Normally at the start of a mining study, the team members receive a matrix of responsibilities. This table shows which people or groups are responsible for 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 are their deliverables to be structured?
Sometimes the WBS is forgotten
What often gets forgotten in 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 both should always be provided.
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. A WBS can also be used for the operating cost estimate.
The WBS can provide the following information to the team:
It assigns the costing responsibility to specific people or group so each know what must be delivered.
It provides a consistent format for developing and reporting the capital costs (and operating costs).
It helps ensure that no cost components get omitted and no costs get double counted.
It provides the cashflow modeler with a clean format to import the capital cost into the cashflow model.
Any study will benefit from a WBS
Typically a WBS is developed for pre-feasibility and feasibility studies but is often ignored at the PEA stage. Some feel it is too detailed for that level of study. I don’t feel this is the case. The WBS is a communication tool to confirm responsibilities. Thus even a simplified WBS is still useful at the PEA stage.
I ave seen some instances where a WBS has been created but does not get wide distribution to the entire team. The WBS should be provided to everyone and ideally a team session be held to walk through the WBS structure. The idea is not make everyone a costing expert, but rather to ensure all understand how the project cost estimate will be structured.