The mining industry is no stranger to volatility. From fluctuating commodity prices to global pandemics, the challenges are robust. It’s never been harder for mining projects to stay on schedule and within budget. In fact, an article by EY revealed that a staggering 64% of mining and metals megaprojects experienced cost overruns or delays, according to their 2021 study.

The consequences of these failures are significant, impacting not only the bottom line but also the industry’s reputation and ability to attract investment. EY’s article rightly points out that the concept of capital productivity is key to overcoming these hurdles. By optimizing project management practices and leveraging the right tools, mining companies can unlock substantial value: 15–30% of project value, EY estimates.

Let’s take a closer look at the concept of capital productivity in mining and explore how a holistic approach to project management can revolutionize mining project delivery.

Understanding Capital Productivity in Mining

In the simplest terms, capital productivity is a measure of how effectively your investments generate operational output. It’s essentially a multi-billion dollar assessment of value for money. According to EY, there are two primary ways mining companies can enhance their capital productivity:

• Controlled Project Delivery: By minimizing and making project inputs predictable, companies can better control costs and timelines
• Optimized Asset Operation: Maximizing output involves strategies like accelerating project schedules and improving operational efficiency. This could mean increasing equipment availability, refining utilization processes, or enhancing workforce skills

However, achieving these goals is often easier said than done. EY identifies six major risks that frequently undermine productivity in mining projects, including project management factors, stakeholder conflicts, disruptions to supply chain, the workforce, or due to digital transformation, and an unstable external environment.

While some of these risks are beyond a mining company’s direct control, project management is not. By investing in robust project management capabilities and tools, mining companies can take significant strides towards mitigating these risks and improving capital productivity.

The Role of Project Management in Enhancing Capital Productivity

To address the challenges inherent in mining projects, a holistic approach to project management is needed. Foresight is designed to tackle these elements head-on, providing mining companies with the tools they need to optimize their projects and maximize their return on investment.

Adequate Time Contingency

Foresight’s advanced scheduling analytics features allow for the creation of detailed project plans with built-in contingency buffers. These buffers can be adjusted dynamically as the project progresses, ensuring that resources are allocated effectively and that unexpected events don’t derail the project timeline or budget. By building appropriate contingency buffers into timelines, mining companies can ensure that decisions are based on realistic expectations, mitigating the impact of unforeseen events and reducing the likelihood of costly overruns.

Resilient Supply Chains

Assuming all contractors, sub-contractors and suppliers are on the platform, Foresight’s real-time tracking and monitoring capabilities provide complete visibility into the supply chain, enabling mining companies to identify potential bottlenecks or delays before they become critical. This allows for proactive intervention and ensures that materials, equipment, and workforce are available when and where they are needed. By ensuring a resilient supply chain, mining companies can maintain project continuity in the face of disruptions, a critical factor in achieving capital productivity.

Agile Governance

Foresight’s centralized platform facilitates collaboration and communication among project stakeholders, ensuring that everyone is on the same page and that decisions are made quickly and efficiently. The platform also provides real-time reporting and analytics, giving decision-makers the information they need to make informed choices that drive project success. An agile governance framework, supported by Foresight’s tools, empowers fast, data-driven decision-making, keeping projects on track and optimizing productivity.

Portfolio View

Foresight’s portfolio view enables mining companies to prioritize projects, allocate resources effectively, and track the performance of their entire project portfolio. This holistic view allows for better decision-making and ensures that investments are aligned with strategic objectives. By effectively managing their capital portfolio, mining companies can optimize their investments and improve long-term business performance.

The Future of Mining Project Management

The mining industry is at a crossroads, with ongoing uncertainty and volatility demanding a new approach to project management. Digital tools and data-driven decision-making are no longer luxuries but necessities for mining companies aiming to thrive in this challenging landscape.

Foresight equips mining companies with the tools to navigate complexity, mitigate risks, and optimize capital productivity. By embracing a holistic approach to project management and leveraging the power of digital solutions like Foresight, mining companies can not only survive but thrive in the years to come.

Ready to unearth the full potential of your mining projects? Schedule a call to explore how Foresight can transform your mining operations and unearth substantial value.