In today’s world of constrained capital, engineering, procurement and construction, consultant WorleyParsons notes that clients in the mining sector are seeking ways to improve returns while reducing their exposure to risk, particularly those companies that need to make strategic decisions on potential investments.

WorleyParsons CEO Denver Dreyer states that front-end services are critical in a cash-strapped environment. As a result, the company, through its global advisory and technical consulting arm Advisian, has introduced optimisation tools to help its clients identify opportunities upfront and create value across every phase of a project. This is to ensure that once a project is ready for execution, it has the highest probability of success.

Advisian sub-Saharan Africa regional executive manager Adam Boughton says the company’s optimisation tools help address the modern day challenges that mining companies are facing and offer real solutions to real problems.

“We draw on our deep domain expertise and experience in the mining sector to advise our clients and then partner with them to implement that advice. Our solutions and tools are centred on creating assets, improving asset efficiency and sustainability, and optimising asset portfolios.

“When used together, these tools go beyond optimisation – we can identify risks and mitigate them, as well as identify opportunities across the full business value chain. This combination of multiple techniques has improved our capability to help our clients reinvigorate stalled projects and current unprofitable operations,” Boughton says.

Forecasting risks and returns needs to be evaluated in a clear model. To this end, he explains, Advisian uses a unique financial and technical process model called StepWise. This provides the best possible technical alternatives for a project in a quick and cost-effective way, so that clients can make the right investment decisions. It is a low-cost approach that provides a sales case based on the client’s desired business outcomes and identifies risks and opportunities early on in the project development process.

Operational Improvement
Advisian operational improvement advisory principal Steve Burks explains that operational improvement increases net cash flow by boosting revenue while simultaneously reducing costs.

“Our objective is to implement recommendations and embed them into the culture of the operating company [to steadily improve] cash flow during the entire life of the planned operation,” says Burks.

Advisian recently entered into a regional framework agreement with mining strategist Whittle Consulting Africa to enhance and extend its optimisation capability. This focuses on early cash flow to achieve significant improvements in net present value. Advisian links this technique with nine other business improvement mechanisms and identifies the most beneficial mix of technical, project delivery, and conventional management consulting processes.

The consulting firm has also entered into a regional framework agreement with project management firm Ensight Energy, which will enable its clients to implement energy optimisation initiatives and realise immediate short-term benefits.

Advisian highlights that the initial assessment and energy efficiency initiatives will improve cash flows steadily through the entire life of the planned operation.

“Ensight Energy has deep domain experience in solving energy challenges. The combination of Advisian’s heat recovery expertise and global engineering, procurement and construction management capabilities through the WorleyParsons group, together with Ensight Energy’s approach to energy optimisation and record in energy cost savings, provides our clients with a comprehensive suite of energy optimisation solutions covering every aspect of their operations.

“Mining companies and investors need energy surety in order for new projects to be successful. The Advisian/Ensight joint energy optimisation solutions will provide unparalleled capabilities for businesses that have energy challenges,” says Boughton.

Transaction Services
An additional service offered by Advisian is the provision of comprehensive services to support corporate and project development transactions, leveraging the company’s due diligence processes and capabilities according to the structure and requirements of each different transaction type, across all sectors including minerals and metals.

“We support corporate development (‘inorganic’ growth transactions) by providing technical and environmental due diligence for mergers and acquisitions with buy-side target due diligence, and divestitures with sell-side vendor due diligence,” explains Boughton.

He states that the firm also supports project development by acting as lenders’ independent technical and environmental adviser for nonrecourse project finance, export credit agency finance and structured trade commodity finance.

“Our approach is to focus on providing independent assurance by rigorous analysis of the available documents and material issues associated with the investment. Our key deliverable is a succinct report with a focus on the material issues which present residual risks,” Boughton adds.

Dreyer points out that the specialist services offered by Advisian enable WorleyParsons to partner with clients right from the start of a project. This ensures that a project is financially viable, while also ensuring that opportunities are identified upfront to develop optimised strategic plans.

“With Advisian spearheading the study phase, WorleyParsons can take the project across all the phases of the asset life cycle [offering] the maximum probability of success,” he concludes.