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New entrants could impact on project management trends

14th February 2014

By: Donna Slater

Features Deputy Editor and Chief Photographer

  

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Engineering, procurement and construction management (EPCM) services provider Tenova Bateman says several relatively new entrants in Africa’s mining sector may play a pivotal role in evolving project management trends.

The most influential participant is China, a country becoming more prominent in Africa, Tenova Bateman sub-Saharan Africa project execution senior GM Stehan van der Post tells Mining Weekly.

He explains that Chinese miners’ approach to consulting with contractors and implementing projects, especially in sub-Saharan Africa, is markedly different to the approach of the mining houses that dominated the market in the past.

“We gained valuable experience with Chinese miners during projects we have been involved in over the last three years in countries such as Namibia,” says Van der Post. He notes, however, that miners who are new to Africa and who are trying to establish themselves on the continent always present a “unique challenge”.

He adds that Tenova Bateman accommodates changing market requirements by focusing on clients and providing tailor-made solutions.

“It is necessary for project houses to be flexible, as they need to adapt to clients’ specific needs,” notes Van der Post, further pointing out that a rigid approach might discourage prospective clients who require a unique method of project management.

Future of Project Management
Van der Post notes that growth in the mining industry is currently slow, compared with historical trends.

The fact that the industry is “extremely competitive” does not help, he says, adding that many projects do not receive funding to proceed. “Given the shortage of new capital projects, a project management company needs to be clear on what it offers, and communicate that to market,” says Van der Post.

“An important part of ensuring that we develop the best client solutions is the innovation that we bring to our project through our flow sheets and design. We focus on developing solutions through . . . the most advanced technologies, always seeking to balance process efficiency with capital expenditure and operational expenditure requirements through fit-for-purpose solutions.

“Our approach to project implementation further enhances this by ensuring a high level of control over all the stages of a project, productive use of project resources and effective teamwork between ourselves, our client and our subcontractors,” he says.

He adds that the need for external project management is definitely a growing trend from the owner’s perspective. Van der Post says the range of services a project management company provides needs to be comprehensive, as should the depth and breadth of knowledge and experience that the company employs, to be able to effectively integrate the various elements of the project value chain to provide a single point of contact.

“You do not necessarily have to have all the services under your own umbrella, but you certainly need to provide a single point of contact for the clients,” he says.

The Key to Success
Van der Post believes that an alignment of objectives between all project parties is key to a project’s overall success.

Tenova Bateman’s core focus is on building solid partnerships with all its clients to ensure objective transparency throughout the project’s life cycle.

“A good working relationship between the client’s project team and the EPCM’s project team will ensure proper alignment of objectives, resulting in less energy being spent on exhaustive efforts to manage a detailed contract,” he notes.

Van der Post adds that major mining clients approach projects differently, compared with most midtier and junior mining companies in terms of project evaluation, depth of feasibility studies and capital available for projects, among other facets of project management.

Major mining houses emphasise building the right business relationships by focusing holistically on a portfolio of projects and the project pipeline. “These mining houses require strong business relationships with the engineering and construction service providers,” he says.

Identifying mature service providers is another key aspect of ensuring the success of a project, especially when dealing with complex projects, says Van der Post. With the assistance of corporate maturity assessments, the competence of EPCM contractors can be determined by assessing the quality of their work and expertise before commissioning them.

Funding
Van der Post explains that newer compa- nies often face a stumbling block in the form of funding. “In the junior to midtier arena, assistance with project funding is impor- tant,” he says, adding that companies usually rely on external facilitation of funding to allow for feasibility studies and projects to proceed.

“Tenova Bateman is active in this regard and there are various ways through which we can help secure funding for projects and feasibility studies,” he says.

Besides the traditional financing providers, Van der Post says many governments are willing to provide grants to support feasibility studies.

Tenova Bateman has a strong team specifically focused on project funding to assist midtier and junior companies with key aspects of securing funding. This prompted Tenova Bateman to adopt a commercially flexible approach when dealing with junior and midtier companies.

“We pay special attention to risks involved in smaller projects, especially with regard to schedule and capital overruns,” says Van der Post. He explains that Tenova Bateman, through its proactive approach, is willing to take some of the risk on board when it is provided with sufficient definition, in terms of prefeasibility studies, for example.

“We would need to investigate a progressive lump-sum model, taking on progressive risk where the definition allows us to,” says Van der Post. On that basis, Tenova Bateman studies clients’ funding models and takes into account their risk appetite according to their existing project portfolio.

Sustainability
Van der Post further highlights sustainability as a continuing key industry trend.

He explains that to keep up with this trend, companies need to conduct broader prefeasibility and feasibility studies that encapsulate all aspects affecting sustainability, such as a project’s impact on local communities and the environment.

Van der Post says the implementation phase is the pinnacle point of any project.

“We focus on detailed planning, after which we implement the project as quickly as possible. The detailed planning phase ensures that sufficient definition is gathered so that we can get production under way as soon as possible,” says Van der Post.

Tenova Bateman is a member of the Construction Industry Institute (CII), which provides access to international standards of best practice. Van der Post notes that being a member of the CII is integral in keeping up with industry-based best practice, reinforcing the need to stay at the forefront of innovation within the built environment.

Project Scope
Tenova Bateman is currently involved in studies for the expansion of London Mining’s Marampa iron-ore project in Sierra Leone; planning has started for the execution phase of the project.

The company is also involved in a joint- venture (JV) EPCM contract with engineering consultancy and project management service provider AMEC. The project was awarded to the JV by Swakop Uranium in late 2012 for the Husab uranium project – Namibia’s largest. Tenova Bateman has a project team supporting the Husab project office in Bryanston, Johannesburg.

Tenova Bateman is also undertaking several studies for projects in Botswana, Mozambique and Namibia, among others. For example, it is involved in a feasibility study for a pig iron project for Mozambique-focused mining company Baobab Resources, and for the North River lead/zinc project in Namibia.

Edited by Samantha Herbst
Creamer Media Deputy Editor

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