The mining industry plays an important role in the global economy. However, despite significant investment in capital projects in the mining sector, failed projects are unacceptably frequent, and the success rate of mining projects leaves much to be desired. Due to the significant shortcomings in the sector, the CII Africa Chapter and CII’s Upstream, Midstream, and Mining (UMM) Sector Committee commissioned this research, which adds a Project Definition Rating Index (PDRI) for mining projects to the family of PDRIs already developed by CII. This research adds additional resources for mining projects, as they have unique attributes such as long study periods, high capital value, and a reliance on metallurgical and geological investigations during the study.
Research Team 366 (RT-366) followed a methodology similar to the ones earlier CII research teams used as they developed the previous PDRIs. After soliciting input from industry participants, the authors conferred with experts from mining operations and in engineering, procurement, and construction management companies to identify, refine, and assign weights to 180 elements. RT-366 validated the weighted PDRI for Mining Projects by testing it against completed projects. The added elements include those that are critical to the mining sector; for example, evaluation of the jurisdiction where the project will be executed and revenue generation assumptions regarding royalties, government charges, hedging, and import/export law.
Teams can use the PDRI for Mining Projects to measure the level of maturity of a mining project study. This new tool can assist both decision-makers and project team members in assessing the readiness of a project study to progress on to execution. A project team can step through the tool’s comprehensive, weighted list of elements to address issues during the front end planning phase of a mining project. This process can help project team members find a common understanding of which areas to study and show the relative importance of the various elements. Project teams can use the PDRI as a self-assessment tool during any stage of the project study, to identify which areas of the study require more definition. Teams can also use the tool to calculate an overall PDRI rating at any stage, and this rating will indicate the overall level of readiness of the project to proceed to its next phase.
1 : Scores from the PDRI for Mining Projects Can Help Predict Project Outcomes
Based on their analyses, the researchers could identify a cutoff point for each of six aspects of project performance. They also used linear regression to fit the data to a straight line, enabling them to predict the effects of increasing or decreasing the PDRI score by 100 points. The team discovered the following findings (FR-366, pp. v-vi).