OK Tedi Mining signs on COSOL for $17 million for asset management tech

Asset management software and services company COSOL (ASX: COS) has been selected to deliver Asset Management Services to OK Tedi Mining, the owner of one of the world’s largest copper and gold mines located in Papua New Guinea.

Valued at $17 million, this three-year contract further solidifies the longstanding relationship between COSOL and OK Tedi Mining. Over the course of nearly two decades, their collaboration has consistently yielded operational efficiencies and cost savings, highlighting COSOL’s trusted position with the mining company.

CEO, Scott McGowan, said, “COSOL is delighted to solidify the long-term relationship and it is pleasing that we have again been entrusted by a leading asset intensive business to continue providing crucial asset management software and services to a global scale mining operation.”

As part of the contract, COSOL will deliver comprehensive end-to-end Asset Management Services, leveraging its proprietary software and services. Essentially, COSOL will use its software and services—including IBM Maximo, Ellipse, SAP and such—to handle OK Tedi’s assets from the start to finish. The Company’s expertise is expected to drive operational efficiencies, cost savings, and support OK Tedi Mining’s goal of achieving zero waste in its operations and supply chains.

OK Tedi Mining has been working on its mandated environmental aims. The Company has an environmental monitoring program governed by the OK Tedi Agreement and complying with the OK Tedi Environmental Management Act (OTEMA) 102 licence conditions. Notably, it has already invested PGK 226 million ($96 million) in environmental mitigation programs, including measures to reduce sedimentation in the upper Fly River through dredging and implementing environmental safeguards at the mine and processing plant.

Considering OK Tedi Mining’s financial performance, the decision to adopt advanced asset management technology becomes strategic. In CY22, the company generated approximately $1.5 million in revenue, while its total operating costs exceeded $1.2 million. With cash reserves dwindling to approximately $45,000, implementing robust asset management solutions is necessary to get it on track, which is where COSOL’s asset management tech comes in.

COSOL, on the other hand, has had a good year thus far, thanks to new and renewed contracts. In the first half of FY23, the Company achieved a remarkable 54% increase in revenue, amounting to $34.7 million. Despite one-time investments in transformation and integration costs for core operating capability, COSOL’s earnings before interest and tax (EBIT) rose by 40% compared to the previous corresponding period, reaching $4.8 million. Additionally, net profit after tax grew by 22% to $3.2 million, and basic earnings per share increased by 11% to 2.15 cents, even after accounting for the transition to a higher tax rate of 30% and successful integration of WMS.

COSOL’s recent contract with OK Tedi Mining adds to its roster of wins in the asset management industry and makes a case for organisations’ renewed interest in being more sustainable. As the partnership progresses over the next three years, COSOL is poised to play a pivotal role in helping OK Tedi Mining achieve improved efficiencies and cost savings in the global mining landscape.