This paper will review how mining projects have evolved over the last three decades with respect to capital costs and allocation, infrastructure demands and overall processing complexity. The paper compares a number of Bechtel’s copper projects from the Americas and Australia and reviews some of the benchmark metrics to show how the overall delivery complexity of projects has evolved over the decades. 2. HISTORICAL CAPITAL COST INFLATION The mid-1990s concentrator designs were less than half the size of the current plants and this change in throughput largely reflects the decline in ore feed grades. Overall, the capital cost per ktpa (kiloton per annum) of product for the current plants is approximately three to five times higher than what was seen in the mid-1990s. Based on indications from various consumer price indexes, related costs in the United States have generally risen about 60% from 1995 to 2014. The main areas where capital cost growth has occurred are in the following areas: • Inflation and escalation have increased by approximately 60% over the time period. • Owners costs have risen by some 40% due to greater focus by owners on project controls and reporting • Construction indirect costs have grown by some 24% due to several contributing factors related to which are o contractor(s) management teams are larger, particularly in the area of project controls and quality assurance. o construction equipment costs have risen slightly more than inflation. o contractor’s overhead recoveries for field staff, construction, and supplies (i.e. small tools) are also higher in percentage terms. • Bulk material quantities have grown by 15%. There are no major reasons for the increase since the basic flowsheets and equipment counts have remained the same. • Home office engineering costs have grown by up to 15% due to the hours required per item of equipment installed. The costs have been managed downwards by the use of high value engineering centers. 3. DIVISION OF RESPONSIBILITY FOR LARGE PROJECTS AND SCOPE COMPONENTS Over time, the extent of scope on larger concentrator projects has continued to grow in scale and in complexity. In certain regions, aspects such as water source and supply are pivotal to the development of some projects together with considerations for concentrate product transport and tailings storage. Table 1 below shows a typical Division of responsibility for projects over time.
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