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Local spirit helps secure win

DONEGAL Resources directors Leigh and Ian Junk have played a significant role in breathing new life into the once boom town of Kambalda.

The historic mining town faced uncertain times three years ago when WMC Resources began withdrawing from the district.

However, after the brothers formed a joint venture with a mining contractor and an exploration company, they made a successful bid to buy WMC’s Miitel nickel mine and implemented a community-focused approach to mining.

The brothers first became aware of the potential of the Miitel nickel sulphide mine when they worked as engineers for WMC.

In 2000, the Miitel mine was put up for auction – WMC’s first and largest nickel asset to go under the hammer.

The brothers formed Donegal Resources to raise the finance to buy the mine and, after unsuccessfully approaching “pretty much everyone”, formed a joint venture with Clough Engineering and then mining junior Mincor Resources.

The Miitel Joint Venture then secured the required capital of $38 million to purchase the mine.

Under the joint venture, Mincor owns 76 per cent of the joint venture as the major equity provider and Donegal and Clough both hold 12 per cent.

At the Miitel mine, the Junk brothers instituted innovative mining methods to mine higher-grade ore, reducing waste dilution and achieving a mining grade of 4.5 per cent – a 1.5 per cent improvement on historical rates.

The process used at Mittel, in addition to the positive sentiment in the resources industry and the current nickel boom, has resulted in a profitable mine that has allowed the company to expand to other sites.

The joint venture was successful in a bid for the Wannaway underground mine, another of WMC’s nickel assets.

Production at Wannaway began in 2001 and with a focus on improving ore grade the joint venture improved nickel grades from 2.3 per cent to 3.5 per cent.

Donegal is now looking at other projects.

“At the time we didn’t know of the impending nickel boom,” Ian Junk said.

“We didn’t perceive that growth would be this good.

“We’ve had a hard couple of years and there has been a bit of luck involved but we feel we’ve done well,” he said.

However, along with the entrepreneurial spirit, it is also the brothers’ community focus that won them their latest accolade – they are this year’s winners of the Ernst and Young, Young Entrepreneur of the Year award.

Ian Junk said that the brothers’ aim was to establish a mine similar to those operating when he first moved to Kambalda 10 years ago.

He said, a significant cultural factor was the introduction of eight-hour shifts, he said.

Ian Junk said while 12 hour shifts were suited to fly-in fly-out workers, those with families needed to be accommodated in a residential environment that allowed for travelling time and time spent with partners and children.

The brothers have emphasised a community focus including sponsorship of local clubs and organisations coupled with a personal involvement in them.

They have also made a commitment to employing local people and using local suppliers.

“Kambalda has a population of 5,000 people and it is important to have community support,” Ian Junk said. “We love living here. We think it is a great lifestyle.”

The Entrepreneur of the Year awards are judged on entrepreneurial spirit, innovation, financial performance, strategic direction, personal integretity/influence and national/global impact.

The Junk brothers are now in the running for the national entrepreneur awards.

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