ENTREPRENEURIAL UPSTART; BLM’s Risto Laamanen

The mine engineering consulting Tand contracting establishment Tin Canada was built around the strong entrepreneurial, pioneering spirit of several mining men. That spirit was characterized by a willingness to take inordinately high risks to satisfy industry needs. But to bring a young company into such an entrenched community, seems the epitomy of business folly. That’s what makes the story of Risto Laamanen so interesting. He may very well be one of a new breed of model entrepreneurs based in Canada’s mid-north.

When he’s out of the office, Laamanen, 41, hangs a sign on his door. It reads: Gone Flying. Laamanen, who is the financial linchpin behind an upstart company called Bharti-Laamanen Mining (blm), comes by his entrepreneurial risk-taking honestly. At two, his father brought him to Canada from Finland, following in the footsteps of his independent-minded grandfather who preceded his father to Canada to become a trapper and prospector. Today, Laamanen is a fervent bush pilot, having acquired his flying licence in 1975, and owns a second float plane. Every year he flies from Ramsey Lake in Sudbury to Hudson Bay to hunt and fish as his grandfather, Eino Laamanen, did during the 1920s and ’30s in Timmins. Flying is characteristic of Laamanen’s distinctly northern entrepreneurial spirit. Just getting a licence is a risky, time-consuming challenge. It takes a sizable financial commitment and adrenaline supply.

Laamanen’s latest entrepreneurial venture, blm, though, is not one in which he is heavily involved. For expertise, he has relied on the mining smarts of Stan Bharti, another Canadian immigrant and long-time Sudburian. They incorporated blm in 1988 as a holding company for four other companies, all of them serving distinct needs in mining: blm Mines holds mineral exploration claims, Bharti Engineering Associates (bea) does mine engineering consulting work, blm Mincon markets a wide range of ground control instrumentation and other mining products and blm Mining Services is a mine development contractor. The two chose this particular corporate structure so they could serve a number of niches but without the disadvantages of being a big, impersonal conglomerate. The only disadvantage, so far, is that the people running each company see each other only about once a month.

“The idea of meshing all these elements together under one umbrella was Stan’s brainchild,” Laamanen told The Northern Miner Magazine in an interview at his Fielding Road office. What Laamanen brought to the table was his financial stability, something he had established through his first entrepreneurial venture, Laamanen Construction. Shortly after he graduated from Cambrian College in the school’s first technology class in 1970, Laamanen incorporated that company, which his father had started privately. Today Laamanen Construction is one of the major contractors at work on Inco’s $500-million, 4-year project to rationalize milling and to construct flash furnaces.

But Laamanen still has a dream. Perhaps some of his grandfather’s prospecting blood is in him, or he simply wants to raise the stakes in his business investments, because, as he says, “my family (three teen-aged daughters and a son) is still young, but they’re going to rob me blind when they go to college.” Whatever the reason, Laamanen will get involved through blm Mines in the risky mineral exploration business. “Exploration really gets my adrenaline going,” he says.

His interest in exploration goes back to a story his grandfather told him. The elder Laamanen, who died in 1971, held one of the largest traplines in Timmins. To his French-Canadian barber at the Empire Hotel in downtown Timmins, the late Eino Laamanen is best known as the guy who narrowly missed out on the Kidd Creek discovery. Every time he went for a haircut, Eino would tell his barber about the claims he had staked north of town. For many years, the young Finnish trapper brought back gold-bearing samples he had collected while tending his trap line and kept insisting he should do something about them. When the trapper and part-time prospector finally dropped the claims, the barber quietly picked them up . . . then (according to local Timmins newspaper stories at the time) made a million or so in 1963 by selling them to Texasgulf, the discoverer of the huge Kidd Creek orebody.

“Construction is very risky, but mineral exploration is one step up the risk ladder,” Laamanen says.

Bharti, known throughout the industry for his work with Falconbridge as a mining and rock mechanics engineer, married a Finn named Hannele Lavikainen while working for Outokumpu shortly after graduating from the Royal School of Mines in 1976. One summer, while visiting Canada, his wife’s mother came across the Laamanens in the phonebook. Bharti’s wife, it turned out, is Risto Laamanen’s distant cousin on his father’s side of the family.

Laamanen remembers the day he met Bharti and his wife. “Here was a guy born in India, educated in Moscow and England, carrying on a conversation in Finnish with my father, and doing a better job at it than me, and I was born in Finland,” Laamanen recalls. “I was impressed.” Over the years through family ties, Laamanen had heard positive things about the young mine and rock mechanics engineer. Most of the people he spoke to who knew Bharti were impressed with his mining knowledge. “I don’t know if what he said was all b**l s**t, but it was very impressive,” Laamanen jokes. “But don’t print that.”

Together they decided to set up their own mining company. Bharti knew the industry and Laamanen knew the business side and provided the financial backing. As a corporate achiever at Falconbridge, Bharti kept his plan simmering for several years as he took on more responsibility, becoming superintendent of mines technical services.

Like most entrepreneurs, Bharti eventually began to crave independence. The turning point came in 1988. Bharti had just finished a study on the feasibility of mining the Fraser Depth orebody and was ready for another challenge.

“Stan came to me and said,`Risto, I’m 36 now and if we don’t do it now we’ll never do it,”‘ Laamanen says. So the two took the plunge, incorporating BLM.

There should be a rule in any entrepreneur’s “How-to” book that says: The bigger the idea, the more people you need to pull it off. Well, there was no doubt that blm was an ambitious idea. Leaving a cozy, well-paying job with a large, established mining company was difficult not only for Bharti. Now, he had to put his reputation on the line, draw quality people from established companies, and build a company that does what other companies are already doing but not as one corporate entity. Bharti was in charge of recruitment for each of the three subsidiary companies. His drawing card? A stake in the companies.

All three of the profesionals who eventually agreed to go with Bharti and Laamanen say the decision to leave snug positions was not easy. The three — Dale Churcher, Stephen McMurray and Roy Slack — welcomed the chance to tackle the next personal challenge in their profession that Bharti promised, something their employers at the time could not offer. Laamanen’s financial stability in construction reduced the risk.

“I’m amazed at how quickly it came together,” says Churcher, manager of engineering for bea and one of the first to make the switch from big established company to small upstart. Churcher, 40, had 10 years of experience as project engineer at Placer Dome’s Dome mine in Timmins, before joining blm in January, 1989. He knew Bharti for many years but procrastinated for several months before deciding to take him up on his offer. “There comes a time in your career,” he says, “when you opt for challenges.

“Today there is less technical expertise on a given mining property,” he explains. “Mines are much leaner now. So they are constantly looking elsewhere for expertise.” His new company, which draws heavily on older, experienced mining people in the Sudbury camp, deals with mine feasibility studies, rock mechanics, backfill projects and project management
for mines.

“We like to be seen as a hands-on group,” Churcher says. “The expertise on which we draw is difficult to get anywhere else in the world.” Bea’s niche market is rock mechanics and high-density backfill applications.

McMurray, general manager of Mincon, comes from a diverse background in the marketing of a wide range of mining products. Raised in Sudbury, he worked for Ground Control Sudbury for eight years as general manager but decided to leave that company in November, 1987, to help the Australian firm Rock Engineering set up shop in Canada. He met Bharti between Christmas and New Years that year and heard of his plans to set up a mining products company. Becoming perturbed with the slow pace of decision-making by Rock Engineering, McMurray agreed to work as manager for another company, called Nordal. What he didn’t know was that Bharti was negotiating with Rock Engineering to acquire McMurray as part of a deal. Finding this out, McMurray left Nordal in November, 1988 to head up Mincon. That company set up shop in Walden after purchasing a cablebolt manufacturing plant from Nelson Manufacturing in Sudbury.

“We’ve identified a number of products (a shotcrete pump, for example) that have not been properly introduced to the mining market, which we intend to introduce shortly,” McMurray says. “There are lots of companies that are just distributors of mining equipment, but our emphasis is to have 50% direct control in the manufacturing of the products.”

The most recent member of the blm is Slack, a 31-year-old mine engineer and 8-year veteran of J.S. Redpath of North Bay, Ont. (part of the mine contracting establishment). Having worked as site engineer, project engineer, senior project engineer and project manager for Redpath, Slack had seen, in his words, “most of what you can see in mine contracting.” He worked on such high-profile projects as the Dome No. 8 shaft and the Williams mine in Hemlo. He met Bharti three years ago and has worked for people at Falconbridge who worked with Bharti on the Craig shaft and the Thayer Lindsley shaft, for example.

“Things were going well at Redpath, but I wanted to do other things, things that take a long time to develop when you work for a big company. I wanted to work more with computers, get into more loss control applications and become more involved in the business side,” Slack says. “Stan just happened to contact me at the right time.” As general manager of blm Mining Services, Slack is now bidding on contract jobs both in Canada and abroad.

Recruiting a team was one thing, but making it mesh was another. For this, the entrepreneurs had to land some prestigious contracts. “Getting established in the industry will require a track record,” Slack says. “All our people have a proven record, but the company hasn’t yet.”

Sometimes an upstart needs a break. And a 2-hole raisebore contract for Inco’s South mine was a bit of a coup for blm. “Inco believed in us,” Laamanen says, “and they gave us an opportunity.” Blm Mining Services, together with Frontier Kemper Constructors of Indiana, completed the two 340-metre-deep holes (three and 3.6 metres in diameter) several months ahead of schedule.

“I have made a commitment to everyone that we will never become a big company,” Laamanen says. “If we can’t keep it small with close links with clients, it’s not worth doing, in my opinion. We have to be good at what we do and make money at it.”

For now, the four subsidiary companies are in separate locations in Sudbury, but plans are afoot to relocate all but Mincon under one roof, likely in a new building next to Laamenen’s office on Fielding Road.

“It will take us two to three years to get it running the way we want it, but in two short years the company has performed well beyond our projections,” Laamanen says. “We’re looking forward to an interesting future.” So is the mining establishment.