This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Mining And Metals Companies Could Save Billions On Capital Projects, Accenture Research Finds

Faced with delays and budget overruns – which can add billions to total project costs – mining and metals companies could significantly reduce the cost of large capital projects by improving planning and addressing workforce shortages, according to Accenture (NYSE: ACN) research on capital projects delivery in the mining and metals industries.

The research was based on 31 interviews with mining and metals executives with responsibility for capital projects around the world. Less than a third (30 percent) of the respondents report staying within 25 percent of approved budgets for all projects, and less than a fifth (17 percent) said they completed all projects within a 10 percent budget range.

The tremendous scale and complexity of mining projects – which are often multi-billion dollar investments – mean that budget overruns and delays in completion are not unusual. Among the contributing factors are infrastructure needs such as roads, ports and electrical power in less developed regions; the lack of talent and skilled workforces; and environmental and regulatory requirements in developed regions. When asked what typically causes delays in project schedules, survey respondents cited the availability of talent (57%), new or unconsidered regulatory requirements (45%) and insufficient detail during the planning stage (42%). Metals companies tend to have fewer delays and smaller budget overruns due to the reduced size and complexity of plants as opposed to mining projects.

Accenture research estimates that metals and mining expenditures for capital projects will reach more than U.S. $140 billion in 2012 1, and between U.S. $1 trillion and U.S. $1.5 trillion during the period from 2011 to 2025 2. Even with the current downturn in commodity prices, long-term demand for minerals and metals, driven by economic growth and social development throughout the world, continues to spur investment in mining and metals. With $100 - $200 billion in annual spend, the impact of project delivery overruns on individual companies and the industry as a whole is enormous.

“The potential savings and returns through effective management and delivery of a capital project investment can be huge,” said Jose J. Suarez, managing director for Accenture’s North American Mining industry group and the research lead. “Keeping on budget and within planned timelines across a portfolio of multi-year projects can save millions for a company – in today’s environment strong project management can be an important competitive advantage.”

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs