In a commoditized space such as iron ore mining, miners can’t control prices.

Controlling costs in such a scenario could be a key differentiator between companies and could lead to a stock price performance divergence.

 

Nonetheless, following a mine operations cost reduction drive, due to the lack of control systems, software platforms and expertise, may not imply that optimised mine operating costs can be sustained, unless a proper mining project control system is applied.

 

Experience gained over 21 years of operations improvement assignments, in which we assisted more than 50 owner teams with the optimisation and controlling of mining costs, has highlighted the lack of mine operating cost control systems and the challenges associated with the effective management of sustainable mining costs.

 

Having gained experience as project manager and director during my employment with both infrastructure and open-pit mining construction companies, has disciplined me to apply project controls with the aid of project life-cycle modeling, and when I established Tacmin Madini in 1996, it was clear that we would never execute a mining assignment unless it was with the aid of proper project controls.

 

A proper cost control system that can be applied any time to any mining operation would be the key to sustainable optimised mining costs.

 

The challenge of developing a platform or process that can effectively control the variety of complex processes that is associated with the compilation and execution of mine production schedules and budget cost conformance can in most instances be surpassed when;

 

The process is common to standard project controls as successfully applied to capital & infrastructure projects.

 

This on its own will imply that mining personnel should become more familiar with industry standard project controls as applied to other industries, and project managers should become familiar with the complex processes associated with all aspects of mining.

 

A mining case or project should be identified and the decision analysis process integrated into the overall project management.

 

Attributed to decades of experience gained by our multi-disciplinary expertise in all aspects of open-pit mining, with the aid of project management software our expertise has proofed that a well-established decision analysis process integrated into the overall project management process, vital for improving project performance, can be developed. The aforesaid process has assisted numerous mining executives and boards from junior and major listed mining companies to take an informed decision for their open-pit mines across Africa.

 

The selected project case should present continuity between estimating & post-tender commercial control.

 

More often than not, financial modelling during a process of decision-making presents no continuity for post-tender commercial control. Cost estimation executed with project management software forms the foundation during a process of business analysis and financial modelling, and once the mining project case was selected, it is crucial that continuity exists. During mining project execution it is imperative that project life-cycle models compiled during decision-making process form the basis for project controls.

 

Ongoing benchmarking during project execution should form an integral part of mining project controls.

 

The main objective of project controls is to achieve on-time and on-budget completion. Bench-marking against other mining operations of similar nature, may not constitute a true benchmark, and it is imperative that production performance is measured against capable mining equipment performance in accordance with the mine design criteria taking cognizance of the mine site conditions. Likewise, if the cost components that makeup unit costs or total mining costs are not benchmarked against the estimated cost of the same equipment as employed, will not constitute a true benchmark.

 

Application at various project phases and management levels.

 

Bench-marking and project implementation needs buy-in at various levels of an organization in order to be successful. Most often, benchmarking is driven from the top. Senior management commitment is critical if resources are to be made available for the process. While benchmarking may succeed with senior management support alone, it is far more likely to succeed if it has the support of middle management and the project team. Furthermore, the project team is far more likely to support the benchmarking initiative if it is understood that the goal is system improvement and not an individual or team performance appraisal. The project team should be confident that data submitted for benchmarking will not be used for performance appraisals if accurate data are to be obtained. 

 

Tacmin Madini is a mining project management consultancy that offers unmatched expertise and resources in delivering mining project services across Africa and Australia. We provide extensive experience in project and construction management from initial conception through final close-out of projects, and beyond.

 

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