The realization of new EPC & EPCM construction projects in mining is a complicated process with many complex risks to assess. What does the industry struggle most with? Find out more at: http://bit.ly/1Zu9vGj

1. MAIN RISKS AND ISSUES IN
MINING EPCM PROJECTS
In January 2014, there were 104 projects with an estimated
budget of over $1bn. The stage of the project is unrelated to the
cost and schedule overruns, which plague 69% and 50% of these
projects, respectively.
7 Most Impactful Risks for
Mining Projects (with
Impact Score):
1. Incorrect mineral
resource calculation 7.86
2. Incorrect financial
resource calculation 6.69
3. Owner's financial
difficulties 6.45
4. Diesel shortage in the
country 6.27
5. Price fluctuation of
minerals 6.16
6. Changes in laws and
regulations 6.13
7. Poor management 5.95
7 Most Common Risks to
Affect Mining Projects (with
Probability Score):
1. Incorrect mineral
resource calculation 6.15
2. Changes in laws and
regulations 5.76
3. Price fluctuation of
minerals 5.63
4. Owner's financial
difficulties 5.51
5. Political instability 5.49
6. Technical Problem
(Breakdown) 5.47
7. Insufficient
infrastructure 5.44
Due to the way risk is allocated between the owner and
contractor/supplier, the overall cost of EPC projects tends to be
10-20% higher than EPCM projects.
EPCM Project
management layers:
Owner
EPCM company
Vendors/ Construction
contractors
Potential
Subcontractors
Potential risks of
multiple management
layers:
Extra overhead costs
Relationship
management issues
Inefficient
management teams
Potential conflict of
interests
http://www.ey.com/Publication/vwLUAssets/EY-Business-
risks-facing-mining-and-metals-
2014%E2%80%932015/$FILE/EY-Business-risks-facing-
mining-and-metals-2014%E2%80%932015.pdf
http://five-
global.com/betasitev2/assets/Project%20Management%20Mo
dels%20-%20Five%20Global.pdf
http://www.qualified-audit-partners.be/index.php?
cont=824&lgn=3
http://cdn.intechopen.com/pdfs-wm/19862.pdf