Typically at the start of many mining studies, the team members receive a matrix of responsibilities.  This table shows which people or groups are responsible for the different aspects of the study, i.e. who is responsible for geology, for mine design, for process design, infrastructure, etc.  This is great tool and a necessity in making sure that everyone knows what they are supposed to do.  However it doesn’t really tell them “how” they need to do it.  How is their deliverable to be structured? How is it to be developed?
What often gets forgotten in the early stage studies is providing the team members a Work Breakdown Structure (“WBS”).   I consider the WBS an equally important component as the responsibility matrix and the two should always be provided together.
The WBS is a hierarchical breakdown of the project into phases, deliverables, and work packages usually associated with cost estimation. It is a tree based structure, developed by starting with the final objective and then dividing that into manageable components based on size, duration, and responsibility.  Typically this is done for the capital cost estimate, breaking it down into individual cost areas and cost components.
The WBS can provide the following information to the team:
  • It assigns the costing responsibility to specific people or group so they know what they must deliver.
  • It provides a consistent format for how to develop and report the capital costs (and operating costs).
  • It helps to ensure that no costs get omitted and that no costs get double counted.
  • It provides the cashflow modeller with a format to help import the total capital cost estimate into the cashflow model.
Typically a WBS is developed for pre-feasibility and feasibility studies but often ignored at the PEA stage, where some feel it is overly detailed for that level of study.  I don’t feel this is the case and even a simplified WBS is valuable at the PEA stage.
In some cases where a WBS is created, it does not get wide distribution to the entire study team.   The WBS should be provided to everyone and ideally a working session be held to walk through the WBS structure with the team.  The idea is not make everyone a costing expert, but to ensure they understand how the project cost estimate will be structured and developed.
My bottom line is that regardless of the level of study, a WBS should always be created.  Some will say the WBS is not required for early stage studies but I have found benefits in having one, at least for the capital cost estimate.   Obviously the level of detail in the WBS should be appropriate to the level of study.  It should not be difficult for your Study Manager to create an appropriate WBS early on and avoid headaches in the later stages when the final study is being assembled.

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