Goldcorp investigates New Zealand Otago Site

Learning Outcome 1

Goldcorp investigates New Zealand Otago Site
Goldcorp are a vertically integrated gold and precious metals organisation based in Russia.  The company takes gold ore from large open cast mines in virtually unpopulated areas of Siberia and produces gold ingots in various product sizes for the wholesale market.  The Wohlwill process is used as the primary gold extraction method.
A recent prospecting of land in the Otago region (just outside Ben Lomond Scenic Reserve, Queenstown) in New Zealand has highlighted an opportunity for a joint partnership with the New Zealand Government.  This is considered an exciting opportunity for Goldcorp as New Zealand is has not used the Wohlwill process and this is seen as a key competitive advantage.
Goldcorp also has a fledging relationship with New Zealand Gold Merchants (NZGM), a wholesaler of gold and precious metal products.  This company has a long standing, well established and respected with the domestic market based on honesty, reliability and responsibility.  Goldcorp intends to use this relationship for wholesale and retail sales both domestically and internationally. 

Learning Outcome 1:
Understand the primary role and functions of operations management within the organizational and external environment.

    39 Marks Total

1.Describe using a diagram the inputs, transformational processes and outputs of gold mining that Goldcorp would use?
6 Marks
2.Define who the internal and external customers are in the process.
3 Marks
3.Describe the core process considerations must Goldcorp take into account?

4 Marks
4.Outline at least two support functions that will have special significance during the establishment of manufacturing in Otago and why?
4 Marks

5.Show in a diagram, in general terms the supply chain for Goldcorp.  Include in your diagram, examples of roles, departments or organisations listed in each part of the supply chain.

7 Marks

In order for the mine to be successful, two key considerations must be taken into account.
A.The mine must be able to extract a minimum of 1-5mg/kg of gold to gold ore and
B.The processing equipment must be able to extract gold at least as fast as at the Siberian site.

After successfully being granted permits for initial exploratory work, Goldcorp recovered 145g of gold from 32 ton of gold ore.  The current recovery rate through chemical extraction at their Siberian mine is 12 kilograms per 24 hour day.  It is projected that the Otago site will take 21 hours to produce the equivalent amount of gold.

6.Apply calculations to determine if the extraction amount make the expedition viable?  Please show your calculations.
3 Marks

7.What is the productivity of the Otago mine compared to the Siberian mine as a percentage?  Which mine is the most productive?
3 Marks

Goldcorp Corporate Strategy
Goldcorp has decided to commence due diligence process in setting up operations in New Zealand.  Goldcorp business development team have determined via environmental scanning that this country has a very stable economic and political climate which makes investment in the long term attractive.
Goldcorp’s domestic wholesaler NZGM has agreed in principle to initial orders of 5 ton of gold products per annum provided Goldcorp’s operations meet local and its company’s principles and values.  Goldcorp wishes to retain high standards of competitive capabilities.

8.Outline three challenges do you foresee Goldcorp will face setting up in New Zealand?
3 Marks

9.Outline which of competitive capabilities is Goldcorp focusing on the most?

2 Marks

10.Outline the core competencies which Goldcorp will find challenging?