Mining Project Management Systems: Driving Predictable Project Outcomes

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For decades, persistent failure has marred the delivery of capital investment projects in the resource development sector. Regrettably even though the causes are well known, companies have been slow to respond with effective control strategies. As the scale and complexity of projects has increased so too has the magnitude of shareholder value destruction. It seems that when the biggest projects fail, they fail spectacularly. Performance statistics going back several decades demonstrate that mining projects of all sizes and complexity mostly fail to achieve objectives. For a time, the commodities super cycle, which peaked in 2011, concealed poor capital expenditure discipline. High sales prices cover many sins, but recent price turbulence has exposed companies to a legacy of record impairments and over-priced and under-performing assets unprecedented in the modern era. This has led to a renewed focus on reducing or eliminating capital expenditure. Companies spending on capital developments have an opportunity to apply new levels of discipline to both the allocation and delivery of capital in an environment of stagnating labour costs and increasing competitiveness. Contracting approaches that provide greater opportunities for cost certainty or gross cost reduction are now more readily available as contractors are prepared to accept greater levels of cost and schedule risk to secure work. Mining companies must also improve in-house project management capability, especially in risk management and performance control. Teams of proven performers should be equipped with sound management processes and tools to capture the value of the opportunity at the front-end of the project delivery cycle and maintain that value through to completion. We conclude with an overview of our proprietary capital delivery process and management system to demonstrate a methodology that reduces risks in a project portfolio and greatly increases the likelihood of achieving predictable project outcomes.

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Mining Project Management Systems: Driving Predictable Project Outcomes

  1. 1. Delivering Predictable Project Outcomes Jamie Morien1 1 Lead Project Delivery Consultant, GRS Consultants, E-mail: jamie.morien@grsconsultants.com (Corresponding author); This article draws upon intellectual property and concepts developed by GRS Consultants Principal David Bollands and employees in the creation and marketing of the proprietary GRS Project Management System discussed herein. The author thanks David Bollands, Daniel Cahalarn and David Kast for additional editorial comments and suggestions. _________________________________________________________________________________________ Abstract: For decades, persistent failure has marred the delivery of capital investment projects in the resource development sector. Regrettably even though the causes are well known, companies have been slow to respond with effective control strategies. As the scale and complexity of projects has increased so too has the magnitude of shareholder value destruction. It seems that when the biggest projects fail, they fail spectacularly. Performance statistics going back several decades demonstrate that mining projects of all sizes and complexity mostly fail to achieve objectives. For a time, the commodities super cycle, which peaked in 2011, concealed poor capital expenditure discipline. High sales prices cover many sins, but recent price turbulence has exposed companies to a legacy of record impairments and over-priced and under-performing assets unprecedented in the modern era. This has led to a renewed focus on reducing or eliminating capital expenditure. Companies spending on capital developments have an opportunity to apply new levels of discipline to both the allocation and delivery of capital in an environment of stagnating labour costs and increasing competitiveness. Contracting approaches that provide greater opportunities for cost certainty or gross cost reduction are now more readily available as contractors are prepared to accept greater levels of cost and schedule risk to secure work. Mining companies must also improve in-house project management capability, especially in risk management and performance control. Teams of proven performers should be equipped with sound management processes and tools to capture the value of the opportunity at the front-end of the project delivery cycle and maintain that value through to completion. We conclude with an overview of our proprietary capital delivery process and management system to demonstrate a methodology that reduces risks in a project portfolio and greatly increases the likelihood of achieving predictable project outcomes. Keywords: Predictable project outcomes, mining project management system, project management framework, project failure, project success, risk management, front-end loading, project controls, procedures, processes _________________________________________________________________________________________ 1. Mining Projects are Risky Creation of a mine, process plant and infrastructure (the mining project facilities as shown in Figure 1) is an exceptionally risky business endeavour. The Mining Life Cycle 1 begins with a search for a mineral deposit (exploration), and in the unlikely event of success the deposit is classified into mineral resources and reserves.2 The greatest uncertainty lies in this early phase and problems relating to the resource and reserve estimate is the most likely technical problem to account for failure of mining projects’. 3 Following a successful exploration program, a planning phase and feasibility assessment will ensue, culminating in a Detailed Feasibility Study. The feasibility assessment is phased using a stage-gate process to eliminate and limit expenditure on projects that will fail to achieve the Owner’s goals. Definition of key scope details and the plan and process for project delivery are the greatest determinants of the eventual success of the project. Some 70% of eventual project cost is tied up with the process design locked in at the start of Detailed Feasibility. 4 Specific processes are implemented to reduce uncertainty to a level that matches the Owner’s appetite for risk. Once in execution, the control strategies developed during feasibility allow strategic management of risks that may emerge. Failure to follow a proven, disciplined and rigorous project delivery process greatly increases the possibility of project failure. Figure 1 Representative Mining Project Facilities
  2. 2. 2 2. What is Project Failure? Project failure is not meeting objectives (within specified limits) of the sanctioned business case, typically defined in a feasibility study, with respect to the following criteria: • Failure to meet objectives with respect to Health, Safety, Environment and Community; • Not completed and ramped-up on schedule; • Not delivered within budget; • Does not achieve sustained plant performance; and • Does not deliver the expected business value and return on investment (including such issues as recovered grade and sales revenue). 3. Statistics on Failure Net Present Value (NPV) measured at project completion provides the best composite indicator of performance. Issues beyond the control of the project team such as sales revenue are excluded, whilst cost-schedule trade-offs conducted during the project are included in the calculation. It has been estimated that only about 10 - 20% of all mining projects produce the return on investment and NPV projected in their respective feasibility studies.5 Numerous studies demonstrate that capital costs consistently eclipse budget projections on average by 29% (Table 1)6 , and, over time performance has apparently been getting worse. One assessment of the status of all mining projects publicly reported between October 2010 and March 2011 showed an average overrun of 71%.7 As the size and complexity of projects increases, so increases the quantity and magnitude of risks. Across all industries, around 65% of so-called mega-projects fail.8 Catastrophic failures of mining and metals mega- projects in the last few years include a $10 billion near write-off of a venture to make steel slabs in Brazil9 , a $4 billion write down in Brazil on an iron ore mine,10 and the indefinite suspension of a major gold and silver mine estimated to eventually cost 300% of the originally sanctioned budget.11 Table 1. Mineral development project capital overruns Period Surveyed Authors No. Projects Avg. Over-run 1965 – 1981 Castle12 18 33% < 1980 Merrow13 44 27% < 1996 Bennet14 16 27% 1987 - 1997 Gypton & Ward15 37 31% 1980 - 2002 Gypton16 60 22% 1980 - 2001 Bertisen & Davis17 63 25% 2010 – 2011 Mitchell18 >18 71% Average ~256 29% 4. Attributes of Successful Projects We deem the following to be the key attributes of a successful project management process applied to major mining projects. • A rigorous project management process and management system; • Sound planning and risk management; • Implementation in accordance with the business process and project plan; • Comprehensive scoping and estimating; • Robust instruments of control: contracts; schedules; budgets; • Reliable, timely, informative and accurate control reporting; • Continuous review, revision and improvement; • An ‘ego-free’ environment for harmonious working; and • A ‘no secrets, no surprises’ approach to all activities. Ignoring any of these key attributes will prevent creation of, or contribute to, breakdown of the control environment. Establishment of an effective control environment is one of the most fundamental yet neglected requirements of mining project management. Space does not permit us to provide comprehensive descriptions of each of the above attributes in this article. Here we focus on the first prerequisite for a successful project: the implementation of a rigorous project management process and management system. Of course there are other practices attributed to the achievement of consistent and predictable project outcomes. The National Research Council found 92 such characteristics of successful mega-projects.19 All of these characteristics and the above attributes are embedded into the Principles and Rules that dictate our project management process and system. This ensures successful project management principles are implicit in the very processes applied by the project team in the implementation of the project. 5. Project Management Process The project management process, depicted in figure 2, is a structured framework of activities intended to enable the identification, definition and development of a mine and process plant that meets the cost, time and quality objectives of the enterprise. The project management process begins with the framing of the project opportunity, and finishes with the close-out of the project. A process-based approach ensures objectives, expectations, roles and responsibilities, metrics, key activities, inputs, resources, outputs, deliverables and products are clearly defined for the entire process. It further assures that projects are sufficiently scoped, planned and estimated so that an accurate and functional control baseline can be established and used to control the project. 6. Project Management System The Project Management System (PMS) is a business process solution built around the project management process. It includes all the standards, processes, procedures, guidelines, templates, tools and applications to apply the corporate policy for delivery of capital.
  3. 3. Project (Study) Management Feasibility Studies Project (Study) Initiation Risk Management Scope Definition Cost Estimating JFC Process (Scoping Study) Planning/ Scheduling All studies complete? Scope Verification No Project Management Project Initiation Risk Management Scope Finalisation Cost Estimating Planning/ Scheduling Procurement & Contracts Yes Design (PFS/DFS only) Detailed Design Construction Commiss- ioning Close-out JFC Process (PFS/DFS) Project (Study) Controls JFC Process (Project Execution) Verify Study Documentation Project Controls Risk Management Opportunity Framing Procurement (Major Supplier Enquiries) Figure 2 Project Management Process (Major Projects) 3 7. Scope of the Project Management System The PMS, depicted in figure 3, encompasses the entire project delivery life cycle and is organised around the following groupings: • Capital Projects Policy • PMS Business Process Overview • Principles and Rules; • Opportunity Development; • Program Management; • Project Management; • Project Initiation; • Quality and Risk; • Support Services; • Project Controls; • Engineering; • Procurement; • Contracting; • Construction; • Commissioning; and • Project Closeout. In all, there are more than 250 separate tools integrated in the system. 8. System Architecture Our system architecture utilises a proprietary three-tier hierarchy which places at the highest level a policy document that defines the vision, mission and objectives for each management area. The second tier enshrines the Principles and Rules at the heart of the management system which distil best practice into a succinct handbook for, in this instance, capital projects. Tier 3 system components include all the standards, processes, procedures, guidelines, templates, tools and applications. This three-tier system architecture is replicated across all management areas e.g. Operations Management, Information Technology, Risk and Assurance etc. and is not exclusive to project management. The architecture supports a simple, yet powerful solution to the communication challenge faced by all companies that wish to direct both their employees and service providers in how the company wishes to conduct itself in business. The Principles and Rules for capital projects engender generally accepted best practice and, as such, present nothing onerous to a good contractor. Figure 3 Project Management System in Context of Mine MOS
  4. 4. 4 9. Opportunity Development Before an opportunity becomes a project it must be accepted by the organisation and included in the Capital Plan. Rigorous opportunity development procedures and tools optimise the allocation of capital and ensure the portfolio management process aligns with shareholder expectations. They ensure rigour around: • Capturing, documenting and carrying out preliminary assessments of ideas and opportunities; • Gaining endorsement of the idea for inclusion into a company’s budget and capital plan; and ultimately • Creation of a Justification for Capital (JFC) for approval to advance the opportunity. 10. Feasibility The feasibility management system ensures a uniform approach to the planning and implementation of all types of studies and the production of study deliverables. Strictly following the process ensures that: • Due consideration has been made on whether the project should be investigated further; • All of the alternatives are investigated before a particular direction is taken; • Project viability has been investigated in detail and confirmed prior to carrying out additional design and estimating and committing significant funds; and • Due processes are followed in determining and fine-tuning the project scope, timeframes and cost estimates. The management system includes procedures for conducting studies and economic evaluations of the project. Support tools include checklists that are used to determine whether the level of definition and therefore accuracy has been reached to meet the requirements of the study and capital cost estimate. It also includes a sophisticated economic modelling tool with instructions. Owner standards around feasibility study quality are essential. An Owner must overcome the moral hazard that arises when using a consultant who may later be engaged under an EPC or EPCM contract to deliver the project. 11. Initiation, Setup and Project Management Project management procedures define the roles, responsibilities and processes to be followed in the overall management of projects including: • Establishment of a structure for project governance, capital expenditure approvals and authority levels, delegation and limitation of authority; and • Project organization requirements and appointment of project personnel; Project initiation procedures and templates ensure disciplined set-up of the following: • Roles, responsibilities and accountabilities; • Communication and document distribution matrices and workflows, meeting and reporting processes and matrices, project diary; • Project information management systems; • Establishment of support services (e.g. Human Resources, Information Technology etc.) and other administrative requirements; • Development of the Project Charter, a project briefing mechanism, broadly framing project purpose, scope, timing, quality, cost, and key project personnel, their acceptance of the charter and the Project Manager’s acceptance of responsibility for delivery of the project; • Project categorization and the consolidation of the Project Procedures Manual; • Development of the Project Roadmap, a concise and powerful communication tool setting out the game plan for delivery of the project opportunity; • Development of the Study or Project Execution Plan (PEP); and • Scope definition guidelines and tools for development of the scope of work and scope of services. 12. Document Management Project teams must establish a controlled environment for document management and team collaboration. As the primary decisions-makers it is crucial for the Owner’s team to have unfettered access to all project information. This supports good project governance and reduces uncertainty. Exclusive reliance on the document management systems of the contractor invariably results in information asymmetry and places the Owner in a weak position in the event of a commercial dispute. Procedures and standards dictate the management of documents, including numbering, registration, transmittal, filing, storage and retention. 13. Program Management Program management procedures and tools support a Project Review Process to monitor the status of a project and its performance against the PMS business process, the Principles and Rules and a project’s identified objectives and associated deliverables. Periodic and planned reviews provide ongoing insight into company-wide project performance and business process compliance. The system also defines the requirements and provides templates for enterprise-wide reporting of project performance. 14. Quality and Risk Management Project Risk Management is principally used to determine whether the Project Execution Plan and supporting management plans adequately address the risks associated with project specific activities. The risk management system components include a procedure and support tools for identification and classification of a project’s overall risk profile. The tools include a sophisticated risk register database tool to track mitigation of project risks and the ongoing risk profile of the project. To judge whether risk management practices are effective, objective measures of success are established and both the inherent risk (prior to controls) and the residual risk (subsequent to the application
  5. 5. 5 of controls) are measured on an ongoing basis so that the team can know the control mechanism is working. The project quality process is a fundamental element of the project risk management process. The quality management procedure covers the processes associated with defining the business processes that will govern the conduct of work on the project (preparing a Project Quality Plan), the method of checking compliance with the business process and triggering remedial action if necessary (project quality auditing) and confirming the technical adequacy of the basic parameters, the methodology and the product (project technical reviews). 15. Project Controls Effective decision making relies on accurate and timely project controls information. The project controls system must provide accurate measurement and forecasts of cost, resources, progress and productivity at an appropriate level of detail to deliver the necessary intelligence for decision makers to make project critical decisions in a proactive environment rather than a reactive environment where potential deviations occur. It is essential that the Owner sets minimum requirements for project controls. The management system provides standards, guidelines, procedures and tools to support the following: • Development of the Work Breakdown Structure (WBS) and Code of Accounts; • Cost control procedures including budget management, change control, commitments and payment procedures; • Planning and scheduling standards; • Project progress and performance management • Preparation and review of estimates; • Estimating standards and guidelines; and • Reporting requirements. 16. Engineering Engineering management system tools ensure a uniform and appropriately reviewed design of the project plant and processes to the company’s technical standards. 17. Procurement The procurement procedures, templates and tools ensure a uniform and controlled approach to project procurement activities, including the processes, responsibilities and methods to be followed for the planning, bidding, management, expediting, inspection and receipt of goods for the project. 18. Contracting Contract management procedures and tools support the execution of the contracts function for a project. They apply to the Owner’s team managing an EPCM, EPC or other form of contract and set the standard for contractors executing projects on the Owner’s behalf. The system includes: • Pre-contract tools for development of the contract plan, identification and pre-qualification of potential contractors, quotation and tendering processes, tender receipt and opening through to the tabulation, and equalization of tenders, selection and justification of a tender submission; • All templates and boilerplates for tendering, contracts, administration guides and audit tools required to manage all types of contracts including EPC, EPCM, construction and consultancy agreements; • Contract administration processes encompassing the mobilization of the contractor and ‘kick-off’, the governance processes including issues around insurance, performance guarantees, monitoring and review of the contractor’s performance, establishing contract files and keeping and maintaining proper records, payment processes, claims management and change management. • Contract close-out procedures ensuring all administration is complete, all inspections have been conducted, all matters resolved, all certificates have been issued and all claims and disputes settled. 19. Construction The procedures and tools to support best practice construction management including: • Site establishment, coordination and management of temporary facilities; • Site administration; • Contractor compliance with contract in areas of EH&S, IR and QA/QC Mobilisation/ demobilisation and rehabilitation of site • Conduct of inductions of all site personnel • Inspection of the works • Scheduling and overall sequencing of the works Coordination of interfaces between contracts • Contract administration • Control of Scope of Work • Monitoring of performance and progress • Contractor completion of contract works and demobilisation. • Provision of Field Engineering Services; • Management of site warehouse and ‘free issue’ goods; and • Coordination between construction and commissioning activities. 20. Commissioning and Operational Readiness Ensures commissioning and operational readiness is in line with company operational standards and achievement of sustainable plant operation that meets or exceeds design capacity. System drives the closeout of construction and commissioning execution via the generation of the necessary handover packages, energisation notices and transfer of care custody and control certificates. The system includes an operational readiness-training program and manages all elements of plant commissioning and operation.
  6. 6. 6 21. Project Closeout Ensures accounting, contractual, technical and commercial close-out of projects and provides a platform for learning for future projects. 22. Management System Interface Embedding a management system into an organisation is vital to ensure consistent application and broad acceptance. Once in place a project management system is optimised by successive application and is honed to reflect prevailing company policy. It becomes ‘the way of the company’ and requires only minor customisation for each new project application. Simplifying accessibility to the management system components can be challenging. The system must be easily accessible, searchable and comprehensible. We developed a Graphical User Interface (GUI). The web-enabled GUI (screenshot in figure 4) is an interactive flowsheet of the entire project management process that enables users to step through the process and retrieve information on an as required basis. Selecting a step in the process will retrieve all relevant procedures and tools for rapid deployment. We can offer many different GUI designs to match a company’s branding style and other preferences. 23. Does a Mining Company Really Need a PMS? There are numerous reasons why mining companies do not implement comprehensive end-to-end business solutions that also encompass the project delivery cycle. Project management is primarily deemed a non-core process and is supposedly the sole responsibility of a contractor who designs and constructs the project. This attitude is expressed by the senior executive of a company mentioned earlier who suffered one of the worst project failures. Asserting that future success relies on a more hands-off approach using an EPCM contractor, he stated, ‘we’re a mining company, not a construction company, and we’re going to let the construction companies build these mines for us.’ 20 With respect, we believe this proposition derives from a confusion that abounds in regard to the differences between the EPC and EPCM forms of contract. Many Owners incorrectly assume a level of risk hedging in EPCM contracts that is simply not there.21 An EPCM contract is merely a contract for services and there is no guarantee in regard to price or schedule regardless of how negligent the contractor may have been. Typically the EPCM contractor has limited liability in terms of time, cost and performance of design, manufacture and construction. 22 EPCM contracts are often selected because they provide flexibility for the Owner to fast-track a project and start construction with low levels of scope definition; which implies high cost and schedule risks.23 The Owner must be a very active participant and ‘…drive the project, investing more resources and assuming all risks... the contractor has little incentive to be efficient’. 24 EPCM commercial vehicles offer a range of other management challenges which must be addressed by the Owner. We would encourage all mining companies to consider a range of delivery strategies based on an assessment of project needs in its specific context. Herein lies the risk of continued failure and also the opportunity for success, i.e.: What can be contracted to external service providers, and what needs to be controlled in-house to secure successful project outcomes and deliver capital with confidence in a predictable project outcome? This is fundamentally dependent on assigning work to resources that possess the core competency to complete the tasks assigned. Access to such resources is constrained by location, market and organisational supply. Such constraints can lead to the assignment of works to resources lacking the core competency to perform the work, resulting in suboptimal outcomes. The common misperception that an Owner can effectively contract out cost and schedule risk (to an EPCM) often results in disastrous project delivery outcomes. Risk when realised always returns to the Owner; the risk must be controlled and managed. Selection of a particular contracting strategy, from the mosaic of different options, requires at the very least an Owner’s team that is resourced adequately to manage the risks involved with the particular strategy. The Owner must clearly understand and define the roles, responsibilities, liabilities, and authorities of all the various participants. Procedures in the Owner’s project management system must provide guidance to the Owner’s team in the development of the delivery strategy and management of the contractor specific to the contracting approach. The Project Management System contains all contracting procedures, tendering templates, contract boilerplates, administration guides and audit tools required to manage all types of contracts including EPC, EPCM, construction and consultancy agreements. Without a prescribed minimum standard for project management processes, by what standard can the performance of the project management entity be assessed? EPCM contracts, typically being contracts for services only, are drafted to require the standard of reasonable or best endeavours. During implementation there may be a difference of opinion as to what that standard is. In a worst case scenario how does a court or arbitrator interpret this? Our solution is to append the Principles and Rules document to the primary contract with the EPCM contractor so that expectations are clear and unambiguous and the responsibilities of the contractor are clearly understood from the outset. This aims to enhance and define the behavior desired by the contracting parties. In our experience, neither Owner organisations nor project management service providers have adequately upgraded their project management and control processes or systems to meet the new challenges of mining mega- projects. Most companies with at least one operating mine have documented business processes and procedures to support a range of activities across back office administration. Some have adopted Enterprise Resource Planning (ERP) solutions such as SAP and Oracle to integrate processes across the business into a single software platform. These ERP systems, which typically Figure 4 Graphic User Interface
  7. 7. 7 arose in discrete manufacturing environments, are inadequate for the management of a project. The differences between an operation and a project in terms of engineering management needs, supply chain, contracting methodology, cost management processes, reporting, etc.. make ERP systems simply the wrong tool for a project. We have assisted many clients in configuring their ERP systems with additional technology to support projects but ERP systems alone cannot meet the needs a mining project. 24. Outcomes and Conclusion Project management systems for the mining industry need to encompass the full project delivery cycle from opportunity identification through to project close-out. Development of a robust, rigorous, comprehensive and effective suite of procedures, tools and enabling processes from first principles is a significant undertaking. Investment into ‘first principles’ solution development can cost millions of dollar, tens of thousands of labour hours and should be practically complete prior to the execution phase of a proejct. The value of a project management system is measured in terms of a reduced level of uncertainty and improvements in the efficiency and effectiveness of the management process. A PMS is intended to engender a behavioural change within an organisation whereby: • Project opportunities are identified, evaluated and converted to projects in a uniform manner; • Rigour is applied to project planning and projects are implemented as planned; • Projects are executed in a controlled and predictable manner; • There is emphasis on accountability for performance; • Management attention is focused where it really matters – on control performance – not merely reported project performance; • There are early identification and management of risks that may compromise the project objectives and key result areas; • There exists a framework to manage the Owner’s project team, consultants and EPCM/EPC contractors; • Business objectives are achieved. About the Author Jamie Morien has 14 years of experience and acquired competencies in project delivery roles across some of the world’s largest industrial, minerals processing and infrastructure projects. He has university degrees in Construction Law, Project Management and Construction Management from Australian institutions. As a lead project delivery consultant Jamie has completed assignments with management responsibilities for project disciplines including contracts, procurement, estimating, cost control, planning and scheduling, facilities management, risk management, information management systems and document control. Past assignments include projects in Australia, Canada, Peru, Kazakhstan, Laos, New Caledonia and the Dominican Republic. About GRS Global Resource Solutions (GRS) was established in 1994 to provide Feasibility Study, Project Management and Operations Management expertise to the petroleum, mining and chemical processing industries. Our core skills and resources encompass strategic consulting and include the provision of: • Feasibility study management; • Project management and ‘Turn Key’ delivery; • Project opportunity framing and planning; • Management of capital programs, throughout the project delivery cycle; and • Operations improvement. GRS mission is to select and nurture working relationships that allow us to develop a business environment of excellence, knowledge and trust, with a transparent approach to daily business activities, assisting our clients in the realisation of their objectives. We firmly believe that our collective attitudes and beliefs structure our corporate and individual conduct and achievements. GRS focuses intensively on supporting clients in the development and delivery of their business plans, with a spotlight on the management of business risk and opportunity inherently embedded within the execution plans and daily business activities. Gaining more control over business outcomes, also allows a focus on engaging people in the more rewarding challenge of driving improvement and increasing profitability. With the benefit of increased productivity, predictability and reliability clients are better able to withstand negative market forces and capitalise on periods of high commodity value. Operating as a consistent low-cost producer enhances capability to convert marginal resources or projects into more viable operations and business cases, effectively reducing the risk envelope in growth and operating strategy. GRS has a market presence in Asia, Europe, Africa, Australasia, North America and South America. The GRS Project Management System (PMS) and GRS Operational Management System (OMS) business solutions are packaged and sold, in units and as a complete enterprise- wide solution, to companies around the world such as Newcrest Mining, MMG, Doe Run, Newmont, Iluka Resources and Chevron. These business solutions and their successes represent an investment into first principles solution development over a 12-year period with an investment of some 120,000 man-hours. They are optimised through successive application and honed to reflect today’s prevailing market providing clients access to what we believe is the world’s best management system. Working as a team with our clients’ personnel, we operate under the principle: ‘NO SECRETS, NO SURPRISES, SIMPLY DELIVER’
  8. 8. 8 References 1 Gavin M Mudd, ‘The Sustainability of Mining in Australia: Key Production Trends and Their Environmental Implications for the Future’ (2007) Department of Civil Engineering, Monash University and Mineral Policy Institute, 6. Available online: <http://www.mpi.org.au/attachment/d016df19778a7c563cd1c99afe29 c43a/f2065acefd9648fc79d94181e9032269/1_SustMining Aust aReport Master.pdf> on 13 July 2008. 2 ‘The South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves (The SAMREC Code)’, 2007 Edition, The South African Mineral Resource Committee (SAMREC) Working Group Under the Joint Auspices of the Southern African Institute of Mining and Metallurgy and the Geological Society of South Africa. 3 Shillabeer, J, and Gypton, C, ‘Highlighting Project Risk Following Completion of the Feasibility Study’, in Proceedings Mining Risk Management (2003) 101 109 (The Australasian Institute of Mining and Metallurgy: Melbourne). 4 Nick J Lavingia, ‘Best Practices in Cost Engineering’ (2004) AACE International Transactions 9.03. 5 McMahon, 2007, quoted by Bullock RL, ‘Accuracy of Feasibility Study Evaluations Would Improve Accountability’ Mining Engineering April 2011. 6 Ibid, 3. 7 Ernst & Young, “Effective Capital Project Execution: Mining and Metals”, 2011 8 “Edward Merrow Reveals Why Megaprojects Fail in ‘Project Manager,’” IPA Independent Project Analysis, January 2012, http://ipaglobal.com/News Room/Announcements/Edward Merrow Reveals Why Megaprojects Fail in Pr, accessed on 4 Feb 2014. 9 “Emerge, splurge, purge: Western firms have piled into emerging markets in the past 20 years. Now comes the reckoning” The Economist Mar 8th 2014 http://www.economist.com/news/business/21598642 western firms have piled emerging markets past 20 years now comes 10 Els, F. “Report: Anglo American set for $5bn Minas Rio writedown” 21 Jan 2013, Available Online: http://www.mining.com/report anglo american set for 5bn write off over minas rio 69010/ 11 Lazenby, H. “Barrick Gold suspends Pascua Lama project” Mining Weekly, 31 Oct 2013, Available online: http://www.miningweekly.com/article/barrick gold suspends pascua lama project 2013 10 31 12 G R Castle, 1985, “Feasibility studies and other project estimates, How reliable are they?” February, Proceedings of the Finance for the Minerals Industry, New York 18. 13 Bullock RL, ‘Accuracy of Feasibility Study Evaluations Would Improve Accountability’ Mining Engineering April 2011. 14 Ibid, n.13. 15 C Gypton and D. Ward, 2001, “Feasibility Study Quality, Capital Overruns & Investment Decisions”, Speech to the North West Mining Association, www.miningamerica.org 16 C Gypton, “How have we done? Feasibility study performance since 1980” (2002) January Engineering and Mining Journal, 22. 17 Bertisen, J., and Davis, G. 2007, Bias and error in mine project capital cost estimation. SME Preprint No. 07 082, Littleton, CO: SME. 18 P. Mitchell, 2011, “Achieving major capital project effectiveness and corporate performance” in Effective Capital Project Execution Mining and Metals, Ernst & Young. 19 National Research Council, ‘Characteristics of Successful Megaprojects’ (2000) National Academy of Sciences. 20 J. Sokalsky quoted in Wall Street Journal, [online] < http://blogs.wsj.com/canadarealtime/2012/07/26/wsj canada interview barrick ceo defends record optimistic on gold price/> 21 Philip Loots, Nick Henchie, ‘Worlds Apart: EPC and EPCM Contract Risk Issues and Allocation’, (2007) The International Construction Law Review 253. 22 Doug Jones, ‘Where Are the Standard Forms Going?’ 47 Australian Construction Law Newsletter 15, 21. 23 Christof von Branconi, Chistoph H Loch, ‘Contracting for Major Projects: Eight Business Levers for Top Management’ (2004) International Journal of Project Management 22, 119, 120. 24 Ibid.

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