Ken Thomas

Distinguished Lecturer 2014-15

Ken Thomas CIM 2017 headshot

In recognition of his outstanding contribution to the advancement of the Canadian mining and mineral processing industry.

Presentation title: Project execution & cost escalation in the mining industry

Since about 2002 there has been significant capital cost escalation, not inflation, in the mining industry causing turmoil for successful project completion. Project capital costs have more than doubled and some cases tripled in this time period. This has rendered many projects to be economically challenged and in some cases not viable. In addition higher than expected operating costs have further adversely affected project metrics such as NPV and IRR. Capital cost increases for projects have been widely reported globally. This lecture reviews three items. Firstly, why such capital increases and the various components that make up capital estimates. Secondly, it looks at reasons why preliminary estimates, for example at scoping and pre-feasibility level, have been lower than the ultimate constructed costs. Such increases and differences in estimates have caused major problems for mine builders and have led to a general nervousness on the part of those providing project finance. Thirdly, what discipline is needed in project execution in an attempt to mitigate such capital increases. The lecture will hopefully give a better understanding of the various issues and factors involved for those in the mining industry.

Biography

Until July 2012 Kenneth Thomas was Senior Vice President, Projects at Kinross Gold Corporation and previously, a Global Managing Director and Board Director at Hatch, a leading international engineering and construction firm. From 1987 to 2001 he erved in progressively senior roles at Barrick Gold Corporation, to the level of Senior Vice President, Technical Services, responsible for mine surface plants and infrastructure projects. From 1970 to 1980 he was with Anglo American Corporation, Southern Africa, in base metals, gold and uranium.

He has a doctorate in Technical Sciences (project implementation) from Delft University of Technology, The Netherlands, and was awarded the CIM Selwyn G. Blaylock Medal in 2001. Presently he is a Board member of Continental Gold, Candente Gold and Avalon Rare Metals.

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