What is Required for a Low-Cost Project Outcome?

During the 1980s and early 1990s low cost gold treatment plants were at the forefront of the Australian engineering and mineral processing business. This opportunity was the result of a high gold price and innovative design by emerging engineering companies in an expanding market. The low cost approach to gold plant design and project execution resulted in smaller and shorter life projects becoming viable and the multiplicity and fast track approach of the projects resulted in sharp learning curves. From the mid 1990s to the early 2000s the relatively low commodity prices and resultant reduction in minerals opportunities also resulted in innovative design in both small and large plants, albeit on a reduced scale. The innovation was associated with alleviating capital cost pressures for large capacity low-grade (eg NewcrestÆs Cadia) or small-scale (eg JubileeÆs Cosmos) projects to either improve NPV or to enable the project to be won and profitable in the competitive lump sum environment. Between 2004 and 2008 the engineering market became less competitive from an engineerÆs perspective due to the high demand for engineering services in a high price commodity market. The need for innovation remained but was driven overtly by shortages in water, power and personnel and long equipment lead times. This paper discusses some of the factors that contribute to the capital cost of a project and the scope for improving the likelihood of financing and increasing the project net present value (NPV). Case studies with recent large copper concentrator projects will be used to demonstrate how a value driven approach to project and plant layout can result in significant improvement in NPV.