Integration Practices
Mark Davis – General Manager Operational Excellence
November 2015
Practical lessons from recent asset
integrations
Integration activity at MMG
2
Las Bambas
Project
2014
Anvil Mining
(Kinsevere)
2012
MMG
Group Office
• Open pit copper mine
• Design 450+ktpa
concentrate
• Ownership 62.5%
• Open pit copper mine
• Design 60ktpa
cathode
1. Understand and establish ownership of the asset
2. Transfer control from current owner and position as the operator of the asset
3. Maintain/improve safety performance and operational (cost and schedule) KPIs
4. Retain and engage critical capabilities and people
5. Deliver comprehensive Beyond Integration Plans to the new Management Team
6. Position asset to deliver on M&A valuation case
Integration Objectives
3
Integration Key Principles
•
Focus on key areas and close out outstanding due
diligence items that could have a material impact on the
value of acquisition
•
Adopt a “light touch” approach and only integrate what
is mandatory, not discretionary, to support the delivery of
the project on time and on budget while providing
management control
•
Respect and collaboratively work alongside existing
operations and project personnel. The role of the
integration team is not to “take over” the project
•
Develop a strong understanding of the asset, the
Key Phases
•Internal/External communication – minimise
uncertainty and manage political/social sensitivities
Phase 2:
Integration Readiness
(8 Weeks)
Phase 1:
Pre-Assessment,
Planning & Mobilization
(12 Weeks ++)
Phase 3:
Integration Execution
(60 Days)
• Work streams and steering
committee
• Timetable, outcomes, boundaries
• Integration model, processes and
protocols & rules of engagement
• Mobilise Integration team leaders
• Arrange support and infrastructure
• WAIT FOR DEAL TO BE DONE…..
• Build knowledge (doc review, briefings,
one on ones)
• Identify and prioritise activities
• Operational goals and Integration KPIs
• Detailed Execution Plans:
•Transfer of Management Control
•Transfer of Project Management Control
•Stakeholder Assessment & Comms Plan
•Common system/process rollout
• Develop Day 1 Plan
• Develop 60 Day Plan
• Identify Management Team for Day 1
• Announce new organisational
structure
• Deploy new systems and processes
• Execute integration plans (Day 1
and Day 60)
• Monitor compliance with integration
milestones & targets
• Handover on-going beyond
integration work stream activities to
new asset Management Team
(Business as Usual)
•Engage Integration Steering Committee
•Appoint Integration GM and PMO
•Integration Steering
Committee to review and
ratify implementation
plans
•EXCO takes over from ISC
and integration responsibility
moves from the Integration
General Manager to the asset
General Manager
•Identify key integration stakeholders
•Develop and launch communication plan
Governance
5
Plan on a Page – Overall Integration
Definitive cost & schedule to complete estimate Project control gaps closed
Rem committee Approval of Rem Structure #2 Stakeholder Comms plan approved Week 1 Comms delivered
Pre-Assessments Complete & Final Integration plans developed
Change of Ownership Readiness Meeting Phase II Readiness Review • Draft Integration Plan complete
• Mobilization plan complete • Integration Budget approved • Delegation of Authority
Day 1 Comms pack delivered
Comms Plan complete Rebranding plan complete Plans complete with owner identified for trailing actions Handover to Country Manager
Pre-Assessment
Key Integration Events
Integration Execution
Project Delivery /
Ops Readiness
Stakeholder / SHEC
31 Jul
BAU
People / Culture
Change of
Ownership
16 June
Integration Readiness
Deal Capture
SPA
13 Apr
ExCo Review
SBS / Finance / Commercial
Supply / IT / Legal
30 Sep
April
May
June
July
August
September
October
= on track = area of concern
Fatal Risk Gap Analysis complete, with Action Plan
Week 2 Comms delivered Aviation Management Plan Crisis Management & Emergency process endorsed
MMG Endorsed Community Management Plan Community positioning paper
approved by Exco #1
Project health check complete Ops readiness assessment completed
Concentrate Logistics assessed, road transport plan affirmed
Funds for project completion approved
Ops reporting in place for safety , volume & cost Preliminary estimate of cost &
schedule to complete
Delegation of authority in place
Fund for project completion (2014) approved
Key personnel retention strategy
finalised Individual retention plans for key people developed SPA Governance Monitoring & Compliance in place
IT separation commenced
IT separation completed (continues into 2015) Leadership Team in place & key resource gap addressed
All employees have clarity on role and remuneration
TSA services separated BaU Planning Systems in place Financial reporting process in
place
Required insurances retained & gaps addressed Day 1 org structure approved by ExCo
TSA governance, monitoring & compliance in place
Day 1 IT & Shared Services in place Completion accounts prepared
Key contracts novated & transferred = complete = Overdue # change log CoC Stakeholder /Branding /Comms Plan Approved
Change Management Plan delivered BaU work plans completed
Close out Report & KPI results
Advisory board appointed #3
Org structure changes implemented
Planning cycle aligned with corporate planning
