Goldcorp Inc. is one of the world’s fastest-growing, lowest-cost senior precious metal producers, with mines located across the Americas, from Canada to Mexico to Argentina. It can be difficult to coordinate the work at such far-flung sites, but Luis Canepari, vice president of IT, is using leading-edge technology to help the Vancouver-based company operate better from remote locations and deliver cohesively on its strategy. Below, he explains how Goldcorp’s general business model works, how it differs from that of the competition, and how his IT initiatives are contributing to the cause.
Advantage: Talk about what’s going on with gold prices.
Luis Canepari: If you asked 10 different analysts, you’d probably get 10 different answers on the gold price right now. From my perspective, we’ve seen a lot of volatility through 2013, making it difficult to forecast the shorter-term price fluctuations. However, I do believe the market will pick up again in the longer term.
What has that meant for Goldcorp?
In general, we are a highly liquid company. We have been able to manage the changing gold price without straying too far from our strategy. We do, however, strive to operate cash-positive and to be disciplined in the way we spend our money. For IT, this means spending our capital wisely on projects that will directly support the strategy and benefit our people and our shareholders.
How do you do that?
In times of a changing market, making wise investment decisions can be tough, particularly in the gold market, where gold price is outside of our control. We have to know what variables are within our control and be very good at managing them. The amounts of gold we produce and the efficiency [with] which we extract it are two fundamental elements within our control. This makes our strategy pretty simple: we need to invest in good assets and mine them in the most cost-effective manner. For IT, to support our sites, this means providing them with technology that enables work to be done safer, faster, and cheaper.
How do you find the right properties?
Many of our peers have invested in less profitable projects, assuming higher gold prices. We’ve taken a different approach. In my opinion, we look at the available mining assets thoroughly and are more conservative in our decisions, only investing in assets with the right returns and an acceptable level of risk. Currently, our operating assets include five mines in Canada and the United States, three mines in Mexico, and three mines in Central and South America. We also have a solid pipeline of [new] projects, including the Cerro Negro project in Argentina, the Éléonore gold project in Québec, the Cochenour project in Ontario, and the El Morro project in Chile. Through being careful with our investments, our portfolio is strong, with solid reserves and a sound pipeline for growth.
Earns a BS in systems engineering from the Universidad
Metropolitana, in Venezuela
Earns an MBA from Georgetown University
Joins Goldcorp after leaving his role as director of engineering and construction at AES Corporation; prior to AES, he held an IT leadership position at Exxon Mobil Corporation
How do you help ensure that you remain a low-cost producer?
In IT, my aim is to make our department more strategic. Step number one to achieving this is to become a cost optimizer for the business. Our company has grown very fast, largely through acquisitions, and the speed at which we have grown hasn’t enabled us to fully merge each site into our existing operating model. As a result, we have a number of different sites with different systems and processes.
By consolidating systems such as our SAP ERP landscape, we have been able to optimize costs for our sites and optimize the IT support these mines receive. At the end of the day, we want to give tools and technologies to mines so they can extract gold more efficiently, in a cost-effective manner, while maintaining their individual accountability and empowering the mine management team to make better decisions.
Another area where we are optimizing costs is our infrastructure landscape. By consolidating data centres, investing in cloud technology—helping us be more mobile and agile—and approaching contracts with business partners as one company rather than [as] a group of independent sites, we are able to deliver superior IT support at a low cost. We’re far from completing this effort, but we are a determined team.
How are your changes improving things for Goldcorp’s personnel?
Our mines are in remote locations, and getting people to leave their families behind and spend time in the middle of, say, Patagonia, is hard. So, the more efficient and mobile we can make our people, the better. Simple technology solutions such as video conferencing will help us reduce travel time and costs while keeping us connected. Being more strategic in the location of some of our consolidated IT services, such as our new help desk, located in Mexico, will help keep our costs lower while taking advantage of time zones.
How else are you remaining competitive from an IT perspective?
Mining is an ancient industry, but the way we do it today is far more efficient, and technology has played a lead role in this. As an example, automated or remote-controlled machinery can mine where it’s unsafe for workers. The safety [and] equipment inspections carried out by our supervisors can now be conducted on a tablet rather than [by] using a clipboard. Maintenance costs can be improved by using technology to do predictive maintenance. Helping our miners reduce the amount of paperwork and idle time will reduce the amount of machinery downtime, increasing productivity and ultimately our company’s profitability.