Integrated engineering projects company DRA Group CEO Paul Thomson notes that to mitigate risks for investors and mining companies, investment is needed in consulting engineers with experience, pedigree and a good record, which will save mining companies thousands in execution.
“Mining is a risky business for everyone involved; be it the investors, the owners, the local community, government, the contractors and the workers. “While everyone has a different risk exposure, it is safe to say that everyone suffers, should a mine fail or a project fail to be built.”
Addressing investors and mine owners in his speech at the annual Investing in African Mining Indaba earlier this year, Thomson pointed out that there were risks associated with project funding, which had become more noticeable in the recent past, owing to a number of good projects failing to get the funding recipe right.
In light of this, he indicated that DRA had access to “innovative” funding structures, institutions and funds that could assist the project with the right metrics in filling the funding gap.
He warned that companies should choose an engineering, procurement and construction or an engineering, procurement and construction management partner with care. Further, companies need to look for partners with in-country experience and a litigation record and stay away from fly-by-night partners.
Thomson advised that one should choose partners that have a great record in terms of delivering projects on time and on or below budget. Some basic checks will give you a clear view on the capability of the contractor.
He also pointed out that companies should look for a supplier that is prepared to share risks and which is prepared to enter into customised contract models that share risks and rewards based on “pain and gain”.
Thomson explained that one of the easiest risks to mitigate is the operational readiness risk, which, he added, is unfortunately often neglected and results in production grinding to a halt shortly after commissioning.
“A properly constructed operational readiness report will address issues like legislative compliance, equipment procurement and lead times, skills assessments, recruitment, training, procurement, ramp-up schedules, consumable consumptions and safety systems,” he said.
Thomson also cited the importance of the mining industry’s social licence to operate within communities. Owing to most mineral deposits far away from universities and technical colleges, often the skills required to operate a mine are often not available locally, but a company’s social licence requires it to recruit locally.
“DRA partners with asset owners and their suppliers to develop local skills to be able to build the mine. “Many of these skilled workers will continue at the mine after construction.”
Thomson elaborated on DRA’s experience in the operational readiness sphere by shedding light on the offering of its subsidiary company Minopex.
“Through Minopex, DRA can offer companies a completely outsourced operation and maintenance contractor model that can provide the security of having a company’s assets operated as was intended during the design – from commissioning through ramp-up to nameplate and beyond – leaving the company with a skilled workforce.
He concluded his speech by emphasising DRA’s knowledge of Africa and its operating realities, reminding the audience of DRA’s recent project achievements, saying this made the company the leading choice for project engineers. Its safety record is exemplified by the 9.9-million lost-time injury-free hours at gold miners AngloGold Ashanti and Randgold Resources’ Kibali gold project, in north-eastern Democratic Republic of Congo, including constructing the mine on time and within budget, despite incredible logistical challenges.
DRA also worked on a megaproject in Ghana, consisting of bush clearing to first gold pour, which took 14 months, and delivered a mine on time in Liberia, while working through the Ebola crisis.