Capital Optimization – or How to Cut CapEx by 15-30% Without Sacrificing NPV

The cost of bringing a mining project into production has increased drastically in the past 10 years. Projects have become larger and more complex, and – combined with input cost inflation – are two to three times as capital intense as 10 years ago.

In response, project budgets are forcibly cut and compressed, but often without appropriately adjusting scope, controlling risk, or improving productivity. It is little wonder that most projects fail to achieve their budgets.

Yet this need not be the case. In our experience, capital costs can often be reduced by 15-30% without loss of NPV or increase in risk by applying our LESS approach:

• Lean: addresses overengineering by optimizing site layout, simplifying and standardizing design, and modularizing to reap schedule and off-site fabrication benefits;

• Efficient and effective: stressing practices that maximize tool time and equipment utilization;

• Standardized: standardizing and replicating facilities to realize efficiencies;

• Structured and Systematic: applying a rigorous change management process that relies on decision rights, tools, and templates to support fact-based decision making.

In this session, we will showcase our approach for achieving these results, with examples from a range of mining projects.
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