Submission 6 Don Scott-Kemmis, Pacific Innovation Major Project Development Assessment Processes Commissioned study

Appendix 3: Resource Project Stages and Equipment and Service Requirements

Developing the Initial Resource Project Maps

These initial maps aim simply to establish a set of reasonably generic project stages from exploration to closure and then to characterise the key activities and inputs at each stage:

1. 
   Exploration
   
2. 
   Project development
   
3. 
   Mining Operations;
   
4. 
   Processing Operations (refining and metallurgy)
   
5. 
   Mine closure.
   

The major stages of offshore oil and gas projects are typically characterised as:

1. 
   Reservoir Information
   
2. 
   Contract Drilling
   
3. 
   Drilling Related Services and Equipment
   
4. 
   Casing and Completion
   
5. 
   Infrastructure and Installation
   
6. 
   Production & Maintenance
   
7. 
   Decommissioning
   
8. 
   Logistical Support
   

A basic classification of mining equipment is in Table A3.1, and services in Table A3.2. :

Table A3.1: Mining Equipment Categories

Stages & Dimensions	Equipment
Exploration	Mapping, Geological & Geotechnical Surveys, Borehole Drilling,
Material Handling	Conveyors, Crushers, Winches, Vehicles, Weighing & Measuring
Surface Mining	Drilling, Electrical & Hydraulic equipment, Shovel Buckets
Underground Mining	Blasting, Drilling, Electrical & Hydraulic equipment., Communication
Health & Safety	Ventilation, Dust control, Waste Management, Safety equipment

Table A3.2: Mining Services Categories

Group 1	Services related to the exploration stage: geotechnical engineering, geo-statistics, geophysics, geology, geochemistry, economic geology and drilling.
Group 2	Services mostly related to the project development stage such as project management, EPCM (engineering, procurement and construction management) services, due diligence and construction management.
Group 3	Services mostly related to the mining stage such as Seismicity, rock mechanics, mining engineering, mine design and blasting).
Group 4	Services most related to the processing stage such as metallurgy, leaching, hydrometallurgy and chemistry.
Group 5	Services mostly related to environmental services and the closure stage such as paste and thickened tailings, remediation, environmental engineering and acid mine drainage.
Group 6	Others relate to no particular stage, such as mechanical engineering, management, maintenance, electrical engineering, data interpretation services, civil engineering and biotechnology.

A similar basic characterisation of inputs for offshore oil and gas projects is at Table A3.3

Table A3.3: Service and Equipment Categories for Offshore Oil and Gas Projects

Offshore Equipment and Services	Services	Equipment
Reservoir Information	Seismic acquisition Seismic processing Reservoir imaging Data management Data integration Geophysical equip
Contract Drilling		Land rigs Jackup rigs Semisubmersible rigs Drillships Tenders/barges Submersible rigs Workover rigs
Drilling Related Services and Equipment	Open hole wireline Mud logging Rental tools Fishing services Underbalanced drilling Solids control Directional drilling	Drill bits Drill pipe Drilling fluids Downhole tools
Casing and Completion	Casing, cementing Cased hole logging Perforating Pressure pumping Intelligent completions	Completion fluids Coiled tubing
Infrastructure and Installation		Engineering/design Offshore fabrication Offshore construction Field processing equip Offshore rig manufacturing
Production & Maintenance	Production logging Well servicing Compression services	Artificial lift Subsea/surface equip Production chemicals
Decommissioning	Seek approval services Clean services Treat/ store hazardous waste Remove offshore (lift) Dispose onshore Site clearance /Monitor residual liabilities

Source: Based on Bain & Company

It is useful to attempt to characterise each stage in terms of the primary engineering, technical and management ‘systems’ that support outcomes and progress. If a generic map can be based on the key systems this will facilitate the later assessment of changing requirements at the system and sub-system level and then the materials, equipment and services within those systems. A basic characterisation of major ‘systems’ for offshore oil and gas projects is at Table A3.4 and a more general illustrative version of mining projects at Table A3.5.

Table A3 4: Offshore Gas Development: Services and Equipment for Major ‘Systems’

	Exploration		Development			Production
	Geology & Geophysics	Evaluation Drilling and completion		Gas production units (fixed)	Gas collection systems	Production & Maintenance
SERVICES	Data acquisition	Hire and operation of sensor			Services to install the subsea systems	Contracts for the operation of the facilities
	Interpretation of the surveys	Drilling and completion				Maintenance services – topside and undersea
		Engineering and management
		Support base / Contracts for marine support vessels air transport
EQUIPMENT	Seismic and exploration equipment	Supplies for drilling and completion		Fabrication and integration of topside modules	Pipelines for transport of gas
		Equipment for drilling, and subsea systems
	Seismic vessels	Sensors/ probes		Platforms and onshore facilities		Shock alleviators and relief valves
		Offshore support vessels
General Machinery and Equipment: Compressors, pumps, valves boilers, turbines, instrumentation, generators

Derived from work by Bain & Company

Table A.3.5: Basic generic stage and system map for Mining Projects

Overall Generic: Broad Categories
	Key Systems Required
	1		2		3		..n
	Eqpt	Services	Eqpt	Services	Eqpt	Services	Eqpt	Services
Exploration
Pre-Feasibility
Feasibility
Project Management
Concept Design
Design
Development
Fabrication
Installation
Operation
Processing
Maintenance
Technology & System Development
Shutdown/ Closure

It is also useful to identify the inputs that are generic and specialised and perhaps also those that are core (or critical to performance) and ancilliary or non-core, as in Tables Table A3.6 and Table A3.7.

Table A.3.6: Specialised and Generic Input Types for Mining Projects

	Specialised	Generic
Exploration	geotechnical engineering, geo-statistics, geophysics, geology, geochemistry, economic geology, drilling	mechanical engineering, management, maintenance, electrical engineering, data interpretation services, civil engineering
Project development	project management, EPCM services, due diligence, construction management.
Mining Operations;	Seismicity, rock mechanics, mining engineering, mine design and blasting
Processing Operations	metallurgy, leaching, hydrometallurgy and chemistry
Mine closure.	environmental services paste and thickened tailings, remediation, environmental engineering and acid mine drainage

Table A.3.7: Specialised and Generic Equipment and Services Inputs to Mining Projects

Overall Generic: Broad Categories
	Equipment & Materials [Core and Non-core]	Services [Core and Non-core]
	Generic	Specialised	Generic	Specialised
Exploration
Pre-Feasibility
Feasibility
Project Management
Concept Design
Design
Development
Fabrication
Installation
Operation
Processing
Maintenance
Technology & System Development
Shutdown/ Closure

A second, and complementary, approach to that of characterising ‘systems’ is to identify key activities, as in Table A3.8 for mining projects and with a somewhat different approach in Table A3.9. This second perspective, from a Canadian study, is more concerned with characterising the inputs in terms of the levels of: specialisation; scale economies; and ‘sophistication’. Such an approach may be more useful for understanding the development of local supply opportunity and capability. Table A3.10 provides an illustrative (and incomplete) a stage- activity - input ‘map’ for offshore oil and gas projects.

Table A3 8:- Activity-input map for Mining Projects

Stages	Mining Categories of Suppliers and Examples of Product and Services
	Knowledge intensive services Consultants	Specialized Services Contractors	Capital Goods and Equipment Suppliers	Consumable Inputs Suppliers
Services & goods mainly for investment projects	Exploration services. Exploration services. Investment project management. Engineering services (mine planning, process design, & metallurgy eng’g.) Mine closure, reclamation	Development & construction services. Tunnelling services. Shaft sinking	Heavy machinery & eqpt (eg mills, crushers, & smelting eqt
Services & goods mainly for ongoing operation	Mine automation & optimisation. Blasting engineering. Equipment design & adapting. Eqpt maintenance & repair Geological testing. Metallurgical analysis.	Drilling services Sampling services Drilling services Shaft sinking Laboratory Services Mineral handling contractors Education & training Mineral processing Env’t monitoring Tailing dam	Light machinery & equipment: Replacements Drilling eqpt Conveyors Ventilation eqpt Excavators Electronic eqpt Engines & generators Trucks	Explosives and blasting accessories Chemical products. Abrasives Acids. Drill bits. Tyres

Source: Urzua, O. (2007) Emergence and Development of Knowledge-Intensive Mining Services (KIMS) (Background report for the 2007 UNCTAD World Investment Report

Table A3.9: Preliminary versions of a mineral project of this generic stage-activity-input map -– Specialisation and Value Add

Type	Category	Examples
I. Specialized Machinery for the Mineral Sector	A1 Specialized & sophisticated -scale economies are important	Drill systems and vehicles; UG+OP loading & hauling vehicle’s; engines, transmissions and hydraulic systems;
	A2 Specialized sophisticated with limited scale economies	Airborne geophysical instrumentation; raise, shaft and tunnel borers; road-headers
	B Specialized engineered mid-tech" where scale economies are less possible	Winches, hoists and related; shaft furniture; headframes; crushers; some process equipment; special purpose UG or OP carriers and vehicles
	C Specialized "low-tech" - often high-bulk or weight to value	Sheet-metal fabrications (bins, hoppers, vats, tanks) "custom castings", conveyor components; drill steel and bits; rock bolts; grinding media; track mounted vehicles; mine supports.
II General Industrial Machinery & Equipment - also used in mining	D "High-Tech"	Process control systems; communications systems; instruments; some vehicles; exploration aircraft; laboratory equipment
	E "Medium-Tech"	Diesel engines; compressors; electric motors; general purpose pumps; ventilation and dust collection systems; some bulk materials handling; some vehicle components
	F "Lower-Tech"	Structural steel and construction materials; track; hose, liners and rubber products; piping; air ducts; some vehicle components (e.g. batteries); some hand tools