Since 1999, Whittle Consulting has conducted over 150 Whittle Enterprise Optimisation studies around the world. Time and again we have seen that there are many reasons why mining businesses decide to explore the implementation of a Whittle Integrated Strategic Planning process.
Some of these objectives and the resultant outcomes are listed below.
A better cash flow profile increases the economic viability of a mining project or operation. Cash provides security, flexibility and creates options for distributing value to all stakeholders.
Recent Examples
Whittle Consulting has developed over 150 Enterprise Optimisation models for mining businesses across all continents and commodities. These have consistently proven to significantly enhance the economics of mining projects and operations.
The full effects of a Whittle Enterprise Optimisation study conducted using the Whittle Integrated Strategic Planning process can be extraordinary. Where an NPV uplift of 5% can sometimes be the difference between a project being financially viable or unviable, Whittle Consulting has regularly achieved NPV increases from 5%-35%, and in many cases substantially more. These results occur even when other conventional optimisation techniques have already been applied.
Cash today is more valuable than the same amount of cash received in the future, due to it’s potential earning capacity. NPV recognises the time value of money. The result of the Whittle Integrated Strategic Planning process has been repeatedly proven to enhance the economics of a mining business from 5%-35%, and in many cases substantially more. This occurs even when other conventional optimisation techniques have already been applied. This can make or break the very existence of a mining project or operation and its survival in a competitive and volatile market.
“The results have stunned us. They are far better than we thought they would be.”
Mark Child, CEO and Executive Chairman, Condor Gold, La India Project, Nicaragua
Typical Net present Value (NPV) uplift of 15%-65%
The ideal time to commence Whittle Integrated Strategic Planning is during the planning stages of a project, before any major decisions are made. There is enough data in a PFS or FS to construct and operate a meaningful Enterprise Optimisation model. This process will inform project shaping decisions to maximise the likelihood of success.
Mining companies generally have a long list of investment options, including expansions, acquisitions, exploration and new technologies.
Most investment options generate obvious local improvements, but may have detrimental effects downstream. Others may have compounding benefits. The full effect of an investment option won’t be identified without a complete and integrated view of the business as a whole.
Whittle Enterprise Optimisation models simultaneously optimise the interconnections across the business. This enables quantification of the full effect that the investment combinations will have on the value generated by the whole system. The result is the proper
ranking and prioritisation of investment decisions.
The ability to raise finance and the calibration (dilution) involved is directly driven by the strength of the business case being presented. Whittle Integrated Strategic Planning is the way to ensure you are putting the best case forward. The business case is a combination of expected financial outcomes, sustainability and an appreciation of the risk and opportunities involved.
Shareholders are not the only stakeholders we need to consider when running a sustainable mining business. Local communities, employees, governments and environmentalists have much higher expectations and far more power than in the past. With higher visibility of our actions, we cannot and should not ignore their needs and preferences. We need to act with a sense of Corporate Social Responsibility (CSR). We are in business to create value for all our stakeholders, who must be regarded as partners.
Not all stakeholder values are monetary. Therefore, Whittle Integrated Strategic Planning aims to find the balance between financial value and other stakeholder values by employing the Five Capitals Framework. If successful, we will achieve the ultimate goal of an “enduring Licence to Operate”.
Any strategic plan is a function of the assumptions made about the future market and context. A change in these assumptions requires different plans, not just a more vigorous execution of the original plan.
A comprehensive strategic planning process should involve rehearsals for a range of potential futures, understanding the respective strategies that would apply for each. By developing and maintaining a suite of plans for a variety of scenarios, mining company management can achieve true strategic agility. This allows us to know how to react as conditions change.
A mining business is complex. Whittle Integrated Strategic Planning is a validation/audit of the conclusions that have been drawn from a planning process, evaluating whether the maximum economic potential of a mining property has been identified.
The task of ensuring consistency and integrity between the numerous models that cover the entire business is onerous and fraught with risk. Whittle Integrated Strategic Planning involves creating a single model of the entire business, from the resource model through to the financial model. Whilst not the primary objective of a Whittle Enterprise Optimisation project, a by-product is the assurance that the total business plan adds up.
Budgets, targets, reporting, KPIs and performance measurement must be aligned to the strategy of the business. Whittle Integrated Strategic Planning will identify the key drivers of value for mining businesses. This understanding should therefore dictate the content and format of the operational data, cost accounting and management reporting systems. If the management culture is one of value creation, then a consistent framework between all the management mechanisms is essential. There is no use having the right strategy if you don’t execute it.
Big Data provides new opportunities for improving the efficiency of operations. However, the pace of development of information technology enables the collection of data to the point where we are overwhelmed by it. Data systems should be designed in a structure that supports the execution of the company strategy. We should ensure that the key value drivers, which Whittle Integrated Strategic Planning identifies, become the focus of data systems. Data collected on other subjects can be less relevant and possibly even a distraction.
Whittle Consulting utilises Theory of Constraints in a strategic context to identify bottlenecks and take the consequences of them right back to the orebody. This results in a very different view of where value is spatially. This approach has a substantial effect on the mine design, and the operating strategy over the life of the operation.
Increasing the performance of the bottleneck in the system improves the
performance of the whole system. This approach provides substantial leverage
for improving business performance.
As our understanding of the orebody and system increases, we can become overwhelmed by the amount and complexity of the detail. Prober-E allows mining businesses to explore, fully understand and exploit the complexity within a project or operation. Prober-E has the power to optimise the largest and most complex multi-variable, non-linear problems presented by mining.
Whittle Integrated Strategic Planning provides a holistic view of the system. Without this, well-meant localised cost/productivity/efficiency improvement initiatives may be less relevant or even counterproductive.
Uncontrolled performance variation must be minimised – especially in the primary system bottleneck. However, inherent ore body variation can be regarded as an opportunity to be exploited, not a problem to be avoided. Whittle Integrated Strategic Planning coordinates the operating policies across the system to positively respond to the variety of characteristics throughout the orebody.
Improving good projects/operations is a very worthwhile undertaking. However, turning loss-makers into positive performers is life-changing for all involved. Whittle Integrated Strategic Planning can make the difference to your business survival.
The ideal way to evaluate innovative technologies is to understand the impact on the complete system.
