Author: Nicole Belbin

by Nicole Belbin Nicole Belbin No Comments

Accurate cost estimations call for an industry-specific approach

Accurate cost estimations can make or break a project – and estimating in the resources sector calls for specific knowledge unique to our industry.

AusIMM, the peak body for people working in the resources sector, is offering the next round of the ‘Cost Estimations for the Resources Industry’ short course, commencing on 25 October, 2021.

Facilitated by Enthalpy Chairman and Founding Director, Neil Cusworth, the course offers the opportunity to refine skills with a program designed specifically for the resources sector. Neil will be joined by other experienced industry leaders, each sharing insights from various operations case studies.

Delivered online over four weeks, the course will gives the foundational tools and techniques to perform capital, operating and business cost estimations – from scoping to feasibility studies, drawn from the AusIMM Cost Estimation Handbook.

Topics include:

  • The purpose, characteristics and terminology of cost estimates in expenditure decisions and project studies
  • Methods for estimating capital, operating and business costs
  • Accuracy, contingency, owner’s costs and timing
  • Estimation techniques, shortcuts and checks
  • Benchmarking to validate cost estimates
  • Estimating costs for emerging technologies.

Learn more: https://www.ausimm.com/courses/short-courses/cost-estimation/

by Nicole Belbin Nicole Belbin No Comments

A Capital Investment System – the support and assurance needed to back the right decisions

Investment decisions to develop new capital assets or acquire existing ones should be made on information via a phased evaluation process. The technical and other project information changes over time and in essence is never final. Due to this uncertainty, investment decisions and mining projects are never absolutely accurate and complete in forecasting the economic outcomes.

However, using systematic processes and achieving study standards ensures the investment evaluations achieve known content, quality, and accuracy levels.

There are many examples of mining investment decisions which did not deliver the forecast values. Enthalpy considers that either or both of two fundamental aspects underlie such unfavourable outcomes:

  1. The investment decisions were made on flawed, inadequate, or inaccurate evaluations.
  2. The new project developments or project acquisitions were not able to be delivered to the evaluations made.

A disciplined and rigorous approach using a capital investment process to the evaluation of mining capital investments addresses the first aspect.

The second aspect – the ability to reliably deliver the investment decision, via project implementation or business acquisition – is dependent on diligent project management, supported by a focus on planning and controls.

There are three primary management mechanisms that underpin the consistent delivery of new assets and projects:

  1. Minimum Standards of content, quality and accuracy
  2. Study and Project Planning and Control Standards
  3. Independent Peer Review Processes.

While project owners may use these three management processes to varying extents, many companies don’t define the Minimum Standards to be achieved for the content, quality and accuracy of studies. Instead, they adopt general guidelines or use generic checklists.

This can lead to a major failure because decision makers don’t define the quality to be achieved as a prerequisite for their investment decisions.

Enthalpy’s Capital Investment System addresses these key aspects in one system.

The importance of thorough planning is to bring together the right people, processes and platforms to ensure the best projects are selected for investment and implementation, and then well planned and executed effectively.

Learn more about Enthalpy’s Capital Investment System.

by Nicole Belbin Nicole Belbin No Comments

Media release – Enthalpy Capital Investment System now available on Concerto Analytics Digital Platform

Enthalpy and Concerto Analytics have partnered to make the Enthalpy Capital Investment System available on the Concerto business platform, to enhance visualisation and optimise project management and delivery for mining studies and projects.

The Enthalpy Capital Investment System is a robust methodology developed over three decades and 800+ projects and used by mining companies to improve strategic decision making to build and implement their investment strategies.

“The Enthalpy Capital Investment System is a proven, rigorous process already being used by global resource and infrastructure companies, with financial institution recognition,” said Paul Harper. “We are excited to be partnering with Concerto so the Capital Investment System can now also be made available on an advanced digital platform,” Paul added.

Concerto’s business platform, powered by Google Cloud, was launched into the market in 2019 offering a powerful and intuitive tool that helps companies’ model, visualise, simulate and optimise their business strategy.

“Concerto has partnered with Enthalpy because we see mutual benefit in making the Enthalpy Capital Investment System available on our business platform, which provides real time data, scenario modelling and a single source of information,” said Stephen Williams, Chairman of Concerto Analytics. “Enthalpy has a long, impressive track record of optimising capital-intensive projects across the mining, resources, energy and infrastructure sectors. By partnering with Enthalpy and making the Capital Investment System available on our platform, we are helping companies increased visibility, transparency, and time to value for their mining projects.”

 

About Enthalpy

Enthalpy is a leading independent provider of advisory services, implementation support and business products dedicated to optimising capital-intensive projects across the mining, resources, energy and infrastructure sectors. Over three decades and 800+ projects, Enthalpy’s thorough planning in bringing together the right people, processes and platforms has ensured the right projects are selected for investment and executed successfully, with minimal risk and optimal returns.

More at https://enthalpy.com.au/

Learn more about the Enthalpy Capital Investment System

About Concerto

Concerto Analytics is a leader in prescriptive analytics software and business improvement consulting. The Concerto Prescriptive Analytics platform and Industry Content Marketplace provide customers and partners with an advanced analytics capability for boosting continuous improvement and driving cost out of the value chain. Together Concerto works with a global network of industry partners across sectors to help customers improve the performance of their operations.

More at https://concertoanalytics.com

Learn more about the Enthalpy Capital Investment System Powered by Concerto

by Nicole Belbin Nicole Belbin No Comments

Before developing a mining project, make sure you’re developing the right one

It’s a characteristic feature of the resource industry that no two orebodies are the same and consequently no two projects are the same. The development of resource projects requires the investigation of a vast range of issues across a variety of engineering and geoscience disciplines, as well as factors such as environmental, social and governance (ESG), marketing, legal and commercial.  But the principal purpose of mining studies is to determine whether development opportunities make good business sense, not just whether they are technically and economically feasible, and that they can be constructed and operated in a sustainable manner.

For Boards to approve shareholder funds, the value proposition of an investment opportunity must be fully understood by the decision makers and presented with full transparency. A sustainable project strategy and risk-to-reward profile must meet corporate criteria so that an informed decision can be made with respect to progressing the project to the next phase of study.  The project evaluation has to be based on the level of risk and the accuracy of the forecast of outcomes. The project must also be aligned with the company’s business strategy.

The more shareholder funds are made available to evaluate an investment, the greater the level of accuracy and confidence to decide to advance the project. The question then becomes how much to invest, and how to achieve a well-defined framework to assist in this decision-making process. The right decisions start with right questions and having the best data available at the right time. It’s critical to be sure you’ve got the right project before you develop it.

Experience has shown best practice is adopting a phased, step-by-step approach to the evaluation of potential options to expend shareholder funds effectively and efficiently. With any potential investment there is a need to identify flaws, key risks and knowledge gaps to determine if the investment should advance or whether different options should be developed and restudied.

To minimise the chance of delivering anything short of a successful project, a mining study needs to ask the following questions:

  • What could it be? – explore a range of potential options for investment
  • What should it be? – investigate and evaluate different processes, capacities, locations and configurations to determine the best business case to meet business goals, and then recommend if further evaluation is warranted
  • What will it be? – consider whether the final project that achieves adequate return on investment is a sustainable value proposition that makes whole-of-business sense.

The right decisions start with the right questions and the right data at the right time. A disciplined and rigorous approach to the evaluation of capital investments can help achieve successful project delivery.

Learn more about Enthalpy’s Capital Investment System.

 

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