In today’s world of constrained capital, clients in the mining sector are seeking ways to maximise returns while minimising exposure to risk, particularly those companies who need to make strategic decisions on potential investments, says Denver Dreyer, CEO of WorleyParsons. “Front end services are critical in a cash-constrained environment. Through our global advisory and technical consulting arm – Advisian – we have introduced innovative optimisation tools to help our clients identify opportunities upfront and create value across every phase of a project so that when the project is ready to go into execution, it has the highest probability of success,” says Dreyer.
Advisian’s Regional Executive Manager for Sub-Saharan Africa, Adam Boughton, says that Advisian’s optimisation tools help to address the modern day challenges that mining companies are facing and offer real solutions to real problems. “We draw on our deep domain expertise and experience in the mining sector to advise our clients and then can partner with them to implement that advice. Our solutions and tools are centred on creating assets, improving asset efficiency and sustainability, and optimising asset portfolios. When used together, these tools go beyond optimisation – we can identify risks and mitigate them, as well as identify opportunities across the full business value chain. This combination of multiple techniques has improved our capability to help our clients to reinvigorate stalled projects and currently unprofitable operations,” says Boughton.
Boughton says that forecasting risks and returns needs to be evaluated in a clear model. To this end, Advisian uses a unique financial and technical process model called StepWise. This provides the best possible technical alternatives for a project in a quick and cost-effective way, so that clients can make the right investment decisions. It is a low-cost approach that provides a sales case based on the client’s desired business outcomes (or metrics for success) and identifies risks and opportunities early on in the process.
Steve Burks, Principal – Operational Improvement Advisory for Advisian, explains that operational improvement increases net cash flow by increasing revenue while simultaneously reducing costs. “Our objective is to implement recommendations and embed them into the culture of the operating company so that it steadily improves cash flow during the entire life of the planned operation,” says Burks. Advisian recently entered into a regional framework agreement with Whittle Consulting (Africa) to enhance and extend its optimisation capability. This focuses on early cash flow to achieve significant improvements in NPV. Advisian links this technique with nine other business improvement mechanisms and identifies the most beneficial mix of technical, project delivery, and conventional management consulting processes.
Advisian has also entered into a regional framework agreement with Ensight Energy which will enable its clients to implement energy optimisation initiatives and realise immediate benefits in the short term. The initial assessment and energy efficiency initiatives will improve cash flows steadily through the entire life of the planned operation. “Ensight Energy has deep domain experience in solving energy challenges. The combination of Advisian’s heat recovery expertise and global EPCM capabilities through the WorleyParsons group, together with Ensight Energy’s unique approach to energy optimisation and track record in energy cost savings, provides our clients with a comprehensive suite of energy optimisation solutions covering every aspect of their operations,” says Boughton. “Mining companies and investors need energy surety in order for new projects to be successful. The Advisian/Ensight joint energy optimisation solutions will provide unparalleled capabilities for businesses that have energy challenges,” he adds.
An additional service offered by Advisian is the provision of comprehensive services to support corporate and project development transactions leveraging the company’s due diligence processes and capability within the structure and requirements of each different transaction type across all sectors including minerals and metals.
“We support corporate development (‘inorganic’ growth transactions) by providing technical and environmental due diligence for mergers and acquisitions with buy-side target due diligence, and Divestitures with sell-side vendor due diligence,” explains Boughton.
“We also support project development (‘organic’ growth transactions) by acting as lenders’ independent technical and environmental advisor for non-recourse project finance, export credit agency (ECA) finance and structured trade commodity finance.
“Our approach is to focus on providing independent assurance by rigorous analysis of the available documents and material issues associated with the investment. Our key deliverable is a succinct report with a focus on the material issues which present residual risks.”
“These specialist services offered by Advisian allows WorleyParsons (as a group) to partner with our clients right from the start of a project, ensure that a project is financially viable, identify opportunities upfront and develop optimised strategic plans,” says Dreyer. “We can gain a thorough understanding of our clients’ challenges from the onset, help find solutions to complex problems and then take the project from idea phase to execution phase. With Advisian spearheading the study phase, WorleyParsons can take the project across all the phases of the asset lifecycle with the maximum probability of success.”