Engineering & Mining Journal

JAN 2013

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MINE DESIGN ants Accenture published a report titled Achieving superior delivery of capital projects, which makes alarming reading if for no other reason that it highlights the scale of the overrun problem. The survey that provided the foundation for the report sought the views of 31 senior industry respondents with responsibility for capital projects around the world. Of these, 22 respondents were involved with mining projects, and the other nine with metals. According to Accenture, "less than a third (30%) of the respondents reported staying within 25% of approved budgets for all projects, and less than a fifth (17%) said they completed all projects within a 10% budget range." Put in financial terms, the implications—as well as the sums involved— are huge. Accenture estimates that capex for metals and mining projects will have been more than $140 billion last year, with the prospect of $1 trillion to $1.5 trillion being spent between 2011 and 2025. "With $100–$200 billion in annual spend, the impact of project delivery overruns on individual companies and the industry as a whole is enormous," the company commented. "When asked what typically causes delays in project schedules, survey respondents cited the availability of talent (57%), new or unconsidered regulatory requirements (45%) and insufficient detail during the planning stage (42%)," Accenture added, while pointing out that mining projects are often more complex than metals projects, so are more likely to experience longer delays and higher cost overruns. In some ways, though, that seems counter-intuitive since smelter and metallurgy projects in general can be highly complex and, in consequence, risk budgets being broken. The high capex requirements for today's nickel-laterite treatment plants is a case in point, relying as they do on autoclaves and sophisticated hydrometallurgy. Leading Attributes and Recommendations However, that is by far from being the whole picture, since a host of other factors can come into play. Looking purely at the key reasons for cost overruns, and setting aside the question of whether or not a company can attract competent staff and contractors (which www.e-mj.com is an issue in its own right), it is difficult to understand how projects can fall foul of factors as obvious as 'unconsidered regulatory requirements' and 'insufficient detail during the planning stage.' Those, frankly, are fundamentals that any company considering a major investment should be capable of addressing, and it begs questions that shareholders should be posing if they feel that their interests (and investments) are not be husbanded properly. Still, there are some companies that can and do deliver projects on schedule and budget, even faced with the pressures of skilled-labor shortages and rising equipment costs. According to Accenture, a number of common attributes identify them: • They make fewer revisions to the approved schedule; • They make significantly fewer changes during construction; and • They have greater confidence in their own culture in delivering projects. In addition, these companies make wider use of analytics, including key performance indicators, and have better access to performance data across multiple dimensions, such as timeliness, accuracy, range and source. In its report, Accenture defined five key recommendations for effective project delivery: • Establish strong project governance and risk-management tools; • Proactively manage external stakeholders' increasing expectations for sustainability; • Optimize scarce talent through portfolio management, organizational flexibility and training; • Integrate information systems among capital project players; and • Accelerate operational readiness. "Addressing cost and time objectives of capital projects is a prime opportunity to achieve competitive advantage," Accenture concluded. "Ideally, capital projects should be run as high-stakes businesses with targeted objectives, clear delivery strategies and careful monitoring to track progress toward high performance." And this, of course, is where good design has a major part to play. Sector Movements Among consolidations that have recently taken place within the mine-design software companies, the current wave of acquisitions seems to have started in April 2010 when CAE bought out The Datamine Group. It followed this in January 2011 by adding Century Systems Technologies to its portfolio, thereby boosting its capabilities in geological data-management and governance systems. Shortly afterward, Switzerlandbased ABB acquired the Australian mining-software developer, Mincom, bundling it into its existing software systems unit as Ventyx. During 2012, meanwhile, the major change came with the French 3-D specialist, Dassault Systèmes', $360-million purchase of Vancouver-based Gemcom, now part of Dassault's Geovia brand. At the time, its CEO Rick Moignard explained the potential benefits of the move: "Advanced technologies in 3-D modelling and simulation will not only enable engineers and geologists to model and visualize resources but also improve sustainable mine productivity," he said. Orebody modelling led the way in bringing computerization into mine design. Today's mine engineers have a plethora of competing products to assist them in interpreting geological data and optimizing resource extraction. Some software focuses specifically on geological resource data; other packages address surface-mine layouts; yet more take specific mining methods such as block caving, providing the design department with the tools to model the resource and apply 'what-if' tests to determine the effects of production schedule changes or commodity-price movements on the operation's viability and resource utilization. In the remainder of this article, E&MJ; looks at some of the mine-design software packages that are currently available. There are, of course, many other providers; the common thread here is that each of the suppliers mentioned was among those that exhibited at last year's MINExpo. RungePincockMinarco In 2005, the Australian software developer, Runge, took the unexpected step of buying out U.S.-based mining consultants, Pincock, Allen & Holt, with the subsequent addition of MinarcoMineConsult boosting its consultancy arm. In December, the company, which JANUARY 2013 • E&MJ; 35

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