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| Capital optimisation – Iron ore mine/rail/port system
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Context / Scope of project
A rapid shrinking of capital availability and slowing demand for ore led a major iron ore producer to undertake a comprehensive review of planned expansions to mine, rail and port infrastructure. The review was of the complete direct cost budget as at the end of pre-feasibility estimating and prior to moving the projects to detailed design. Central to the review was the understanding that the total tonnages and certain process parameters must be maintained.
Client achieved:
In 9 weeks-
- 20% CAPEX reduction on the primary project under review
- 19% CAPEX reduction overall across the three expansion projects
- A total of more than $5.4 billion dollars worth of ideas were reviewed and documented
- An additional $0.35billion in documented ideas ready for signoff after the completion of the review
- A more robust and clearly defined project scope for progression to detailed design was established
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What we did:
- Identified the areas for highest potential savings
- Developed driver trees to identify the key assumptions and drivers leading to current capex/opex levels
- Ran structured Idea Generation Sessions with client and EPCM team around areas of high potential savings
- Assessed feasibility and risks of priority savings ideas (technical, environmental, safety, capital and operational)
- Actively project managed the ideas through a pipeline, tracking progress and providing coaching to ensure ideas processed in the short timeframe
- Summarised key possible ideas on summary forms and syndicated with various stakeholder groups
- Gained approval/hold/rejection from Steering Committee for each idea
- Developed framework for future project reviews
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