“Unlocking the secrets to successful major capital investment studies is essential for any mining professional aiming to navigate complex project landscapes,” Enthalpy Pty Ltd associate Neil Conway said.
“It’s an old adage, but major capital investment studies involve doing the right project and doing the project right.
“Initially you have to assure yourself that the project is viable and it does meet all the requirements of the major projects for your operation. Then you have to ensure that you do the project right. In other words, you must make sure through the study process that you understand all the risks and issues around project implementation.
“Some of the major risks centre around the quality of the ore body itself. How much do you know about the ore body? Do you know what the product quality is? Do you know what the product quality is over time? What are your opportunities to counter any quality variations over time?”
These are some of the insights Conway shares with mining professionals as a facilitator of the AusIMM Strategy and Governance Short Course, which focuses on identifying and addressing blockers that hinder effective strategy implementation in mining projects.
Conway said that one of his greatest career achievements while working on major capital investment studies was the Clermont Coal operation.
“It was a major highlight in the sense that so many people had been telling us that it was not financially viable due to its depth,” he said.
“It was a very deep coal mine. We had to move over 90 million cubic metres of material in the initial box cut before we could access the coal seam. However, the coal seam itself was 40m in thickness and in some areas, it had been faulted, so it was over 90m – the seam had folded in on itself – and it was over 90m thick.
“Once we had access to the resource, the overall strip ratio was something like 3.2:1 and it decreased over time. It was unique. There was nothing else like that in Queensland.
“It was clear that the resource itself supported a significant operation for quite a long time. The issue was always the risk that something might happen during the period that we were putting in the initial box cut. As I stated earlier, 90 million cubic metres of material before we were in a position to actually mine coal. It was (a matter of) reassuring people about that risk.
“In actual fact, the operation was due to finish in 2021, but is currently operating at a reduced rate because the cash flow from the operation is very significant and I understand the current owner wishes to maintain that cash flow as long as possible.”
A strong strategy and governance framework empowers mining professionals to make informed decisions and achieve operational goals. Learn more about the AusIMM Strategy and Governance Short Course here.
