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By Donald A. Ranta

Every mineral project or mine is based on a geologic entity-an ore (mineral) deposit. A well-defined mineral deposit and its associated geologic characteristics are the only aspects of a project that cannot be altered. Mine plans can be modified to exploit the deposit using alternative approaches and yielding similar results. A variety of processing methods also are often available producing generally comparable results. Major modifications can be made to other aspects of the project without substantially changing project economics. However, all engineering and metallurgical aspects of a mine must be accommodated to the spe¬cific location and geologic characteristics of the deposit. Geologic data and interpretations form the foundation for both mine evaluation and mine production by providing esti¬mates of reserves and essential information for mine planning and process design or control. Proper geologic work requires a keen awareness of and an ability to anticipate the technical requirements of geotechnical engineers, hydrologists, mining engineers, metallurgists, and other specialists. Geologists are inte-

Jan 1, 2008

At present, discounted cash flow analysis is generally accepted as the preferred method of valuation of mine projects in surface coal mining. One of the major reasons for that is its ability to take into account the time effect of money over the life-of-mine. As a looking-forward method, it requires forecasts be made with regard to economic, technological, technical, geological, and environmental conditions that will prevail in the future. All forecasts are inherently uncertain as they are a function of the uncertainty of all variables of the discounted cash flows analysis. This indicates that the only alternative for modeling the uncertainty in the project evaluation is the development of adequate risk models to serve the decision-making process. The paper offers a model of project cash flows at risk in strip coal mining, which is an integrated corporate risk management solution. The model is based on a stochastic approach that provides the answer to the question about how large is the deviation between stochastic cash flows and the planned value (or that used in the budget) at each time step of the discounted cash flows analysis, that is due to the uncertainty in the model variables. A solution is worked out for the allowable range of the stochastic cash flows variation that determines the probability of achieving the planned value of a mine project. The Monte Carlo simulation technique is used to model the stochastic behavior of the project variables. A case study of an opencast coal mine project is provided to illustrate the applicability of the risk model. The results obtained provide a new understanding of the mine project risk as a component of the project discount rate.

Jan 1, 2006

By Erica McGlynn, Brian Negrea, Lance Jackson

There was no need for the people of Cleveland to ask “Where does the raw sewage go? We want to know!” because it was clear. The raw sewage was being discharged into Lake Erie during heavy rainfall events due to the outdated design of the combined sewer system. In efforts to resolve this ongoing issue for the City of Cleveland, the Northeast Ohio Regional Sewer District developed Project Clean Lake in collaboration with the US EPA. Project Clean Lake is a 25-year, $3 billion program consisting of seven large-diameter CSO storage tunnels to be constructed beneath the city’s existing infrastructure. The first four tunnels have been completed using traditional hard rock TBM excavation methods. The fifth tunnel, the Shoreline Storage Tunnel Project, presents unique challenges and complexities as it will be the first large-diameter EPB TBM to dig under the City of Cleveland. The project itself consists of one tunnel drive 14,100' (2.7 miles) in length, two pipe jacking tunnels, three large slurry wall shafts, two diversion structures, and three regulator reconstructions. Upon completion of the project, 12 permitted CSO locations along Lake Erie will be taken offline, reducing overflow volumes by approximately 350 million gallons per year. This paper will discuss the current status of construction and the chosen means and methods, including the myriad of nuanced differences between hard rock and EPB TBM tunneling methods. Particular attention will be given to the site preparation, setup, and organization; TBM assembly; and TBM launching practices.

Jun 13, 2023

By E. R. Davis, R. J. Knott

The paper discusses some of the tools of management in the field of project control, especially in engineering. Project control includes planning and cost engineering, and involves various phases: the conceptual Design and Planning Phase, the Definitive Design and Capital Budgeting Phase, and the Implementation Phase. Each of these phases is discussed in in, together with the use that can be made of data banks, progress reports, and computer systems.

Jan 1, 1982

Control of construction projects is the responsibility of the Project Leaders who have the authority to make decisions. Project Controls cost and scheduling systems provide the Leaders with timely information on which to base their decisions.The Client (Owner) will invest up to three per cent of the project cost on Project Controls. To ensure that this investment is effective, the Owner or Manager must have a clear understanding of the information required from the Project controls systems. If appointing a single Managing Contractor, the Owner or Manager must stipulate what is and what is not required from the Project Controls Systems. There are numerous computer programs available for scheduling and cost control and it is important to select systems which best serve the Owner's needs.

Jan 1, 1993

By E Skinner, G Lane

Project delivery strategies are determined by project context, business case requirements, scale of project, market conditions, ownerÆs capability and preference, contractorÆs experience, resource and skill availability, project location and type of project or facility.Successful project management requires the setting of coherent, effective and realistic business objectives and success criteria. The management team needs to lead, prioritise, resource, align, plan, track and communicate the processes that enable the realisation of these business objectives and success criteria.For any given project there is a unique balance between selection of a simple project delivery strategy that minimises interfaces and a complex strategy that necessarily engages the use of expertise and experience from numerous parties. The right balance for a project between these "book-end cases" is a function of how the project owner or managing contractor defines its objectives and chooses to manage risk, cost, schedule and project quality, in the context of the conditions affecting the project.Selection of an effective project delivery strategy requires a detailed appreciation of the range of external and internal environmental / shaping factors which influence the project. These factors include the project constraints imposed by the business, market or operational environments and the selection of an effective mix of primary (head contract), secondary (mix of vertical and horizontal packages) and tertiary (type of individual contract) strategies. The selection of the primary, secondary and tertiary strategies also shapes the project, the size and responsibilities of the ownerÆs team and the framework for delivery of outcomes.How does an owner or prime contractor decide? What is the optimum for a given project? Those with operations management backgrounds will have different views to those with project and construction management backgrounds.Is the simplest practical approach the best approach? Each and every interface needs to be managed.The owner will want a very experienced team that is engaged directly with the owner. The team will have a track record of successfully performing projects using contractors skilled in their respective disciplines and selected using competitive tendering on brilliantly designed scopes of work and good contract terms, with a fully defined project scope and appropriate schedule, for which all significant risks have been addressed and no scope changes are outstanding. Budget and schedule will be expected to have been developed with a full understanding of the scope, situation, risk management requirements etc.The problem is that these conditions rarely exist. The challenge in selection of a project delivery strategy is to resolve how best to address the inadequacies between the ideal case and the present reality. The mechanism for addressing the inadequacies defines the likely outcome of the project.CITATION:Lane, G and Skinner, E, 2013. Project delivery, in Proceedings MetPlant 2013 , pp 50-65 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Jul 15, 2013

By B. McCosker

The choice of the appropriate delivery process for a project is often not adequately thought about. The industry needs to be prepared to break its preconceived mind-sets on delivery procedures. Industry should also be prepared, on a project by project basis, to commit to a critical review as to how the assessment and then selection of the best procurement method can best optimize the project outcome for both client and contractor. Conventional standards and biased reliances and experienced based preferences should be challenged. To achieve this requires a paradigm shift in attitude to both the process of tendering and the evaluation of tenders. Tender and contracting practices are dynamic and have moved away from solely cost based assessments. Tendering contracts arise imposing changed duties upon owners. Traditional contract delivery models have shifted, reflected in part by the trend towards relationship contracting. The categories of contract options are not closed. Many are but hybrids of other time-tested models. This paper considers options available for any brownfield or greenfield project. The principles outlined are translatable to supply, upgrade, operation and maintenance arrangements.

Jan 1, 2002

By D. Caiden, C. S. Covil, P. J. Chamley

The paper describes the background to alternative delivery models, drawing on international experience, and introduces Project Alliancing/Contract Partnering, common risks and risk sharing on tunnel projects. A plea for early contractor involvement in design is made before describing some whole life design implications for tunnels. The paper concludes with four short case studies; Channel Tunnel Rail Link in the UK, Hull Waste Water Tunnel in the UK; Island West Sewage Transfer Station in Hong Kong, and the New Southern Railway in Australia.

Jan 1, 2005

By Michael Feroz

Severe drought in the Colorado River Basin over the past 10 years has caused water levels to drop in Lake Mead by more than 113 feet. The current lake level is at elevation 1,112 feet mean sea level (msl). Lake Mead is the primary source of water supply for greater Las Vegas. Water for Las Vegas from Lake Mead is accessed through two existing submerged intake shaft and tunnel systems. If the water levels continue to drop in the lake, the Intake No. 1 will become inoperable below water level elevation of 1,050 feet msl. To sustain the current levels of water delivery to all member agen-cies in the southern Nevada region, the Southern Nevada Water Authority (SNWA) has decided to construct a third intake at a deeper depth in the lake to ensure better quality water and enhanced reliability.

"Chairman: Professor J. C. Griffiths Rapporteur: Mr J. P. G. PRETORIUSPapers:Mine-mill production scheduling by dynamic programming by R. J. Roman Optimization of a large mining venture by J. C. Paynter, B. K. Loveday and C. G. Robinson Economic surface mining of multiple seams by T. V. Falkie and W. E. PorterIn introducing his paper, Mr Roman said that whereas in manufacturing plants the yearly production levels were usually chosen to produce the largest annual cash flow, in a mining operation, the raw materials (ore) were exhaustible so that the production had to be scheduled to maximize the total net present worth of the operation. This optimum production schedule could be determined by using dynamic programming. The required information was readily available to management at most mines. The 'possible operating range' of production rates lay between the rate with the highest profit per ton. and that with the highest profit per year. The optimum production rate started typically at the top of this range and decreased slowly as the deposit was depleted.Dynamic programming was used to determine several production schedules for a hypothetical mine-mill complex. The effects of changes in the ore grade estimates, size of deposit and acceptable rate of interest on the production schedule were taken into account. Apart from the fact that the net present worth of the overall profits was larger than that obtained by conventional methods, it appeared from the cases studied that the amount of metal recovered was also greater.Dr it P. King commented that this was a very interesting application of dynamic programming. He pointed out, however, that the market price of the metal was likely to vary significantly and randomly during the life of the mine, and he suggested that the problem should, therefore, be reformulated as a stochastic dynamic programming problem.If the price of the metal rose to abnormally high levels, a much higher than normal production rate could be expected. The results of analyses given in Table 5 showed that the production rate was a function of market price. In his view the stochastic problem could be solved just as easily as the deterministic problem.In reply to a question by Dr King as to whether the function relating recovery to production rate (Table I) was based on real data, the author replied that it was based on the results of an analysis conducted at the Union Carbide Corporation's Pine Creek tungsten mine in California.Dr D. M. Hawkins stated that costs were incurred when the production rate was altered, for example, in appointing or laying off staff, and that in practice it may be necessary to take these costs into account in finding the optimum production rate. Mr Roman replied that, while normal administrative costs were accounted for, the additional costs incurred in appointing and laying off staff were not taken into account."

Jan 1, 2014

"Chairman: Mr. K. F. LaneRapporteur: Mr C. T. ShawPapers:Design of crushing plant flow sheets by simulation by T. GurunThe impact of transportation networks upon the potential supply of base and precious metals from Sonora, Mexico by P. de V. Harris and D. E. EurestyProfitability sensitivity analysis of a mining venture by C. A. Beasley and E. P. PfleiderTechnological innovation and its potential effect on the opening of new gold mines in South Africa by N. C. JoughinMr Turgay Gurun, in presenting his paper, indicated that this simulator was no purely theoretical exercise, but that the model had been used in the design of crushing plants of capacities ranging from 3 000 tons per day to 66 000 tons per day, and that recently the design of a plant of capacity of 99 000 tons per day had been studied.The crushing plant simulator was an independent portion of a much more comprehensive simulator for the design of a. complete recovery plant. It would be possible to use each section of this simulator on its own, and simulators would be designed to cover flotation concentrates, cash flow analyses of the entire project, and so on.Each simulator would be backed by a comprehensive data bank. For example, the crushing plant simulator was backed by such a data bank which included the performance and cost data from five manufacturers for an average of 30 items of process and materials handling equipment each. This meant that data preparation involved generally less work than would be required for a manual calculation. On average, data preparation for one run took 30 minutes and three minutes of computer time on an IBM 360/40 completed the run. The model could be valuable as a design tool in that it allowed the designers an opportunity to make a thorough examination of many alternative designs. It was also of value to plant operators as it could be used to predict the consequences of operating decisions.This paper generated much interest and there were numerous questions and contributions, so many, in fact, that the discussion had to be cut short.It was pointed out by Mr K. F. Lane that crushing plants represented a very large capital investment. A plant designed for 40 000 tons per day at 98 per cent efficiency might well in practice be run at 50 000 tons per day at, say, 83 per cent efficiency. He asked how, therefore, their design could be investigated without building economic criteria into the model? The author conceded that this was a tender point. He would have liked to have given facilities for more variability of the metallurgical information. He pointed out, however, that while there was no overdesign for conservatism built into his system, some overdesign was inevitable as the performance characteristics given by the manufacturers were generally conservative. Also, in his system, if lower recovery was allowed for, the system would nut through more tonnage."

Jan 1, 2014

By Randy McMeekin, Chris Twigge-Molecey, J. Peter Blake

The business objectives of a metallurgical project determine targets and constraints, such as the range of products, production capacities, in-service dates, and capital and operating cost parameters. Permitting is usually left to the project team, as are decisions regarding site location, technology, and construction approach. Success requires an orderly methodology, represented in this book by front end loading (FEL) phases: FEL1 examines several alternative approaches; FEL2 ranks and eliminates less economically or technically attractive options; and FEL3 develops the preferred option to the point of major permit completion, with defined scope, schedule, and cost to submit for approval to proceed with implementation in FEL4. Working through FEL1, FEL2, and FEL3, the project definition improves, estimates become more accurate, and project risks are reduced. The project design basis at the end of FEL3 is the control document for project implementation in FEL4.

Jan 1, 2015

Successfully managing project development and construction has often been a challenge in the mining industry. This is reflected in the number of projects that have taken longer to build, exceeded their budgets and then struggled to achieve the performance targets so confidently predicted beforehand. This paper outlines the fundamental elements of project management necessary to deliver mining projects on time and on budget, and performing as originally intended. It looks at areas such as the study process, project planning, team selection and structure, project controls, types of contracts used and approaches to contract management.

Jan 1, 2006

By C Pope, M Tannock

Mining exploration and development projects in Australia are being negatively affected by the highly complex regulatory and bureaucratic processes at all levels of government. These processes affect mining companies operating in Australia by impacting on timelines and the cost of developing a mining project. It is not uncommon for the granting of project approvals to take in excess of five years, meaning that mining companies struggle with productivity, efficiency, time frame and cost issues in respect to their projects in Australia. As the mining boom in Australia is moving from the investment to the production phase, it is now more important than ever to maintain a regulatory landscape that facilitates rather than discourages new investment.While one of our key arguments is that there is too much burdensome regulation and red tape in Australia, we are also strongly believe that regulatory intervention is necessary to ensure that appropriate checks and balances are in place to serve the public interest and manage environmental, health and safety, social and other development-related impacts that may arise from a mining project. However, the regulatory intervention in Australia has come to a point where it is excessive and starting to discourage valuable investment in mining projects for nominal return to the public. Excessive regulation or ‘red tape’ impedes productivity and competitiveness, deters investment and innovation and costs jobs, all of which ultimately impact on the growth of Australia and the standard of living of all Australians.This paper aims to examine and compare the federal, state and local regulations that govern mining projects in Australia. It will highlight how these regulations are unnecessarily complex, lengthy and duplicated and how they can be streamlined to reduce red tape. In doing so, the paper will evaluate the recommendations proposed by the Productivity Commission Report on Major Project Assessments released in 2013, which include the recommendation to move to a ‘one project, one assessment, one decision’ regulatory model.CITATION:Pope, C and Tannock, M, 2015. Project development and regulation red tape – a comparative analysis: does it need to be so complex?, in Proceedings Iron Ore 2015, pp 621–630 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Jul 13, 2015

By David A. Milligan, William Cobb

2.1 INTRODUCTION This chapter provides the reader with a sense of how a heap leach project may make an orderly, and hopefully non-traumatic, transition from discovery or acquisition to project construction. In making this transition a project can pass through several project development phases (i.e. ore definition and delineation, conceptual engineering, detailed engineering, and ultimately on to project construction and operation). "Go" or "no go" decisions may occur at any point in each of these phases. The transition from ore definition to detailed engineering should be accomplished via a well thought out program of interdisciplinary studies and an integrated, interdisciplinary project team. This chapter also describes, in general terms, a "roadmap" approach to the project evaluation process that must occur as project planning and development progress. It is the experience of the authors, as well as a myriad of companies who have been through the heap leach project development process, that a systematic approach will save many headaches, and many dollars. In fact, it is safe to say that a project with no formalized system of "objectives setting" and "milestone charting" may well flounder along the way, even if an economic ore body exists. Many papers and technical articles have been written about various aspects of mineral resource appraisal, economic evaluation, and mine development. Most of these invoke the same general philosophy of a systematic approach to project evaluation and development, although methods cited for attaining goals are quite variable. This is undoubtedly appropriate, given the fact that there is great variation in approach to project development (e.g., climatic considerations, ore body size and physical ore characteristics, permitting constraints, etc.). For the purposes of this chapter, two primary sources of information have been used to highlight the "road map" approach previously alluded to. These sources are cited throughout the text as Mackenzie (1980) and Snow and Michel s (1986). A brief summary of each of these sources is provided below: Brian GJ. Mackenzie of Queens University (Mackenzie, 1980) has developed a wealth of information concerning project development topics. Much of this information is synthesized in his notes for a short course entitled : "Mineral Exploration Planning and Economic

Jan 1, 1988

With the recent collapse in commodity prices the size and number of resources project has diminished markedly in recent years. Coupled with the disappearance of the "open cheque book approach", this has led to a revival of the lump sum or turn key project. The key features of this mode of development are compared with the "owner managed" and "reimbursable cost plus fee" alternatives - with respect to schedule, cost and quality control. Key facts for the successful implem- entation of this mode of development are identified. However, the approach is not advocated for all projects and the potential shortfalls are also identified.

Jan 1, 1986

By B. R. Boardman

Project Environmental Approval is a multi-faceted issue. From a mining perspective, it is a costly item because of avoidable time delay. The government perspective is that the approvals are a necessary part of meeting departmental requirements to ensure that the wellbeing of other uses of the environment is maintained. This paper outlines some of the problems inherent in the environmental approvals process and makes recommendations to both the proponent and government about improving the efficiency of the process.

Jan 1, 1978

By D. F. Sinclair

It is often said in business that if you don't have a customer you don't have a business. The same rule applies to project evaluation; if you don't have customers you really don't have a viable project. It is therefore essential that in the early stages of project evaluation the following fundamental questions are addressed: ? What products will this project produce? ? Who are the potential customers? ? What are the customers' requirements with respect to grade and impurities? ? Do they have adequate capacity to take the production from the proposed project? ? Will the products introduce adverse effects in the customer's process circuits? ? Will additional waste streams requiring disposal be produced? In the past the attitude has been along the lines of the customer will take whatever we produce at the mine site. Times have now changed with customers now operating under much tighter environmental regulation with waste disposal becoming increasingly difficult. It would therefore be prudent that the principles of product stewardship be used as a tool in project evaluation. This paper will provide a general discussion on customer requirements and provide detail on case studies of the impact of mine products on smelter process circuits. It will provide examples where there were synergies between the mine product and the smelter circuit and where the mine product had adverse impacts on smelter performance.

Jan 1, 2007

It is often said in business that if you donÆt have a customer you donÆt have a business. The same rule applies to project evaluation; if you donÆt have customers you really donÆt have a viable project. It is therefore essential that in the early stages of project evaluation the following fundamental questions are addressed: What products will this project produce? Who are the potential customers? What are the customersÆ requirements with respect to grade and impurities? Do they have adequate capacity to take the production from the proposed project? Will the products introduce adverse effects in the customerÆs process circuits? Will additional waste streams requiring disposal be produced? In the past the attitude has been along the lines of the customer will take whatever we produce at the mine site. Times have now changed with customers now operating under much tighter environmental regulation with waste disposal becoming increasingly difficult. It would therefore be prudent that the principles of product stewardship be used as a tool in project evaluation. This paper will provide a general discussion on customer requirements and provide detail on case studies of the impact of mine products on smelter process circuits. It will provide examples where there were synergies between the mine product and the smelter circuit and where the mine product had adverse impacts on smelter performance.

Jan 1, 2007

By L I. Rozman

"There have always been development projects that fall short of expectations. In the last decade, we have seen more than the usual number of mining and oil/gas development projects taking significantly longer to develop and costing materially more than expected. The recent resource-equity market slump proves that investors are now far more cautious about investing new capital in the mineral and petroleum resources sector.What have we learned since 2005? Why have projects missed their targets? Why do investors often feel misled?Valuation of a project and the estimation of value is a more complex process than the evaluation of the merits of project development. The merit of project development can be clear from a prefeasibility evaluation, but this is no reason to skip the rigour of a feasibility study. The valuation of any project that is developed with any added risk should be discounted for this added risk.The development of a project impacts on other stakeholders, and the indirect cost of these impacts can have material implications for the cost structure, time and ultimate valuation of the project for its financial backers. The development of new projects (and thereby supply) can also have an impact on commodity prices, and therefore an impact on returns for financial backers.This paper will provide commentary on the author’s experiences and observations as a project developer and operator for 25 years, before becoming a project financier a decade ago.CITATION:Rozman, L I, 2016. Project evaluation and valuation – an investor’s golden rule, in Proceedings Project Evaluation 2016, pp 31–36 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Mar 8, 2016