The typical capital project life cycle
The capital project life cycle consists of the following stages, and a technology plan should cover each one:
- Conceptualization: In this first stage, an organization defines the framework and mission of the capital project, ensuring they align with the corporate vision and strategy in terms of tonnage, grade, and the organization’s business growth.
- Project identification: The resource model created during the earlier phase is updated, and a mining preliminary production plan is prepared. A financial model is developed, explaining the outcomes of the business case, including net present value (NPV), internal rate of return (IRR), and capital and operating costs.
- Pre-feasibility study: This study is done based on the minimum indicated resources and some of the measured resources. This stage focuses on producing a preliminary project execution plan, a health and safety analysis, an environmental impact assessment, and a design philosophy. A minimum proven reserve has to be available to move through this stage.
- Feasibility study: Here an organization completes the basic design engineering tasks for the mining facilities; finalizes the project execution plan, value engineering plan, and project specifications; and prepares the implementation plan for the next stage.
- Engineering, procurement, and construction (EPC) and mine development: Teams prepare all project-related items, such as project control procedures, quality assurance procedures, design reviews, the complete material and spare part specifications, construction plans, safety procedures, and operating manuals to progress to mine development.
- Operate mine and stabilization phase: In this stage, all the operations related to the hand-over take place and operations execution commences.
The challenges of mining capital projects
During the various stages of a capital project, a mining company will face a number of challenges, as described below. Having a clear understanding of these issues will help create a comprehensive tech planning strategy:
- Transparency issues: These challenges emerge when transitioning from the exploration phase (run by a different group typically) to the project phase, where results such as solid modelling, bore-hole data, cross-sections, topographic surveys, and metallurgical test work need to be handed over seamlessly from one team to another.
- Absent workflow controls: For the various stage gate requirements, organizations often have a lack of workflow controls to determine the progress of the projects, as well as the review and signoffs of each project artefact.
- Environmental assessments: An environmental baseline assessment must be conducted before an impact assessment and artefacts need to be approved and tracked.
- Cybersecurity: Storing data on operating costs, capital costs, and financial models in shared drives in an ad hoc manner increases cybersecurity risks without adequate document controls.
- Redundant efforts: Operational readiness teams that usually ensure a project’s IT requirements can be met often start developing the technology plan very late and may reinvent the wheel.
- Alignment with partners: Considerations should be made for contractors or external consultants who contribute to infrastructure development and other on- or offsite operations. Their role in future operations will impact technology choices for mining production systems as well as ongoing data exchanges and validations.
All the above impact capital project delivery, as well as the future state of mining operations and the ability to meet growth targets. Preparation for each of these challenges will help avoid making tech investments that don’t cater to the complexity of business requirements or that don’t facilitate decision making and collaboration.
An effective approach to tech planning
Since mining companies develop multiple capital projects at the same time, creating a comprehensive tech-planning strategy that covers all of them would be an effective means of ensuring capital projects deliver successful results. The suggested approach is to create a tech-planning playbook built on hybrid information (general and site-specific elements), so that it can be reused for other capital projects with modifications to any site-specific elements (such as business and IT systems).
The site-specific elements, for example, should address requirements needed at the site, such as borehole data management software during project initiation or the need for lab information management system (LIMS) software to process ore samples during, say, the pre-feasibility study. The general elements would include tools such as contractor management and procurement-capable software used during the EPC and mine development stage.
Such a playbook should contain information on standardized applications and systems and the infrastructure needed. This information would be based on a maturity assessment, gap analysis, cost-benefit analysis, and scoring criteria (alignment with business, finance, technology, and support needs). This will help an organization select the best-fit solution from the market as per business requirements. The playbook should also identify the available systems that can be leveraged and provide a roadmap for implementing future solutions. The roadmap would need to include a comprehensive tech-commercial plan with work programs such as Corporate Services, Mining Technical Systems, Site Infrastructure and Security, Environmental and Safety, and Data-Driven Operations. With the appropriate stage gates, the results would be a smooth implementation of new technologies to streamline mining operations.
The benefits of early technology planning
Technology planning for an upcoming capital project provides an opportunity to achieve benefits that improve productivity, safety, and cost by making mining operations more efficient. By conducting this planning early in the process, enterprises can utilize data generated by analyzing areas such as fleet and dispatch management, short interval control, value drivers, and performance management. The typical benefits are a reduced maintenance spend of 10 to 15%, reduced logistics costs of 10 to 20%, and productivity improvements of 10 to 20% with a positive impact on revenue and costs. The generated data can also provide a foundation for the further implementation of data-driven-platforms equipped with the latest emerging technologies, such as real-time monitoring, artificial intelligence, and machine learning.
Based on Wipro’s mining experience, the development of a capital project playbook helps avoid surprises during the operational readiness phases, and by the time the mining operations stage commences, the technologies will start providing a strong return on-investment (ROI) early in the life of the mine.