.
MND follows a two-pronged approach to expand business, and de-risk its historical focus on the WA-based mining sector – namely, it:
leverages its capabilities by peripherally steps within its established customer base; and
selectively takes packages of capability into new market spaces.
The steps are effected via a mixture of in-house initiatives, bolt-on acquisitions, and JVs.
Via the Zenviron JV, renewable energy was recently added to MND's long-established electrical-services offering. Zenviron's first project happened to be for a non-mining client in the ACT, an example of expanding into a new market space, but I suspect projects for mining companies will follow. To get an idea of Sandfire's recent $40m mining-related solar-energy project, see http://www.juwi.com.au/company/refe...l//largest-off-grid-solar-project-complete-2/
MND's water management services to the mining sector has already spread to irrigation and water management projects for non-mining clients (e.g., urban sewerage management) . If MND's funding of AnaeCo's technology leads to a breakthrough in solid waste management, that may allow MND to offer “biomass” to complement both MND's current water and waste management services, and the renewable-electricity-related services. By “biomass” I mean, using organic matter to fuel electricity generation.
There can be a loop-back in this 2-pronged expansion process. For instance, mine-site work that led to water management projects that led to acquiring water-piping and reticulation capabilities that led to irrigation projects may allow MND to take its irrigation capabilities to below-water-table mining situations that include irrigation projects. RIO's Hamersley Agricultural Project, which produces hay for cattle, is an example of a miner getting into irrigation, and I expect more such projects as the above-water-table deposits are exhausted. Growing hay using below-water-table discharge is something to which Andrew Forrest and Gina Reinhart may be be attracted. Both have Pilbara mining interests, and both are scions of North-West stock-farming families, and both have acquired stock farms recently.
MND Price at posting:
$12.39 Sentiment: Hold Disclosure: Held
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