Lauded by the Australasian Institute of Mining and Metallurgy for his “big picture” view of the industry and its challenges when recently receiving the institute’s Beryl Jacka Award, Enthalpy CEO Paul Harper believes miners have had a preview of their rapidly shifting future in the past few years.
Harper, a 40-year industry veteran, has seen impacts from a pandemic, international geopolitical and economic reset, technology and environmental, social and governance (ESG) issues through the prism of Enthalpy’s project study, review and implementation work.
The Australian consulting firm has built deep mining IP over more than three decades of strategic planning and optimisation of over 800 projects.
Harper says the rate of recent change and the unique challenges currently in front of miners make it imperative that key lessons being learned lead to faster adaptation than the industry has been used to in the past.
“I don’t think we have a choice,” he says.
“We say we’re going to produce double the amount of copper in the next 20 years or so that we’ve produced altogether since we’ve been on the planet … at the same time as we embrace a green energy paradigm.
“Yet there doesn’t appear to be a lot of confidence in opening new mines.
“We have people and political leaders talking about green renewable energy without the connection with investment in mines – and the level of certainty that requires – to underpin the energy transition.
“The contradiction does lead to confusion and I think the industry must respond like never before on a range of fronts.”
Harper and Enthalpy general manager project services, Evan Karjalainen, sat down with InvestMETS.com to talk through some of the key areas where they are seeing opportunities for improvement.
Project planning and execution
Not surprisingly, they say it all starts with project execution readiness.
“I think most people understand operational readiness,” says Harper.
“But an area that can let the whole cycle down is project execution readiness.
“In your studies you have a forward plan, which is what you’re going to do in the next phase of work. You make sure you’ve got the budget and the resources to do that next phase of work where you might be going, for example, from a prefeasibility study to a feasibility study.
“The project execution plan is how you’re actually going to execute the project.
“What we see is a tendency to leave the project execution plan to the end of each study and not resource that properly, which can obviously impact the quality of a project execution plan.
“The other area where we see an opportunity for improvement is, right at the front end, making sure that you’re bringing in the people who are going to execute the project to oversee that transition from the study into execution. Too many project owners – and we’re not just talking about small companies here – do not allow enough time to get people ready to execute the project.
“So we see instances of project blowouts where we had a robust study and even a solid execution plan.
“It often can be traced back to systems and people.”
According to Karjalainen, the reopening of borders has done little to alleviate pressures from a “hot labour market” in mining and resources generally, but especially in the project planning and execution areas. He and Harper say the industry has seen an exodus of experienced people – for retirement and other reasons – while well-publicised mining-sector challenges with recruitment and retention of professionals, including engineers, geoscientists and increasingly IT specialists, can have acute ramifications for non-operational activities.
Karjalainen says technology has a part to play in alleviating human resource strains, as demonstrated during the COVID pandemic when remote work was enabled by available – and then improved – information technology.
He says sensors, cloud computing and intuitive software are improving productivity in areas such as job progress monitoring and reporting. The technology is also enabling some traditional site-based activity to be done remotely.
“I think with construction projects there’s always going to be an emphasis on people on site,” Karjalainen says.
“However, we’re seeing progressive automation of project controls and progress monitoring in some areas. We’re seeing an improved level of reporting accuracy and more insights gained by project management groups.
“Where we’re seeing strains and struggles in terms of maintaining resources on site I think we’re seeing people wanting to become more responsive and reactive to performance issues, and technology can certainly play more of a role there.”
A challenge now is finding an optimum balance between effective new and proven ways of working.
“There is this perspective now that every job can be done from home but clearly that is not the case,” Karjalainen says.
“I, and I’m sure many others, have had discussions with job candidates for site roles where they say they’re used to working from home now and even performing the site role remotely and wanting to continue working that way in the new job.
“There’s this expectation, rightly or wrongly, that the world’s moved towards a flexible working arrangement, where it’s really up to the employee on whether they want to come in or not, and I think that needs to change.
“It shouldn’t just be one way or the other – how we are going to manage remote working needs to be a topic on the table from the outset. It should be conversation where you say, for the betterment of the business or the project or whatever the case may be, this is when we’re going to have flexible working and this is when we’re not.
“Managers need to be aware of having the conversation as part of a standard planning process. Get it out in the open and have the conversation.”
Harper is not alone among advisory business CEOs in overseeing a widely-distributed, “virtual” workforce. He says mining and other company bosses have unanswered questions about the value of remote work, but says how value is measured can be key.
“One of the big challenges in managing a remote workforce is obviously keeping them productive,” Karjalainen says, using project management services as a prime example.
“Where the value of a business or a project team is measured based on billable hours or hours logged it’s difficult to measure that because you can’t see them.
“But if you value deliverables, then it doesn’t matter.
“If you do a good deliverable within four days instead of five days, should you get paid for five? Absolutely.
“I think as long as you’re very, very clear with your remote workers about what the expectations are in terms of the deliverables, it doesn’t really matter if they do 40 hours a week or 35.
“Working from home is all about how you set performance measures.”
Codes and capital
While he’s been neck-deep in project studies and reviews, Harper has also continued to be an important voice in the development of mining’s updated reporting codes and study process guidelines. He sees the work as crucial in an era which is expected to see ESG-related “modifiers” impact resource and reserve reporting, and increasingly project values and funding.
“I hear people in the industry say, we don’t want all that bureaucracy,” he says.
“We don’t want to spend money on this now to potentially save money in future.
“My view is, like nearly everything connected to financing and building a mine, it comes down to time value.
“If you can execute your studies in a more efficient way, follow a governance process and have a reduced amount of rework, you’ll save money.
“And obviously the quality of the product at the end of the day will be of a high quality and therefore be more cost-effective at the end of the process.
“Efficient project delivery means saving money in that process and then getting a faster, better return on the project capital expended.
“These codes and [guidelines] create transparency not only externally – out to the community – but also internally.
“The project developers and investors get a much clearer view of where and how value is being delivered and also where the risks are in relation to that value.”