Portfolio and program management in mining

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Fit for purpose contract strategy

A considerable number of large mining capital projects were placed on hold as commodity prices lowered beyond breakeven points in late 2015 and early 2016. Now that commodity prices are recovering from notable lows, mining organizations are beginning to re-energize much needed capital investments.

With the large number of capital projects expected to impact the market near the same time, owners are carefully considering the appropriate project delivery and pricing strategies to increase the likelihood of success for developing new mine assets.

The large-scale, multi-party involvement and compressed project timelines associated with these projects increase their complexity and need for a well-designed contract strategy and integrated risk management.

What mining companies/executives can do

Mining executives strive to develop and deliver project portfolios with cost and schedule certainty while achieving excellence in safety and quality. To successfully and effectively achieve this vision, we believe mining companies should consider the following steps: 

  1. Identify and execute the optimal contracting strategy and delivery/pricing model based on a thorough review of all project, owner, and market risks and drivers.
  2. Implement a corresponding governance, oversight, and management structure based on the select contracting strategy with defined roles and responsibilities.
  3. Leverage company resources or a centralized PMO to facilitate consistent reporting of capital project status updates and tracking against defined benefits across the portfolio of capital projects.
  4. Design and implement a consistent and holistic risk and issue management approach to allow risk identification to occur across the organization and provide a routine and actionable process to analyze, respond, manage, and monitor across the project and portfolio.
  5. Leverage the “right” project management tools and technology to provide real-time project data to allow for timely and accurate reporting that facilitates active management and informed decision making throughout the lifecycle of the project.
  6. Establish capital efficiency by integrating strategy with planning and execution, with real-time value measurement, KPI’s, and lessons learned to better inform capital allocation decisions. 
    These steps help forward-thinking mining companies successfully deliver major capital projects as necessary to implement their strategies, fulfillment of regulatory and environmental responsibilities, and protection and enhancement of shareholder value.

Contact us

Bobby Marandi

Bobby Marandi

Partner, Risk and Regulatory, PwC US

Reid Morrison

Reid Morrison

US Energy, Utilities & Mining Advisory Leader and Global Energy Advisory Leader, PwC US

Anthony Caletka

Anthony Caletka

Principal, Capital Projects & Infrastructure Energy Leader, PwC US

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