Viable project management for small-scale mining success

The multidisciplinary nature of mining projects requires strict, iterative processes in terms of establishing what will make the project and its future operation viable, says Johannesburg-based consulting and project management company Bowline.

While large mining companies are still executing new projects, small- to medium-scale companies are attempting to execute twice, even thrice as many new projects. These tend to be less successful. While these small-scale mining companies across Africa often receive financial support from their respective governments, a lack of planning and appropriate de-risking results in unsustainable operations, says Bowline MD Breton Scott.

“Smaller mining companies may not always have the in-house resources required to implement proper project management and it is highly recommended that they outsource.”

However, their inherent financial limitations ensure that they do not have the means to contract a large team of consultants. Although they need to be nimble and flexible, large teams may not be conducive to achieving those goals.

Small- or medium-scale mining companies tend to be more sensitive to macroeconomic factors and these, combined with mining projects being a long-term investment, mean that the projects need to be more resilient to economic fluctuations, especially during the project execution phases.

The project management approach and mine design should also be sufficiently flexible to create this resilience by accommodating economic fluctuations. The project management approach and project teams should be suitably conversant with these mitigating measures and respond accordingly, he explains.

“For example, should there be a downturn in commodity prices, the project should be in a position to adjust certain non-critical deliverables accordingly, by removing some of the less essential items, but maintaining the integrity of the project setup and remaining legally compliant.”

Scott says small-scale mines need not mimic the physical elements required at a large-scale mine to be legally compliant.

“Why build a R30-million brick-and-mortar equipment workshop when you can start by building a R30 000 hard stand, out in the open, that still enables you to maintain your mining equipment effectively and be legally compliant?”

The long-term goal should be to upgrade the workshop over time using operating costs and not capital expenditure, he adds.

Scott notes that small mining companies should not blindly accept the project management body of knowledge (PMBOK) as their code of practice, but appreciate that it is a guideline only.

PMBOK methodology creates a broad framework of standards, conventions, processes, best practices, terminologies and guidelines that are accepted as project management industry standards, as different-scale projects at different stages of development do not need to address all the elements of the PMBOK guidelines every time.

“The underlying principles should, however, be honoured for every project, but there should be a difference in use – PMBOK largely depends on the level of detail, scope of work and extent of resources required,” emphasises Scott.

When comparing large-scale mining projects to small- or medium-scale mining projects, the success factors or priorities are often very different, but aligning projects to business strategy is crucial.

The stipulated success factors for a given project dictates the appropriate project management approach and the PMBOK guidelines that should be followed.

Consequently, project owners must find the right balance between project management and effectively using resources without losing sight of critical items that can make or break a successful mining project.

Some of these critical items include risk management, resource management (mineral, human, financial and technical), budgeting, time management and balancing project delivery with sustainable business plans or strategies, Scott illustrates.

Accumulated Challenges

Addressing challenges relating to managing and tracking project performance of virtual project teams, and ensuring teams have been given very strict deadlines and deliverables, are imperative.

Another challenge in mining projects is collaboration or consultation with new emerging miners, which do not necessarily have extensive project development experience in the industry, as they tend to focus on “easy wins” as opposed to early, yet sustainable, wins, adds Scott.

Further, while the project management industry is facing challenges, technological development will create new opportunities.

“I see new development in the incorporation of artificial intelligence and data analytics, or project business analysis, into long-term projects. This is a means of simulating potential changes in the project’s environment to develop appropriate mitigating measures that can be activated in a timely fashion in response to contingencies  such as new legislation instituted, governmental regime change, unexpected climatic conditions, project ownership change, other project related risks et cetera – that can impact quality, safety, time and cost.” 

However, the project management industry is seeing some forward motion, as “big players in the mining industry are tired of waiting and are now entering into a ‘make or break’ stage: companies that have had projects lined up for a long time must execute them now or go out of business”.

Moreover, commodity prices are on an upswing, making some mining projects more viable and more attractive to investors. The current price trends also afford companies a certain level of flexibility and agility to adjust to changing market conditions, adds Scott. 

He concludes that a balance between using experienced in-house resources and like-minded and expert outsourced resources is key to fast-tracking mining projects without taking shortcuts.