The South African mining sector has evolved in terms of its acceptance of project houses, and both majors and minors have aligned themselves with project management professionals.
 “However, while many have taken the decision to use companies who employ the classical EPCM (engineering, procurement, construction and management) model, there is certainly merit in continuing to use project houses until such time as the mine reaches a steady state,” Hennie Read, chairman and CEO:corporate affairs, at RSV (Read Swatman and Voigt), tells Mining Weekly.

Read explains that the period during the ramp up is a delicate one and until the mine reaches a steady state it can very much be likened to a developing project. “Only when the mine reaches 100% design capacity does it become a routine operation.”

In the increasingly results-oriented mining environment, investors demand reliable financial justifications based on the principles of a corporate financial model. These methods range from simple cost/benefit analysis and return on investment to economic/market value-added approaches.

Read says that although the financial value measurements are fundamentally important, there are intangible elements that can have a significant influence on the real and sustainable value of project management. “More sophisticated measures have been developed that account for these complex intangible variables,” he says.

But, he cautions, even these methods of evaluating project management performance have limitations and fail to take into account the complex web of interrelated factors, relationships and activities which holistically allow one to assess an organisation’s economic performance.

“Most evaluation methodologies when rigidly applied produce good but limited results. A drawback is a requirement for vast amounts of input data, which is not always readily available,” Read says. “Shortcuts are then developed to generate this data with invalid assumptions and the whole process is open to manipulation which essentially invalidates the information.”

Read says the project management maturity model was developed to convince and persuade investors that the outcome could be more predictable. “In essence, this model uses best practice to ensure a greater degree of organisational success at performing project management tasks. This affords a greater level of assurance for investors that their project will achieve the benefits that were the basis for undertaking the project in the first instance.”

Read explains that the higher the level of project management maturity, the better the results on the schedule and the cost performance indices. “In plain English, this is the total authorised project duration or budget versus the final duration or project cost.”

The maturity of the project management system can be determined by measuring whether the effort associated with the improvement in project management is increasing, decreasing or staying the same. “This is a direct indicator of whether the project management culture is filtering through the organisation effectively.”

Read believes companies will have greater faith in a project management model that reduces uncertainty, gives them a better understanding of the nature of the risks involved and suggests methods that will help them to avoid or manage crisis situations.

The secret to successful project management lies in the integration of nine key knowledge areas – integration, scope, time, cost, quality, risk, communication, human resources management and procurement / contract management. However, where management sometimes trips itself up in attempting to cut costs, is to exclude the five ‘softer’ areas and only concentrate on the PCTS elements. Sadly, project management often only becomes a strategic issue when there is a crisis in either the market or internally within the organisation.

“I would suggest the formula for success would be for mining houses to entrust the project management – not just during the planning and commissioning stages, but beyond, to full ramp-up – to service providers who have an appropriate level of project maturity. This will ultimately lead to the overall success of any project,” Read concludes.