Risk Management is a technique that identifies, assesses, plans for and controls risks. However on mining and engineering projects the risk management framework needs to play a more prominent role earlier in the life cycle.

The following lifecycle represents how some companies in the mining and engineering industries are implanting their risk management strategy:
· Pre-Feasibility – Limited focus is spend on a risk management framework
· Feasibility – Inadequate focus spend on a risk management framework
· Pre- Detailed Design – Still inadequate focus spend on a risk management framework
· Detailed Design – Creation of risk management frameworks in silos
· Procurement – Creating an integration risk management framework using bottom-up approach
· Construction – Implementation risk management frameworks due to complexity on a tactical level
· Commissioning – Perform risk analysis, risk assessment and risk reporting with limited strategic value

“We understand risk management encompasses the identification and assessment of threats, definition of probabilities and impacts, and the preparation and implementation of risk avoidance and contingency plans,” says UMT Consulting CEO Pieter Meyer.

“Our unique methodology ensures we implement controls, responsibilities and monitoring mechanisms to ensure effectiveness. To realise the benefits of risk management earlier in the lifecycle, we suggest that risk management be implemented in a project management controls environment which would assist with project management control reporting and budget metrics.”

From pre-initiation to commissioning, UMT Consulting’s IRM will assist clients to minimise project risks by conducting:
· Risk assessments e.g. procurement: scheduling delays, logistics, foreign exchange rates for imported goods etc.
· Analyse the assessed risks in terms of the impact and likelihood on the project
· Establishing controls and treatment plans to manage the identified risk
· Monitor and reporting on the status of these risks

Misconceptions of risk management, especially in the mining and engineering industries, are that it polices and sometime hinders the fluid established processes. However, risk management’s pure function is to reduce the risk exposure of the projects within the organisation and as a consequence, improves the overall health of any project.

A new BASF online tool, the so-called Ecovio® Eco-Efficiency Compass (E³C), will make this decision much
easier in the future. The software compiles all of the relevant data for the production and disposal of selected products – the findings of many exhaustive Eco-Efficiency Analyses – in a single user-friendly interface. Various parameters that are crucial for the ecological evaluation of a given product can be quickly checked, revealing their impact on the product’s eco-efficiency right away. The uncomplicated comparison of the ecological footprint of various approaches allows the user to quickly ascertain whether, in the final analysis, a biodegradable plastic is actually more environmentally friendly.

Biodegradable is not necessarily eco-efficient
It has been more than ten years since biodegradable plastics have entered the awareness of consumers and the industry, and they continue to enjoy a growing interest on the part of the market and the public at large. A number of BASF products have contributed to this development, too. Ecovio® F Film is commonly found in compostable shopping bags. At the end of 2009, BASF’s Ecovio product line was expanded by two new types, namely, Ecovio FS Paper, which is suitable for the production of coated paper cups and cardboard boxes, and Ecovio FS Shrink Film, which was developed explicitly with an eye towards the manufacture of shrink films.

Biodegradable plastics, however, do not automatically solve environmental problems simply because they can be composted. Their use only makes sense if they are more sustainable than nonbiodegradable materials at a performance level that is the same or even better. The biodegradability is supposed to create added value,
for instance, by allowing organic waste to be composted rather than incinerated. After all, organic waste consists primarily of water, which makes thermal utilization very inefficient. In contrast, if the film can be
composted along with its contents, this can have a positive effect on the environment.

Comprehensive life cycle assessments like the Eco-Efficiency Analysis developed by BASF have already been helping people for many years to make the right choice among different product and process alternatives. Towards this end, such analyses thoroughly and quantitatively investigate and evaluate the consumption of resources,
the environmental impact and the economic effects during the production, use and end-of-life phases of a material in a given application.

However, all of this makes these studies complex: a comprehensive Eco-Efficiency Analysis has to be performed by LCA experts and takes several months. Such individual studies do not lend themselves to being combined and specific scenarios must be prepared separately. This again affords the experts’ support. Thus it is not possible to make flexible and quick decisions from among several material alternatives.

User interface with clear layout
This is where the new Eco-Efficiency Compass springs into action. A web-based interface with an input mask is provided so that users can combine numerous parameters with each other that are of relevance for the ecological profile of their envisaged product such as, for instance, a shopping bag. These parameters include not only the selection of the packaging material – if necessary all the way down to the monomer level – but also the weight of the bag and the type of disposal technology.

Thus, the entire life cycle of the product is depicted, from the selection of the raw material all the way to disposal.
The software bases its calculations on several Eco-Efficiency Analyses and control parameters describing materials, applications and disposal scenarios. For the sake of clarity, however, they stay in the ackground. Moreover, some of the variables have been pre-set to ppropriate values.

Experience has shown, for example, that, when een over the entire life cycle of the product, the energy consumption
during the production of the film only has a relatively small impact on the eco-efficiency of a film bag.
Simple presentation of complex systems Users first receive the analysis results in the form of a radar and
portfolio diagram that clearly and logically shows the eco-efficiency of the approaches being compared. This already shows where a product variant has advantages or disadvantages, for example, in terms of its consumption of resources or its emissions.

If so desired, users can receive assistance from BASF experts who will provide them with individual diagrams showing valid and reproducible estimates of the energy and material streams involved in the production, transportation, use and final disposal. The environmentally relevant effects of the material selection and naturally also the costs of
the chosen approach are provided.

Example – shopping bag with double benefit
The calculational comparison between a shopping bag made of paper and one made of Ecovio, both of which offer double benefit since they can be used for shopping and for biowaste disposal, shows: under the boundaries chosen the Ecovio bag is more eco-efficient than the paper bag, because the latter has to be considerably thicker in order to
perform equally well. Generally speaking, this parameter plays a crucial role. Together with trained BASF employees, users can experiment with these parameters.

Expandable concept
At the present time, the new Ecovio Eco-Efficiency Compass is still tailor-made for estimating the eco-efficiency of shopping bags and foam trays of the type found everywhere in the retail sector. Other product groups, however, can be added. Major developments on the market can be promptly incorporated; an example of this is polyethylene made
of “bio-ethanol”.

At the moment, experts are implementing models for paper coatings as well as for shrink films. These will help BASF customers to ascertain the eco-efficiency of paper cups and beverage packaging – and also to ensure that, in these sectors, biodegradable plastics are only employed where they are indeed more sustainable while performing at least
equally well.

The Company’s CEO Pieter Meyer says quality within mining and engineering projects has become an absolute necessity. “The majority of mines do not even attempt a project if conformity to ISO 9001 is not assured. It has become essential that the project’s Quality Management System aligns and integrates with the mining and engineering organisations’ existing Quality Management System.”

Meyer and two of his mining IPMCO subject matter experts, Chris Barnard and Johan Simons, say the true measurement of quality is based on ‘exceeding the expectations’ of the customer. “This applies to internal and external customers and each staff member with whom we deal during the course of our work.”

In order to achieve this, UMT Consulting SA needs to accept responsibility for the quality and control of its processes, products and services; actively exceed the quality and controls requirements of its clients; continuously strive to improve its knowledge and quality and controls processes; and actively participate in the maintenance and controls of a Quality Management System.

It believes that an IPMCO in the mining and engineering, with an integrated project Quality Management System, is the only answer to ensuring project delivery success. UMT Consulting SA uses a unique approach in the implementation of project Quality Management Systems to align it with the business Quality Management systems.

“During this approach, we make use of business analysis, process mapping and procedures with supporting templates and registers for the project Quality Management System. These processes are simulated to confirm effectiveness on large mining and engineering projects. This integrated project and business Quality Management System produces trusted dashboard reports for any organisation to make pro-active decisions,” says Meyer.

Advantages of a project Quality Management System in a project include:
• Being pro-active in the elimination of potential non-conformities
• The project is under control from the pre-feasibility stage
• Pre-manufacturing is under control and vendors are properly and sufficiently guided
• Construction happens within a controlled environment
• Smooth hand-over of the project to the client
• Solid operational footprint for future projects

“From our experience the disadvantages of not having a project Quality Management System within a Project are uncontrolled project, financial losses due to non-conformities and re-manufacturing or constructing, high liabilities during and after the project, jeopardising legal compliance, and poor market reputation for contracting companies which can put future business at risk,” he adds.

Meyer, Chris Barnard and Johan Simons stress that mining and engineering companies need to ensure solid control by integrating their project and business Quality Management Systems.

“The problem most companies face is that they control projects using two separate systems which leads to rework, wasting of manpower, miss-alignment and unexpected spend on external audits due to none conformances. They need to be more proactive than reactive to combat the current economy pressures,” they conclude.

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With budget cuts across the industry, mining companies need to find ways to streamline their projects with the few resources they have to their disposal. Unfortunately, the scarcity of engineers makes this even more challenging.

An IPMCO has been identified as one of the several workable solutions to making better use of existing resources, by getting work to flow horizontally as well as vertically within a company. It is a single communication portal with key information for an entire organisation to understand the strategic context, project focus, individual project health and progress made on the project within portfolios.

IPMO is a business solution that brings together all the elements of typical projects including project communication; project progress and overall tracking. It also provides strategic planning; tactical operational decision-making; document management; cost monitoring and tracking; scope management; risk management and mitigation; issue management and workflow; resource capacity management; and detailed project reporting.

UMT Consulting CEO Pieter Meyer and two of his mining IPMCO subject matter experts, Peter Gerber and Leon de Kock stress that without an IPMCO business solution, projects are rarely completed on time and within acceptable cost – this is especially true of large projects.

“Improving delivery and reducing spend, especially during the current competitive business climate, can be determined by an organisation’s ability to efficiently align resources and business activities with strategic objectives and could mean the difference between success and failure,” they explain.

They say IPMCOs can save organisations money by enabling better resource management and reduce project failures. “They can either outsource the IPMCO, or part thereof, or manage it in-house. The benefit of keeping it in-house is that one has full control over the project and the budget. However, managing it in-house means one is dependent on limited skills.”

There are two basic models of IPMCO business solutions, one that acts in as a outsource model by providing consulting services to assist mining and engineering companies to build capacity, build the IPMCO, providing internal project manager, assist with training, mentorship and skills transfers, provide strategic project guidance by using best practices.

Meyer says the advantage of this model is to assist companies to build their own excellence and capacity in the IPMCO space. “The other model is to outsource all work to an Engineering Procurement Consult and Management (EPCM) company. This means the EPCM will retain control of delivery and at the same time, build capacity and skills for within the EPCM future projects. This model does suit some mining organisation because their strategy in not necessary to build capacity but to get the job done through contractor management.”

Furthermore, Earned Value Management is a proven systematic approach to objectively measure project progress and performance measurement, whilst integrating technical scope, schedule, cost and risk. It forms a crucial part of Project, Programme and Portfolio Management when establishing the true status of a project and can be applied to any Life Cycle of a project, to any phase of a project, or, as soon as a scope, budget, schedule and the appropriate milestones have been agreed upon. It is also internationally recommended as a best practice in the latest Project Management Body of Knowledge (PMBOK) including engineering and construction best practices.

Ideally, the IPMCO should be the focal point for project management improvement and enhancement. This mission is met by establishing best practices and by providing training in all project management knowledge areas. It becomes the responsibility of the IPMCO to focus on areas such as development of lessons learned and standardised methodologies.

UMT Consulting SA focuses on ”Project Intelligence” by collecting and consolidating relevant data and enabling processes to support management with their decision-making process through dashboard reports, practical day to day collaboration, workflow management and linking project and portfolio management to strategic business value.

Project Intelligence assists executives, middle management and programme managers to consolidate initiatives to make sound business decisions that will save money and deliver maximum value to ensure sustainability.

One of the more visible functions of an IPMCO is developing, recording, compiling, and disseminating the best practices in project management. This repository of information will be continuously evolving. The IPMCO will maintain project archives containing data on project life-cycle performance and project scope, cost, and schedule.

De Kock says companies need to ensure solid financial control. “The problem most companies face is that they control projects on cash flow rather than on cost flow. By controlling projects on cost flow allows them to be proactive rather than reactive.”

“On these facets of the project, data will highlight the original value, modifications, and the final value. Additionally, lists of issues and problems of previous projects will be available to all new projects. Thus, successive projects are able to build upon the lessons learned of previous projects,” he concludes.

UMT SA has proven successes with IPMCO at various mines across South Africa including Grootegeluk.

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Barnstone’s  All-in-one SAP solution for SMEs in mining  combines SAP software, SAP best practises and Barnstone’s services.

“The solution is ideal for someone starting or growing a mining venture,” says Conrad Steyn, Barnstone’s co-founder. “A new business owner should not have to spend time on laborious administrative tasks, but rather focus on the mining itself.”

The pre-defined aspect of this software includes business blueprints, configuration options, testing capabilities, training material, end-user instruction and come with pre-loaded data.

“It is not uncommon for enterprise resource planning (ERP) systems to come pre-configured, but it is rare that they are pre-populated with key data,” says Steyn. “With this solution, vendor contact details, service supplier data, and other relevant information are all available.”

The solution contains guidelines on mining-specific processes, principles, and best-practises that have been collated by veterans in the industry.

Furthermore, accounting is set up to be relevant to mining and reporting systems are configured according to the Department of Minerals and Energy requirements.

“Using an ERP that carries a big name like SAP is significant if the organisation plans on being listed,” says Steyn. “When investors enquire as to what processes have been put in place, a brand like SAP gives you much more credibility than an unknown ERP system or ad-hoc spreadsheets.”

A definitive feature of this SAP solution is its ability to replicate or grow when required. Any customisations, to the system can easily be reproduced in the case of another mine being purchased. “The processes become formalised and do not have to be set up from scratch. This is extremely useful when it is the aim of the mine owner is to possess more than one mine over time,” says Steyn.

Having a pre-defined and pre-loaded ERP system will definitely gain popularity in the future, as organisations increasingly look for ways to save time, cut costs and reduce risks.

“Purchasing ERP systems that come pre-populated with industry-specific information is set to become a trend, especially among SMEs,” Steyn concludes.

“Electricity powers mining equipment and the transportation of personnel and materials,” explains Frost & Sullivan metals & mining anlyst Wonder Nyanjowa. “It is also used to pump underground water as well as to provide ventilation and refrigeration in mines.”

Curtailing electricity consumption in the South African mining industry to 95% of normal consumption, combined with other operational problems, has reduced capacity in the mines to approximately 90%. Mineral production has declined whilst the health and safety of employees has been endangered.

To offer decision makers a perspective on the overall impact of the electricity supply crisis on South Africa’s mining industry, Frost & Sullivan will be hosting an online analyst briefing on Thursday 25 March 2010 at 2:00pm GMT/ 4:00pm CAT.

The discussion will benefit equipment manufacturers, industry executives, policy makers, and the investment services industry.

To participate in this briefing, please email Patrick Cairns at patrick.cairns@frost.com with the following information: your full name, company name, title, telephone number, e-mail, address, company website and country. Upon
receipt of the above information, a registration link will be e-mailed to you. You may also register to receive a recorded version of the briefing at anytime by submitting the aforementioned contact details.

The risks involved in IT governance have become significant considering that IT systems have become integral to a company’s strategy and business. The report suggests that a company’s management, or even the board, should be directly involved in IT governance, risk and compliance.

SAP BusinessObjects helps ensure that corporate strategies reflect today’s business risks and opportunities and that the proper controls are in place to mitigate and manage risk, support regulatory compliance, and execute strategic goals. The applications help unify and align risk and compliance management processes under a single enterprise framework, across business units, regardless of whether the solutions are supporting IT, audit, financial, or trade processes.

Van der Watt says the first step toward gaining strategic alignment is ensuring that the information you have is accurate and that IT and management believe that to be the case. “You need a single, trusted environment for the collection, movement, and distribution of data. Most organisations have a variety of data locked in various internal silos but also rely on key data that exists outside the organisation’s walls. You must establish a unified, certified view across these disparate sources to enable confident, quality decisions.”

“Not only does your company need to run its business effectively and efficiently, but you are also held accountable for the way you run your business. Main barriers preventing companies from optimising business performance include ambiguity between strategy and execution, lack of balance between risk and opportunity, and lack of visibility throughout the entire business cycle,” he explains.

The SAP BusinessObjects portfolio helps organisations optimise business performance by enabling them to connect strategy to execution and achieve strategic alignment, predictable performance and make confident decisions. It provides a holistic approach that brings together solutions for optimising business performance including business intelligence (BI); information management (IM); enterprise performance management (EPM); and governance, risk, and compliance (GRC).

The broad family of tools and applications helps teams optimise performance by enabling strategic alignment, predictable performance, and confident decisions. The solutions support the establishment of trusted information, the ability to proactively manage risk, and the creation of enterprise visibility, regardless of the underlying applications or data stores. SAP BusinessObjects solutions work together to help balance risk and opportunity as well as provide strategic alignment.

All categories of SAP BusinessObjects solutions work with enterprise resource planning software from both SAP and other vendors. With the SAP BusinessObjects solutions, companies can maximise strategic and operational performance by cost effectively managing regulations and policy compliance while proactively mitigating business risk.

The solutions support data integration, data quality management, metadata management, and master data management. With SAP BusinessObjects, customers have an integrated data integration and data quality management solution with one interface, one administration console, and one source of metadata. To help ensure that one has trusted information, SAP BusinessObjects solutions provides access to a variety of data sources, integrates and consolidates ones data, and cleans and improves ones data. Customers can reconcile and harmonise data from different systems, as well as understand where their data originates.

He says this approach helps ensure that companies are not exposed to unnecessary risks or control failures. “These solutions can support multivendor systems across enterprises and support a unified governance, risk, and compliance approach. SAP BusinessObjects solutions help ensure that corporate strategies reflect today’s business risks and opportunities and that the proper controls are in place to mitigate and manage risk, support regulatory compliance, and execute strategic goals.”

“The applications help unify and align risk and compliance management processes under a single enterprise framework, across business units, regardless of whether the solutions are supporting IT, audit, financial, or trade processes,” he concludes.

Launched at the Council for Scientific and Industrial Research in Pretoria on 1 March 2010, the Technology Localisation Programme of the Department of Science and Technology (DST) supports the Government’s Competitive Supplier Development Programme (CSDP), which is aimed at increasing the competitiveness of local suppliers through a range of demand and supply-side measures. This will assist local companies to leverage procurement opportunities from government’s large-scale infrastructure recapitalisation programme over the next 20 years.

The DST Technology Localisation Programme also supports other high-level government initiatives such as the Industrial Policy Action Programme (IPAP) that are set to help South Africa reduce its trade deficit while improving its long-term manufacturing capacity – a significant step towards scaling up efforts to promote long-term industrialisation and industrial
diversification beyond the current reliance on traditional commodities and non-tradable services.

It is important for local foundries to be globally competitive as they form the backbone upon which the country’s supply chains can be further developed for big infrastructure programmes, such as those of Eskom and Transnet, to support and drive localisation.

The Programme began with the identification of components for localisation in Eskom and Transnet’s CSDPs, and benchmarking of foundries with the technology to manufacture these components. Technology gaps were identified and Technology Assistance Packages developed to support localisation in the foundry industry.

Through this initiative, the foundries will be able to access expertise from DST activities in Advanced Manufacturing and Light Metals. The DST is working in partnership with the Departments of Trade and Industry, and Public Enterprises, the industry, and development agencies such as the United Nations Industrial Development Organization (UNIDO), to drive localisation in the country.

The hosted delivery model is available from SAP partners like SCT Services that participate in the SAP BAiO fast-start program and who are certified by SAP to provide application management and hosting services for SAP BAiO solutions. The subscription-based hosted delivery model for SAP BAiO solutions is available immediately on a two, three or four-year basis.

The addition of a subscription-based hosting option to the SAP BAiO product portfolio provides customers with even more choices to find the right solutions for their individual business needs and preferences.

Van der Watt recognises that one size and one delivery model does not fit all. “We understand the current economic situation in which many of its midsize customers struggle to get much needed investment capital to contest in a highly competitive market place. To this end, we have expanded our SAP product range offering by adding Subscription-based Hosting of SAP to our portfolio. It gives our prospects and customers another very sound option to consider when deciding on the method of acquiring SAP.”

He says the market is ready for subscription-based hosting. “A growing number of prospects and customers have already approached us for a hosted option. In our view, this hosted SAP model provides a fantastic opportunity for businesses that need to replace their business systems. The key benefit is that cash outflow on this investment is driven from the OPEX line and not the CAPEX line. This is perfect for growing businesses that need proper systems to control growth, stay on top of change and who prefer to rent rather than buy SAP ERP software.”

SAP South Africa SME partner and solutions head Luciano Ravenna says SAP is excited to be working with SCT Services. “They are providing in-depth market knowledge that will help to make this expansion of the Fast-Start Program a success to the benefit of our joint customers. With the subscription-based hosted delivery model, we further increase the value of our entire solution portfolio for the small and midsize enterprise by not only providing options in functionality, operating system and databases, but also in deployment and licensing.”

Due to the success of hosting offerings for SAP BAiO in general, the subscription-based hosting option for the SAP BAiO offered by SAP gives customers the powerful functionality of flagship enterprise resource planning (ERP) software, SAP ERP; industry-specific SAP Best Practices packages; the SAP MaxDB database; standard SAP Enterprise Support services; and application hosting, management and maintenance.

In addition, customers can optionally choose customer relationship management (CRM) for SAP BAiO and payroll processing software from SAP. Customers have the complete flexibility to configure their solutions to fit their business needs and have the choice to move in time to a standard on-premise deployment model.

Customers who want to empower users to make effective, informed decisions based on solid data and analysis can choose SAP BusinessObjects business intelligence (BI) solutions as well. With BI all users, from the high-end analyst to the casual business user, have access to the information they need – with minimal dependence on IT resources and developers.

Customers interested in buying SAP BAiO licenses can evaluate the solution and receive cost estimates through the innovative solution configurator for SAP BAiO solutions —an online tool for midsize companies to easily configure SAP BAiO solutions targeted to their particular needs. In addition to evaluating an ERP solution, the solution configurator can configure CRM functionality.

In four easy steps, a company can input its industry-specific ERP and CRM needs, resulting in a solution blueprint and cost estimate that includes costs for software licenses, implementation services and hardware components optimized to run SAP BAiO. SAP partners that participate in the fast-start program can take part by offering their own solution configurator to showcase their best practices-based SAP solutions.

For more information please visit www.mysct.com

At this laboratory refractories and ceramics can be tested and characterised to international standards. The CSIR and Cermalab each ran independent laboratories of this nature for many years and decided to join forces, obtain international accreditation and pool their resources.

“There are now a great many opportunities opening up for this kind of laboratory. For instance, the emerging national strategy in the nuclear energy arena creates possible applications for a high-temperature materials laboratory, while its ability to be used in tertiary education and research is also opening doors. Of course, its current use for the testing and characterisation of refractories used in the primary aluminium production industry, ceramics and heavy clays will continue and most likely even expand,” says Dr Willie du Preez, manager of metals and metals processes research at the CSIR.

According to Bruce Berger, operations manager of Cermalab, the fact that this laboratory has achieved international accreditation means that local companies that currently send their refractories overseas for testing would no longer have to do so. “We can do all the tests and development work needed locally, which will bring down costs considerably,”he says.

Background
The CSIR’s high-temperature materials laboratory was established in October 2005 due to a need expressed by BHP Billiton Aluminium. This company became the CSIR’s primary client for the testing and characterisation of refractory materials used in the primary aluminium production process. The company also assisted the CSIR in obtaining the relevant laboratory equipment from a redundant facility in Europe.

Cermalab has been operating as a private laboratory since 2002, its focus being on the testing and characterisation of ceramics, heavy clays, refractories and other materials. It also provides certified training courses in the field.

“These two were the only laboratories of their kind in South Africa. The constraints and challenges in terms of sustainability placed on them by the limited local market gave us reason to explore the option of collaboration. This happened in 2008, with the two laboratories starting to operate jointly in April last year,” explains Du Preez. “We have now had a number of months to work together and the progress made supports the intent to continue to do so. This formal collaboration agreement is aimed at strengthening our future together.”

Says Berger: “The collaboration agreement gives us more credibility, especially as the laboratory achieved ISO/IEC 17025:2005 accreditation in November 2008.”

The South African National Accreditation System (SANAS) accreditation was obtained for compliance with the requirements for the competence of testing and calibration laboratories. It is also the accreditation standard mainly used in Europe.

Going forward
The collaboration will be managed by a CSIR-Cermalab steering committee, consisting of two representatives from each entity. Cermalab is responsible for the operational management of the laboratory and it will be marketed under the Cermalab brand. The laboratory is housed on the CSIR¿s Scientia campus in Pretoria.

The collaboration agreement will be reviewed in April 2010 to decide whether or not it should be strengthened, “says Du Preez. “I am positive about the future of the laboratory and the collaboration with Cermalab. Together we have more muscle to serve the needs of our pooled clients,” he concludes.