Building and Maintaining

Effective Project Teams

John Wells, Allen Hennessy, Leticia Conca, Kenneth Thomas,
Richard Dewhirst and Alvaro von Borries.
 Sleeping with the Enemy
" This was the name of a famous
Hollywood Movie. In our paper it describes
how to build and maintain a big team of
different people and personalities in a
coherent group. They might not always like
each other but they need to overcome that
and produce good results."
 Introduction
The years 2002 to 2013 were difficult for the mining industry
Increases of 100% - 300% in the capital costs of projects (escalation)
& Schedule delays
Take overs followed by significant write downs (world wide)
Escalation affected majority of commodity projects
Loss of Investor confidence
Project Period Capital growth
Pascua Lama, Barrick, Chile 2009 to 2013 $3.0b to $8.5b
Cerro Casale, Barrick, Chile 2006 to 2011 $2.6b to $6.0b (FS)
Minas Rio, Anglo, Brazil 2009 to 2013 $2.7b to $8.8b
Gorgon, Chevron, Australia 2009 to 2013 $43b to $52b
Ramu Nickel, PNG 2007 to 2008 $0.8b to $1.4b
 Location and Infrastructure
Mining companies forced to look in remote countries/location - DEMAND

Arid, remote and very high elevation locations; e.g.

Pascua Lama at 4,500m
Borders two countries Chile/Argentina
Capital cost +$8.5b

Infrastructure costs for remote projects exceeds the cost of the mine & process
plant
Water supply; pipelines and pumping systems to 3,000 meters (Chile)
Power supply (+ Corona effect high elevation)
Desalination plants
Concentrate pipelines
Access roads
Israel 40% potable from sea water

Capital & Operating Cost Increases

 Front End Loading
Front End Loading Phases
Business Planning

FEL - 1 FEL - 2 FEL 3 FEL 4

Project Start-up &
Pre- Execution Operations
Scoping Feas.
Feas.
Study Study
Study

Business Planning includes Strategic Plan:

Defining Project Strategy: project size, production profile,
financing, etc.
Develop Financial Models & Conceptual Engineering
Liaise with Projects, Operations & Finance
+ 3 year process
Conundrum: is value lost owing to execution delay?
 Composition and Experience of the
Engineer and Client Teams
Project Directors
and Sponsors

Engineer/Consultant
Client/Owner Team
Team Daily Interactions
(1-20 people)
(10-100 people)

Need people who understand Project work

Need people who can work as a team
Need excellent leadership
Everyone need to understand their scope, role
and responsibilities
 The Critical Role of Process Engineers
Projects are frequently dominated by Process
Issues. However this pre-eminent role may
reduce in the future as social, infrastructure and
environment become increasingly important.
Projects need guidance from Process Engineers.
Many other disciplines cannot or should not start
work until key process issues are agreed.
Project needs EARLY definition of the key Process
Parameters.
Process Engineers ideally have many years of
project AND operating experience.
 Background
Only 35% worldwide inflation from 2000 to 2012
Commodities increased 100 to 300%
Mining projects more than doubled costs due to
several factors
Equipment, construction & labor
Remote site location
Increase in social and environmental regulations
Metallurgical complexity
Engineering - Project teams
 Background
Escalation Factor Increase [%] Impact [%]
Equipment costs 200 - 300 50
Engineering costs 100 - 200 25
Construction costs 200 - 300 50
Location 100 - 200 50
Environmental issues 100 25
Community relations 50 15
Lack of experienced personnel 50 - 100 25
Detail required 100 20
Total - 260
 Background
Costs escalation impact due to project teams
Salaries increased - by up to 100% - to attract
personnel
Young engineers assumed senior roles
Personnel recruited from non-mining industries
High professional mobility within the industry
Project teams deteriorated impacting the
outcome of projects on quality, cost and schedule
 Getting Started
Project teams have a very significant impact
on the final cost and schedule
Essential that there is good cooperation and
teamwork between Client and Engineer teams
Bidding process
Define scope of work
Get a good plan and realistic estimate
Poor estimate and plan causes conflict
 Engineering and Client Teams
Need for the right experience in both teams
Size of Project teams
Small vs. large Client team
Importance of effective communication
Trust
 Project Execution
Office layout
Meetings
Kickoff
Alignment
Weekly and monthly
Sponsors / peer review (Quarterly)
 Project Execution
Metallurgical Testing should be essentially
COMPLETE before study or project starts
Freeze Critical Process Documents
Social and environmental
Consider constraints early
Detail needed for EIA
Serious risk of delays
Environmental-Process-Engineering liaison
 Conclusions and Recommendations
Project work has become more complex which
has added to the cost and schedule of
projects.
Project costs became inflated in the 2000-
2011 super-cycle. Salaries of personnel
escalated in response to the high demand for
services.
In the current slow-down, it is possible that
costs will stabilize or in some cases reduce.
 Conclusions and Recommendations
Process engineers have a critical role to play. The
key process documents need to be finalised early.
Major changes to process designs generally cause
more harm than good and need to be fully
analysed before incorporating in the design.
Personnel need to be both well qualified and well
suited to working in a project environment. Good
operating engineers might not necessarily be the
best design engineers.
 Conclusions and Recommendations
There is a greater need for project team members
to be able to work in a very co-operative
atmosphere, with excellent communication and
sharing of ideas in an open forum.
Most process testwork should be complete
before engineering starts.
Geometallurgical modelling, is of value if used
wisely, but when it leads to endless testwork it
may be questionable.
 Conclusions and Recommendations
Beware new technology that is unproven.
There have been too many instances of new
technology not living up to expectations.
The authors have written this paper to share
some of their experience and the "do's and
don'ts" in project work and it is hoped to help
the next generation of project engineers to
build on existing good practice and avoid
some of the mistakes of the past.