De-risking a major precious metals project extension

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South Africa

De-risking a major precious metals project extension

South African Icon
South Africa

Company

Major precious metals mining company

Commodity

PGMs

Scope of work

Construction industry health assessment & execution roadmap for a major project extension

Challenges experienced

The client planned a large capital project that would expand its ore handling and processing facilities to a scale unprecedented for the African continent. Ambitious targets were set to achieve this complex project.

The project needed to be executed in a difficult environment. The once large, publicly-listed construction companies have been replaced by multiple privately-held companies. The client's sustainable development plan furthermore aimed at increasing historically disadvantaged community participation beyond the requirements set out by the Mining Charter.

The areas which were investigated included:
  • Perform a desktop study to understand the economic changes in the construction sector.
  • Analyse the impact that competing regional construction and supply demand would have on the project.
  • Investigate the labour availability to allow formation of the project execution compliment.

Approach to the solution

Fraser McGill developed a comprehensive study approach to systematically address the issues identified with the execution environment. A framing workshop was conducted to align the goals of all the stakeholders and to define the metrics of success. Next an industry analysis was conducted to gauge the health of the construction and supply industries.

Published information was concatenated and sector-specific gaps were identified. An insider view on the new privately-held construction industry was required.

Prominent contractors were interviewed to determine their project execution capacity and technical capabilities. The contractors were characterised into categories according to their focus areas, eg. Civils and Earthworks, Concrete and Build Civils, Control and Instrumentation, Electrical and were assessed on their Competencies, Safety Record, Orderbook, Organisational Transformation, Solvency, Ramp-up and Systems.

Informed with the inner-workings of the industry and the requirements for the project, a tailored project development roadmap could be developed.

Roadmap

Outcome experienced

The client received a comprehensive understanding of the construction environment. The risks and mitigation steps were defined. The repository of contractor information enabled the client to explore different project contractor combinations to execute portions of the scope with risk-adjusted battery limits. It informed the client of specific terms and conditions present and its approached required to effectively tender and schedule work packages. The alignment with the Sustainable Development Goals of the client were achieved.

To aid in the analysis of the demand for project resources, FM developed its Projects Demand Analysis Tool which is able to project the regional demand for construction commodities over the entire Sub-Sahara region, with a five year look-ahead. This tool enabled the client to gain an understanding of the positioning of its project in the greater Sub-Sahara landscape and its overall demand for resources within the execution timeframe. The tool can be applied to any industry or any type of infrastructure investment and provides decision-makers with unique insight into construction trends developing across the continent.