CIO Profile: African Minerals Paul Harrison mining a new seam of profit

It took Paul Harrison a couple of weeks to respond to our email requesting an interview, but when he did it summed up his working life rather well. “Just back from Sierra Leone,” he wrote, hastily. “Please go ahead and set it up.”

Harrison is the CIO of African Minerals, the largest company by market capitalisation on the London AIM market.

Give it a couple of years, he says, and the group could well be looking down from the lofty heights of the FTSE 100, such is the size of the iron ore deposit the company stumbled across while exploring for diamonds.

The reason Harrison hadn’t responded to our email earlier became clear when we did eventually speak.

He doesn’t always have access to email. Neither does he have access to 3G networks.

He travels to his sites through dense jungle and speaks to his CEO via satellite phone. Life as a mining CIO in western Africa is a world away from western Europe.

“We’ve gone through the exploration phase of identifying the size of the iron-ore body, and are now into construction and operations,” he explains. “We’re finalising the construction of a port to allow vessels to take our product to market.”

Harrison makes regular trips to Sierra Leone, known predominantly for diamond mines and civil war, via a direct BMI flight from Heathrow to Freetown.

It’s a route which has made life marginally easier for him when establishing a brand new IT and telecoms infrastructure in a country which boasts neither.

“Had we had significantly more money to invest, I think we would have used choppers and taken it on almost as a military operation,” he says. “But that was just cost restrictive from a business perspective.”

Harrison’s point about the availability of cash is important. Traditionally, the mining sector looks at technology with suspicion, as a necessary cost, rather than an investment.

With such huge sums of money being spent in other areas (in the case of African Minerals, the port Harrison speaks of is only the first; with a deep-sea port capable of accepting much larger vessels, also planned) it’s perhaps not surprising that CFOs look to save every penny they can.

In the mining industry, Harrison claims, IT budgets often run at a quarter of a percent of revenues, in contrast to an industry such as retail where it can reach as high as 10 per cent.

“We’re not generating revenue, that will begin to happen as the first invoice goes out at the end of November [2011],” he says. “So, yes, there’s a tremendous cost focus.

“We don’t have a blank cheque book and we are accountable to the shareholders and the markets in London who provide the funding we have. So there’s a constant battle for money.

“If you look across the business at where this money is best spent, quite clearly it’s always to get product on ship. So there’s quite some compromises and corners that I’ve had to cut in order to get where we are.”

But in the process of cutting corners, a pragmatic Harrison has also learned a thing or two.

He is a veteran of 39 different SAP deployments throughout his career, but the one he put together for African Minerals was the first in which he’s “broken all the rules”. It has demanded pragmatism and flexibility in order to get the system up and running in time and to budget.

“If I was in a traditional business, I’d say, ‘let’s take this nice and slowly – take a couple of years, do the design and follow proper diligence’,” he says.

“But a lot of that goes out the window. You find that you have to improvise so much, doing things that you know you wouldn’t do in western Europe. Interestingly, here it works.”

As a result of that improvisation and corner cutting, Harrison has got SAP up and running — with, he admits a few of the traditional issues — in under three months.

“It’s been a bit of a learning in that you can do SAP significantly cheaper and quicker if you’re willing to cut a few corners and if everyone knows about what corners are being cut,” he says.

But the deployment of a new SAP system in record time is only one of the challenges that Harrison has had to overcome.

Sierra Leone, situated on the west coast of Africa is bordered by Guinea to the north and northeast, Liberia to the southeast and the Atlantic Ocean on the west and south.

The region has a history of fierce civil war, plus it has a tropical climate ranging from savannah to dense rainforest and it is the latter that Harrison has had to contend with.

By their nature, mines tend to be situated in remote areas, meaning that linking all of the sites has been one of Harrison’s major tasks.

He has been busily deploying microwave and VHF radio networks, as well as substantial volumes of fibre.

“In west Africa, you have no roads and often have to go through dense forests in order to get to where your tower needs to go,” he explains.

“You’ve got to build your own mobile network,” he says. “So what BT and O2 did years ago, we’ve had to do from scratch. Then you have to roll out an intranet, then you have to deploy SAP and then a basic Windows infrastructure. And you do all of this in nine months.”

To add to the challenge, Sierra Leone isn’t exactly a natural breeding ground for qualified Windows engineers, meaning Harrison has had to import most of the people who work on his team, although he does say that he employs as many locals as possible to try and give something back to the economy there.

All of the hard work will be worth it; as soon as the first consignment of iron ore is loaded onto the first ship to dock at African Minerals’ brand new port.

Because then the cheques start rolling in and Harrison can turn his attention to getting a direct return on his substantial IT and telecoms investment.

Having linked previously unreachable regions of Sierra Leone with the latest telecoms and data backbone technology, it’s Harrison’s intention to monetise that network by becoming a wholesale provider of bandwidth, at least in the short term.

In time, he will investigate the potential for divesting the operation either as a joint venture or as a separate business entirely.

“Ultimately, I think we’d probably want to end up being a customer,” he says.

Harrison’s story is by no means unique. The mining and raw materials space, especially at the more exploratory level, is often about flexibility, cost control, imagination and pragmatism.

CIOs working in the sector have neither the luxury of time nor truckloads of cash to get the job done.

Often, they also have to battle against a legacy of technology being treated as a cost to be reduced rather than an investment to be maximised.

Harrison says as much, charging his peers in the industry to align themselves with the business better and speak the language of mining rather than technology; and ultimately, Harrison will run his IT team as a profit centre.

And working in remote and sometimes lawless regions of the world, as many mining companies do, brings its own set of challenges.

As well as a liberal dose of expats and colleagues from past roles, Harrison’s team has a number of ex-military. “The very nature of Sierra Leone attracts that type,” he says.

But it’s an industry that also attracts enterprising and imaginative CIOs who are happy working under conditions that some might find abhorrent.

In return, it’s a world that can provide the type of job satisfaction rarely found in a more white-collared environment.