Mining with a conscience

IN many respects, Atlas Iron chief executive David Flanagan represents the new generation of mining entrepreneur.

While the 2009 40under40 First Amongst Equals winner says his business is as simple as "grabbing a shovel, digging a hole and setting yourself free", Mr Flanagan's deeds indicate a much broader appreciation of his social responsibilities.

Speaking candidly at WA Business News Success and Leadership breakfast last week, Mr Flanagan acknowledged he is concerned about his legacy and how his company can contribute positively to the wider community.

"I think that mining companies can go out and create wealth, jobs, options, help, and life satisfaction for people that wouldn't otherwise be there," Mr Flanagan says.

"We're actually building a lot of projects and we'll be in a very steep growth profile over the next four years, but we don't actually think so much about what's right for today.

"It's about what's right for the long term, and what's right for the long term is actually not leaving any chinks in the reputational armour."

The laid-back Mr Flanagan has come a long way in a short time.

After spending his youth in Bunbury, Mr Flanagan enrolled at the Western Australian School of Mines (WASM) in Kalgoorlie to study geology, graduating in 1993.

The years spent in Kalgoorlie provided a great influence on the course of his life, and later, the direction in which he would lead Atlas.

Mr Flanagan says he was appalled to witness homeless Aboriginals living in old workings on the outskirts of Kalgoorlie.

"It actually shocked me that there could be people who are living in worse than third-world standards within 500 metres of gold mines in a city that was just going gangbusters," he says.

"It was bizarre. I carried that with me."

The first major mining contract awarded by Atlas Iron at its Pilbara-based Pardoo project went to CDE Capital, an Aboriginal-owned business with a 50 per cent indigenous workforce.

Mr Flanagan also reached an epiphany while walking back to Kalgoorlie after rolling his vehicle 45 kilometres outside of the mining town.

Facing possible death without water, he began to contemplate his life.

"I started to think about what's important," he told the breakfast gathering.

"I'd always had subtle thoughts in my mind like 'what is life, what would be a good life? What do you want to do'?

"Along the walk I sort of thought that maybe life was about just doing something with it."

After university Mr Flanagan worked as a geologist in the northern Goldfields, and later in various open pit and underground roles in Indonesia, Ghana, Burkina Faso and Guinea, before joining Gindalbie Metals in 1999.

Mr Flanagan's former mentor and former Gindalbie chief executive David McSweeney recommended Paolo Coelho's The Alchemist, a novel that follows the story of Santiago, a boy who has a dream and the courage to follow it.

"Working with David was pretty formative, he used to give me a lot of books to read," Mr Flanagan says.

"I read The Alchemist and gave Dave my notice, and it wasn't because I was sick of reading his books."

It was 2004, and Mr Flanagan left his job at Gindalbie strike it out on his own with Atlas.

"We were called Atlas Gold and we had a whole bunch of prospects, nickel, gold, copper; we had some iron ore and were actually mining a tenement that we had during the float that we considered prospective for iron ore; we had uranium, we had construction stone," he says.

"We basically decided that we would go out and give it a red hot go and drill everything that we could and take it from there.

"Sometimes the perceived risk of going out and having a go is actually worse than the actual worst case."

Mr Flanagan took Atlas Iron from emerging explorer to fully-fledged iron ore producer in just four years.

Atlas now exports 1 million tonnes of iron annually from its Pardoo mine, and continues to grow under Mr Flanagan's leadership, announcing three new off-take agreements with Chinese steel mills in March, accounting for 50 per cent of production at Pardoo until 2012.

The company is also actively seeking partners for its $3 billion Ridley magnetite iron ore project in the Pilbara, an operation which could produce 15mt of ore concentrate a year over a 30-year mine life.

In The Alchemist, Coelho writes: "When we strive to become better than we are, everything around us becomes better too," a philosophy Mr Flanagan has applied to Atlas' operations.

"The team all know what our objectives are ... but we've also got values which describe how we're going to execute those projects," Mr Flanagan says.

"The number one value that a company has is to do the right thing. And the right thing is that thing that you know your family will be absolutely proud of.

"We agree that's the best measure, we want to be good at what we do, we want to support and engage our employees and this is win-win, and that's no bullshit.

"That's actually really win-win. People know that we're good for business, we're not going to rip anyone off, and we want them to feel like they've done the right thing."

Any plans for a break from work in the near future?

"I do try to set an example within Atlas of spending time with the family. The weekend is family time, but I don't know if it will actually ever stop, that level of intensity. I don't know, maybe I'll find something different to do, but that's a long way off."

How do you think the Pilbara will benefit from the Royalties for Regions scheme?

There's a lot of money made there by the majors and massive royalties paid, and a massive amount of tax paid federally. But despite all of that, the Paraburdoo swimming pool went for two summers with no water because there was a crack and the local government, the state government and the mining company couldn't agree who was going to pay for it.

What do you think of the long-term outlook for iron ore?

I think that the businesses [in China] are healthier than what is perceived in the press. At the moment, Atlas and everyone else in the Pilbara and every other first and second world producer will do ok.