Guia Gestion de Proyectos- HATCH

8/12/2019 Guia Gestion de Proyectos- HATCH

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Project ManagementProcess Guide

FEL Overview

Process Guide

FEL Overview

PLP-100-020-0006


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FEL Overview

Table of Contents

1. Purpose ................................................................................................................................................. 1

1.1 Project LifeCycle Process ............................................................................................................. 11.1.1 Front End Loading - The Foundation of the PLP ............................................................. 21.1.2 Benefits ............................................................................................................................ 8

2. Scope ..................................................................................................................................................... 9

3. Definitions ............................................................................................................................................. 9

4. Project Process Description .............................................................................................................. 12

4.1 Study Purpose ............................................................................................................................ 124.1.1 Project Definition ............................................................................................................ 124.1.2 Defining the Right Project .............................................................................................. 124.1.3 Defining the Right Project - FEL Phase Implications ..................................................... 154.1.4 Project Execution Planning ............................................................................................ 21

4.2 Phase Requirements .................................................................................................................. 234.2.1 Phase Deliverable Accuracy Requirements .................................................................. 234.2.2 Hatch Requirements - Determining the Work Required in the Phase ........................... 264.2.3 A Client View on Phase Deliverable Content ................................................................ 28

4.3 Gate Reviews .............................................................................................................................. 29

4.4 FEL Phase Management ............................................................................................................ 294.4.1 Prior Phase Work ........................................................................................................... 294.4.2 Management .................................................................................................................. 314.4.3 Phase Work Planning .................................................................................................... 33

4.4.4 Final Phase Deliverables - Quality Assurance .............................................................. 34

5. Responsibilities and Cross-Functional Requirements ................................................................... 35

5 1 Roles and Responsibilities 35


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FEL Overview

Table 4-7: Phase-End Deliverable Structure and Subject Matter Examples ........................................... 28 Table 6-1: Associated Documents .............................................................................................................. 37Table 7-1: Reference Documents ............................................................................................................... 37

List of Figures

Figure 1-1: Increasing Investment and Definition with Decreasing Risk Over the PLP Phases ................... 2Figure 1-2: PLP FEL Project Phases ............................................................................................................ 3Figure 1-3: Typical FEL Activities ................................................................................................................. 6Figure 4-1: FEL Phase Project Definition .................................................................................................... 12

Figure 4-2: Complete Project Scope Definition ........................................................................................... 13Figure 4-3: WBS Definition.......................................................................................................................... 14Figure 4-4: FEL1 Option Analysis ............................................................................................................... 16Figure 4-5: FEL2 Option Analysis ............................................................................................................... 18Figure 4-6: FEL3 Option Analysis ............................................................................................................... 20Figure 4-7: FEL4 Execution ........................................................................................................................ 21Figure 4-8: Estimate Basis and Accuracy

, ,................................................................................................ 24

Figure 4-9: Estimate Accuracy Definitions .................................................................................................. 25Figure 4-10: Management Workflow ........................................................................................................... 31

Figure 4-11: Management Level of Effort per FEL Phase .......................................................................... 32 Figure 4-12: Typical iPas Tools Usage by FEL Phase ............................................................................... 33 Figure 4-13: Study Work Plan Processes ................................................................................................... 34

List of Appendices

Appendix A Study Table of Contents - Objectives and Requirements


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FEL Overview

1. Purpose

This Guide provides guidance to teams on the requirements of the Project LifeCycle Process

(PLP). The focus of this Guide is FEL1, FEL2 and FEL3 phase processes. A separate guide

outlines the requirements for FEL4.

This FEL Overview Process Guide should not be read in isolation. The Project Management

Discipline Guide (PLP-100-020-0002) should be read in conjunction with this Guide (refer toSection6). Successful delivery of any FEL1, FEL2 or FEL3 study requires the Study Manager

to effectively deliver sound project management practices.

1.1 Project LifeCycle Process

Hatch Ltd. (Hatch) requires continuous improvement in the preparation, management and

delivery of studies and projects for all its clients and, thereby, improves the reliability of the

results achieved. Consequently, the PLP has been established to provide a standardized,

generic methodology, based on best practices as applied to progressive project phases,which are separated and controlled by a series of gate reviews. This methodology permits

Hatch to systematically strive towards consistency in helping our clients to achieve their

goals.

The purpose of the PLP is to provide a rigorous methodology to effectively manage projects

being implemented by Hatch, and to ensure that all projects, throughout their project lifecycle,

are completed with a consistent approach. This approach is based on definition of an agreed

scope, level of investigation, evaluation techniques and a set of deliverables; all executed by

Hatch within the framework of our clients minimum requirements for the definition and

execution of projects. This Guide provides direction to all those directly involved in the

development, evaluation and execution of capital-intensive engineering projects.


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FEL Overview

1.1.1 Front End Loading - The Foundation of the PLP

The early study, or Front End Loading (FEL), of project phases is key to the successful

implementation of the execution phase and project closeout. The front end loading term is

commonly used to illustrate the value and opportunity that is realized by doing upfront work in

the early study phases of a projects lifecycle, when there is still the potential to influence the

successful outcome of the project.

FEL is the term used to describe the progressive and phased increase in investment in a

project, in line with progressively decreasing risk and increasing clarification and certainty

over time. Each incremental investment is made when the level of risk and certainty justifies

it, rather than committing large sums to an uncertain investment at the outset. This concept is

illustrated inFigure 1-1.

Figure 1-1: Increasing Investment and Definition with Decreasing Risk Over the PLP Phases

The objective of the PLP is to invest an appropriate amount of effort to identify analyze and


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FEL Overview

FEL3: Feasibility Study, in which the selected option is more fully defined and its viability

confirmed. The optimized project to deliver the solution is defined in terms of cost,

schedule, scope and other required definition elements required by the client. Particular

emphasis is placed on execution planning, and aligning the project schedule, estimates

and other baseline data to the execution plan.

FEL4: Execution, in which the capital investment is made, final design is completed, and

the project is executed to deliver the defined outcomes, in line with the scope, schedule,

cost, quality and other defined parameters.

The rigorous sequential completion of each FEL phase is key to the success of the project

execution and finalization phases. Intensive focus on the FEL1 (conceptual), FEL2

(prefeasibility) and FEL3 (feasibility) phases improves the likelihood of success in the FEL4

(execution) phase. Many clients do not follow a clearly structured FEL sequence. Where

possible Hatch should highlight the value adopting the FEL processes and engaging the

client to either adopt a more structured approach, or to fully understand the risks and risk

mitigation elements that must be built into the project definition arising from a less structureddelivery approach.

1.1.1.1 FEL Phases Gate Review

The sequential development of projects is shown inFigure 1-2.

Start-up

&Operations

FEL1 FEL2 FEL3

Front End Loading Phases

FEL-4

ExecutionFeasibilitySt d

Pre-FeasibilityConcept

Bus

inessPlan

GateRev

GateRev

GateRev

GateRev


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FEL Overview

Table 1-1: Project Teams Goals and Gate Review Teams Focus during FEL Phases

PLP Phase Project Team Goals Gate Review Team Focus

FEL1 Conceptual Phase

Provide the client with the informationto test the business concept againstthe investment hurdle criteria forconcepts

Identify the business need andestablish the Client Requirements

Specification (CRS) Establish the key input, process and

output production, or throughputparameters

Establish a number of alternativeapproaches to meet the definedproject objectives

Develop a workable plan and cost fortaking the concept through the FEL2phase

Support the client to validate the basisfor assumptions underpinning thebusiness concept

Confirm that optimized scope andproduction, or throughput parameters,have been defined

Confirm a thorough identification andevaluation of alternative technology,costing and implementationapproaches has been undertaken

Check for areas of opportunity andrisk to be investigated in later FELphases, to enhance value

Check the integrity of the FEL2 phaseplanning and costing

FEL2 PrefeasibilityPhase

Ensure the best project size, scope,technical and production solution hasbeen selected and is a viablebusiness concept aligned to thebusiness strategy

Confirm the CRS

Demonstrate that all the discardedproject options have been studied, areclearly inferior and have no probabilityof re-emerging as viable options,unless prescribed trigger events occur

Test the selected project optionagainst the investment hurdle criteria

Support the client to validate the basisfor assumptions underpinning thebusiness concept, as above

Check for a thorough evaluation of allalternative technology andimplementation options for the chosenproject size and scope, regulatoryrequirements as well as project costsand benefits

Check for a thorough evaluation ofopportunity and risk to the businesscase

Determine the realism of targets set


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FEL Overview

PLP Phase Project Team Goals Gate Review Team Focus

FEL3 Feasibility Phase

Optimize the project to refine projectdefinition to a level sufficient tosupport controlled execution

Establish the CRS shaping FEL3project definition

Support the assessment of thebusiness proposition to a level of

detail and accuracy appropriate for adecision on implementation funding

Demonstrate benchmark performanceand achievable success criteria,following a review of opportunities andthreats

Investigate an acceptable risk profileand corresponding risk managementplan

Produce a detailed plan (PEP Parts A

and B (Note:some projects will fullycomplete Part C, however it is usualfor Part C to be completed as part ofearly set up activities in FEL4)) fortaking the project through to FEL4implementation and operationalreadiness steps

Produce a detailed cost estimate,schedule and PEP for the FEL4project execution phase

Support the client to validate the basisfor assumptions underpinning thebusiness concept

Check for the thoroughness of designdevelopment and planning to achievethe required levels of detail andaccuracy, as well as project costs andbenefits

Check for the thoroughness ofevaluation of opportunity and risk tothe business case

Check for the realism of benchmarksused to establish best-in-classachievable success criteria

Check for the integrity of the FEL4implementation planning and inparticular ensure the PEP is specific

to the project under study and isdriven from a detailed understandingof the procurement, logistics,contracting, construction, social andenvironmental environments in whichthe project will be built

Deliver the defined project outputs inaccordance with the CRS, facilitiesdescription, PEP, budgets andtimescales

Typically, a Gate Review 4 is donewhen:

Engineering is ~70% complete

Procurement is well advanced


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FEL Overview

1.1.1.2 Typical FEL Activities

The activities typically undertaken in each FEL phase are shown inFigure 1-3.

FEL 1

Identify business need

and CRS

Generate options

Execute concept

designs

Evaluate costs and

business case

Generate FEL 1 phase

report

FEL 2

Confirm CRS

Prioritise options

Execute preliminary

design

Evaluate costs and

business case

Generate preliminary

PEP (Part A)

Generate FEL2 phase

report

FEL 3

Establish CRS

Develop Project Basic

Engineering

Generate Project cost

and business case

Generate detailled PEP

Parts A, B and C

Produce FEL3 phase

Report

FEL 4

Work the Plan - deliver

the PEP

Generate

specifications

Procurement

Detailed Design

Gate 4 Review

Construction

Test and Commission

Archive

Acceptance


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FEL Overview

Consequently, the CRS needs to be reconfirmed at the beginning of each project phase. See

Section6 for references to the CRS guide, template and checklist.

The initial business case will drive the basis for developing the FEL1 phase, progressing

through gate reviews to the FEL2 and FEL3 phases, with continuous alignment to the

strategic business plan to validate and define the overall project.

The scope, schedule and cost for each phase are largely dependent on the CRS for each

phase. The CRS defines the clients project requirements. The CRS is the vehicle for the

client to provide the project team with information relevant to the project that only the client

might know, due to their intimate knowledge of their business.

The CRS should be a complete, clear and unambiguous statement of the clients

requirements in measurable terms, and a key source document in setting the project context

and the required commercial outcomes. A well-prepared CRS will greatly reduce the

possibility of the project team making incorrect assumptions that deliver an unsatisfactory

result to the client.

The decision to proceed with any FEL phase is made on:

The expected benefit of the end result of the project after completing the full FEL process

for that phase

An evaluation of the cost of the FEL phase

The level of risk or uncertainty associated with the study and the outcome.

If the decision is taken to proceed to a particular FEL phase, a project team is assembled to

execute the FEL study within the scope, time, cost and quality constraints defined in the CRS.

The study team, in consultation with the Gate Review Leader or team, also defines the gate

i it i it ill t th lit f it d li bl i t th CRS


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FEL Overview

1.1.1.5 FEL Sequences

Typically, the deliverables produced in a project phase include the expected costs, schedule

and plan to execute the subsequent FEL phase. The complete FEL phase project

deliverables that pass the gate review are handed back to the client to assess the viability of

the project, and to decide whether or not to proceed to the next FEL phase. As with the

previous phase decision, the decision to proceed to the next FEL phase is typically based on

the expected costs of the FEL phase, the residual risks and uncertainty as well as the

expected viability of the final project deliverable.

The process repeats through the FEL1 to FEL3 phases, until the start of FEL4. Before

starting FEL4, the major capital investment decision needs to be made. This decision is made

only if the level of risk and certainty of the outcome are in line with the clients level of

investment and business investment criteria.

When the FEL4 phase and project execution is completed, the fully developed asset is

handed over to the client. Shortly after project completion and commencement of operations,

the actual benefits of the project need to be assessed and compared to those in the businesscase against which the project was founded in the first place. Typically, this assessment is a

year after start up, but at least after the asset-related business is running consistently at full

capacity. This process closes the loop on the investment cycle back to the clients strategy

and business processes.

1.1.2 Benefits

Some of the many benefits for Hatchs clients of following a methodical and consistent

approach throughout the PLP are:

Improved capital investment effectiveness. Delivery of the required assets (performing as

specified), at the right time and the right cost.


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2. Scope

This FEL Overview Process Guide provides an overview of the FEL1, FEL2 and FEL3 phase

work undertaken by Hatch.

3. Definitions

ARD:Acid Rock DrainageCapital Expenditure (CAPEX):The expenditure on goods and services that will increase the fixed assets of a company.

Client Requirements Specification (CRS):A document defining the complete customers requirements on a project in clear and

measurable terms. It is used as the basis for developing the scope of facilities and scope of

services.

Construction Work Package (CWP):An executable construction deliverable that defines in detail a specific scope of work and

should include a budget and schedule that can be compared with actual performance. The

scope of work is such that it does not overlap another CWP.

DCF:Discounted Cash FlowEstimate at Completion (EAS):The expected total cost of an activity, a group, a group of activities, or the project when thedefined scope of work has been completed and recognizing all anticipated variances from the

current budget.

EPC


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FEL Overview

Facility Breakdown Structure (FBS):A breakdown of the project deliverables as physical assets based on function (process f low

sheets). It includes all of the permanent plant facilities that will be provided by the project and

is included in the work breakdown structure.

FEP:Functional Execution PlanFront End Loading (FEL):

The process for conceptual development of projects in processing industries.Hatch Knowledge Centre (HKC):

The HKC is a centralized service for the business to collaborate, share and manage

information not stored in other Hatch systems.HSEC:Health, Safety, Environment and CommunityOff Project Review:

Off project reviews are led and conducted by teams not actively engaged with the

development of the project. The team is selected to provide an experienced and independent

perspective to project reviews. Typically, off project reviews during FEL development work

take the form of a gate review.

Operational Expenditure (OPEX):

The OPEX includes variable costs (utility purchases, catalysts and chemicals consumed, etc)

and fixed costs (labor, maintenance, contract payments, sundries, local head office costs,

service company costs, but excluding depreciation) that are endured by the continuingoperational function.

Package Breakdown Structure (PBS):

S f f f


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FEL Overview

Project Management Body of Knowledge (PMBOK):A book published by the Project Management Institute (PMI) that represents a set of standard

terminology and guidelines for project management.

PVA:

Project Value Analysis

Quality Assurance (QA):

Part of quality management focused on providing confidence that quality requirements will be

fulfilled.

Quality Control (QC):

Part of quality management focused on fulfilling quality requirements.

TOC:

Table of Contents

Value Engineering (VE):

A function based problem solving technique that uses team interaction to maximize the value

of each project. Value is the ratio of functionality to cost as perceived by the customer,

function is the specific task required to satisfy a customer need, and cost is the resource

consumed in achieving the function.

Value Improvement Practice (VIP):

Practice from previous experience which will add significant value to the current project or

business and lead to an improvement in safety, cost, schedule, maintainability and operability

outcomes. VIPs are commonly used to improve cost, schedule and the reliability of capital

investment projects.

Work Breakdown Structure (WBS):

A deliverable oriented grouping of project elements that organizes and defines the total work

f f (


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FEL Overview

4. Project Process Description

4.1 Study Purpose

4.1.1 Project Definition

The objective of the FEL1, FEL2 and FEL3 phases is to define a project that will meet the

objectives and requirements of our clients. FEL4 phase is devoted to executing the project

using baselines defined in FEL3 to control and manage project execution.

Project definition involves doing work in a structured framework to answer:

Have we defined the right project that meets the clients expectations?

Have we done the right FEL phase work for the right project?

These questions are further broken down inFigure 4-1.The requirements and implications of

these questions are explored in the following sections. The final element of this Guide

addresses the project management elements associated with undertaking FEL phase work

(see Section4.4).

FEL Phase

Have we defined the right

project

Has the scope been fully

defined?

Has the project

configuration been defined,

studied and optimized?

Have the execution

requirements for the projectbeen defined?

Have the business objectivesbeen met?

Have we done the r ight FEL

phase work for the rightproject

Does the work done in thephase align with the

expected accuracy

outcomes?

Does the work of the phase

cover all elements requiredto define the complete

project?


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FEL Overview

Figure 4-2: Complete Project Scope Definition

To assist in rigorously defining the physical asset, allocating costs and preparing schedules in

a meaningful manner, it is usual to break the total project down into subsections: areas,

facilities, sub-facilities and systems. The WBS defines this breakdown. The level of definitionrequired by a phase is shown inFigure 4-3.

Off site Infrastructure, indirect groups and

wrap around systems Off Plot

Location 1- On-site infrastructure,

indirect groups and wrap around

systems On Plot

On Plot - Mine

On Plot -

Process Plant

Location 2 On-site infrastructure,

indirect groups and wrap around

systems On Plot

On Plot - Mine

On Plot -

Process Plant

Battery Limit

Project

Battery Limit

Battery Limit

Product


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FEL Overview

Figure 4-3: WBS Definition

WBS development should consider the complete project scope, i.e. the on-plot scope and off-

plot scope, to an agreed set of battery limits defined within the CRS, seeFigure 4-2.

Note:Indirect groups reflect temporary work required to support the construction of the

project, e.g. camps, warehouses and construction power.

The WBS should be defined at the beginning of a phase, as the WBS drives:

Estimate presentation


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FEL Overview

4.1.3.1.1 Evaluate Options and Select the Base Case

Typically, some options might fail a prescreen hurdle assessment, a fatal-flaw analysis and,

with further work, a business-case hurdle test. The work of this phase is to establish

frameworks to constantly evaluate options through the phase, eliminate options with cause,

and then develop those options that meet the business case. Typically during FEL1, one

option of many surviving the business case hurdle is designated as the base case for

comparison purposes.

A possible scenario for option identification and analysis through FEL1 is shown inFigure4-4.

4.1.3.1.2 Documenting Analyses

As many major projects span many years and might often experience staff turnover on both

the client and Hatch teams, it is critical during this phase to document analyses and rationale

for eliminating options. It is also prudent to document those conditions, if any, under which

rejected options become viable. In this way, costly revisiting of discarded options during

future project phases may be avoided.

4.1.3.1.3 Continuous Option Screening during the Phase

Tools and methodologies applicable to the FEL1 phase rely on qualitative decision-making

methods as described in the FEL1 Process Guide (refer to Section6). Early elimination of

options, with good reason, allows budget allocations, with client consent, to be applied to the

remaining options to develop improved option definition, rather than continuing to apply a

uniform effort to all options through to the end of the study.

Option 1

Pre Screen

Hurdle

Fatal Flaw

Hurdle

Business Case

Hurdle

Option Study


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FEL Overview

4.1.3.2 FEL2 - Prefeasibility Study

Table 4-2: FEL2 Prefeasibility Study

FEL Phase Objective

FEL2 Prefeasibility Study During FEL2, the objective is to define the single preferred optionthat meets the business needs of the client and will be studied indetail in FEL3, by:

Evaluating the options arising from FEL1

Improving the level of understanding of the project and itsimplementation

As in FEL1, where possible, progressively eliminating optionsthat, upon further investigation, contain a fatal flaw, or fail tomeet the business case requirements.

This phase focuses on option ranking and elimination.

4.1.3.2.1 Evaluate and Eliminate Options - Recommend a Single Option for FEL3

As with FEL1, options should be eliminated with cause. The remaining FEL2 work should be

biased towards reducing the risk profile of the remaining options and improving projectdefinition for those options, with client consent. This may involve test work or third party

information to be sought to bolster assessments to allow identification of a single

recommended project option for FEL3 investigation.

4.1.3.2.2 Documenting Analyses

Eliminated options should be reported within phase-end deliverables to evidence a rigorous

and transparent process leading to the recommendation of a single option to be carried

forward into FEL3.

4.1.3.2.3 Continuous Option Screening During the Phase

Decision-making frameworks at this stage should become more objective with data collected

f fi ld i ti ti t t k d th l ll t d j t d t d i i


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Figure 4-5: FEL2 Option Analysis

4.1.3.3 FEL3 - Feasibility Study

Table 4-3: FEL3 Prefeasibility Study

FEL Phase ObjectiveFEL3 Feasibility Study Project definition to a level to enable a business decision to be

made to build the project and provide:

Robust project definition

Option 1

Option 2

Option 3

Option 4

Option 5

FEL 1 InputsFatal Flaw

Hurdle

Business Case

Hurdle

Option 6

Option StudyFEL 1

Result

FEL 2 Option StudyFEL 1

Result

Option for FEL 3FEL 2 Option StudyBase Case

From FEL 1

Option definition stopped upon failure to pass the hurdle. Work to this point

is documented in the final Study deliverable with the rationale for failing the hurdle


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FEL Overview

4.1.3.3.1 Planning for Project Execution

Unlike FEL1 and FEL2, FEL3 is aimed at project planning from an execution perspective to:

Generate sufficient information to allow a decision on execution to be made (including

finance)

Define the baselines against which the project will be managed and controlled during

FEL4.

As such, it is expected that at the start of FEL3:

All field data collection and test work is substantially complete

A single definition exists for the project for:

Scope

Execution method

Schedule

Financial objective.

4.1.3.3.2 Single Project Definition and Optimization

As expected, FEL3 as shown in Figure 4-6 reflects an absence of option evaluation, and

focuses on a single project definition for the phase. Inherent and necessary FEL3 work

includes analyses to refine such things as equipment selections, packaging strategies and

construction methodologies, which are necessary to optimize the project and provide

information necessary for baseline definition.

The FEL3 phase is notably different from the previous project phases. All major defining

decisions about the project and its implementation have been studied and rationalized during


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FEL Overview

Figure 4-6: FEL3 Option Analysis

4.1.3.4 FEL4 - Execution

Table 4-4: FEL4 Execution

FEL Phase ObjectiveFEL4 Execution Build the project to the definition and baselines defined in FEL3

Work in FEL4 entails executing the project as defined in FEL3 (see Figure 4-7.). It is

Option 1

Option 2

Option 3

Option 4

Option 5

FEL 2 InputsFatal Flaw

Hurdle

Business Case

Hurdle

Option 6

Project for FEL 4FEL 3 Project PlanningBase Case

From FEL 2

Option definition stopped upon failure to pass the hurdle. Work to this point

is documented in the final Study deliverable with the rationale for failing the hurdle


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Whilst the focus for the phase is aggressively resist change, change can and will occur

during the project as new information and circumstances present themselves. In all cases it is

expected that the Project Manager and the project team define change as and when it

occurs, and resist the temptation to act unilaterally and initiate change before the full impacts

are well defined and approved by the client. Hatch stands behind being honest and open with

our clients, and strive to develop strong client relationships.

Short-term acquiescence to address client demands will initially bring favor. However, this

favor soon evaporates, and client relationships are destroyed when the full impact ofimplemented change becomes apparent, usually long after the decision to implement the

change has passed. The focus for the team and their managers is to proactively assess and

seek alignment on change with our clients, affording them the chance to buy into impacts,

rather than being presented with sticker shock later in the project.

Option 1

Option 2

Option 3

Option 4

Option 5

FEL 3 InputsBusiness Case

Hurdle

Execute against Baselines defined in FEL3 Strive to

improve the Business Case through ExecutionDefinition from FEL3


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FEL Overview

4.1.4.1 Project Execution Planning and CostsAmongst many variables, project execution planning is a significant driver of project cost,

both direct and indirect. With indirect costs ranging up to 50% of the Estimate at Completion

(EAS), and Engineering, Procurement and Construction Management (EPCM) costs typically

ranging between 10% and 20% of the EAS, the services management element of a project

often contains the largest single-line cost items for the project.

Choice of execution method drives:

The capital cost of the project. Consider, for example, the costs of multiple, large module

yards in multiple countries with seaborne shipment of modules weighing 5000 tonnes or

more, compared to conventional in-country stick-built approaches.

The split of cost between client and the management organization. clients often do not

carry the full cost to the company of their client team members. Other client-related costs

are sometimes not visible to the EPCM team, as these are sometimes buried in corporate

overheads. This issue often causes much discussion with clients, as prima facie the

Hatch unit cost is much higher than that of the client. After inclusion of indirect costs on a

comparable basis, client and Hatch costs come into alignment. Nevertheless, it is often a

lower cost for client team members that will be seen in the final estimate, depending on

the accounting policies of the client.

Split of work responsibility between the client, Hatch, vendors and contractors might

include the following:

Some clients prefer to manage the complete procurement process themselves, with

Hatch managing the remainder of the EPCM mandate

Use of specialist Engineering, Procurement, Construction (EPC) providers results in

i d di t t d d ti i EPCM t d lt th l l f EPCM


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FEL Overview

Table 4-5: Stage PEP Completion through the PLP Phases

FEL1 FEL2 FEL3 FEL4

ProjectExecutionP

lan

PEP Part A Project

Definition andExecution

StrategyDevelopment

Not started

Developed

Majorexecution

strategiesdefined

Complete

Ready for

execution

In use fromFEL3

Plan reviewed,confirmed andany changes

approved andincorporatedinto the PEP

Part B Functional

ExecutionPlans (FEP)

Not started Not started

Complete

All (FEP) are

aligned withPart A andready forexecution

In use fromFEL3

Plan isreviewed,confirmed andany changesapproved andincorporatedinto the PEP

Part C C t l N d

Preliminary

Data extractedfrom the capital

Substantiallycomplete

Baseline datafrom FEL3collated. Fullallocation ofcosts to

In use fromFEL3

Baseline datafrom FEL3 iscollated and


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FEL Overview

4.2.1.2 Estimate RequirementsFigure 4-8 shows the relationship between the expected outcome and the requirements for

the definition of inputs to the estimate in order to achieve the required estimate accuracy

levels. Many clients refer to studies achieving a certain accuracy requirement only, and leave

it to the study team to do the work necessary to achieve that level of accuracy. For

experienced project developers, the linkage between the level of effort within a study phase

and the expected accuracy outcomes is well understood. For less experienced project

developers, this linkage is poorly understood. During development of the scope of work for a

project phase, it is essential to clarify and reach a mutual understanding of the level of effort

required to deliver the expected estimate outcome.

Within each of the FEL process guides (FEL1 to FEL3, see Section 6)guidance is provided

by discipline on the requirements for generating the quantity and unit cost drivers for

preparing the estimate.

Figure 4-8 summarizes this information.

Cost Basis

Awarded

Contracts/Purchase

Orders a ctual costs

Firm Bids materials

and equipment.

Contractor pricing for

construction.

Budget Quotes,

previous project data

FEL 3(accuracy 15 to 5%)

FEL 4(accuracy 10 to 0%)


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FEL Overview

4.2.1.3 Estimate AccuracyAccuracy assessments are increasingly driven by analysis rather than an arbitrary

assessment. For FEL3 and FEL4 phases, and some complex FEL2 studies, quantitative risk

assessments are undertaken, and an objective measure of estimate accuracy is defined.

Figure 4-9 shows how estimate accuracy can be demonstrated objectively. It is usual that

accuracy in this context is quoted against a confidence range, i.e. over a range of 10% to

90% (the range provides an 80% chance of the project neither under running or overrunning)

the accuracy is assessed as y%, +x% around an expected (P50) value of Z. The choice of

contingency level will vary from client to client and according to their appetite for accepting

cost risk. The figure shows one position for defining contingency, there are many and the

definition of an appropriate contingency level requires negotiation and agreement with the

client.

The challenge in completing the phase of work is to focus on work elements defined within

the gate review checklist that have significant leverage in influencing the estimate and

accuracy targets for the estimate. The study work planning process should reflect an

assessment of the major drivers for the capital cost (hence where the project definition effort

should be spent) and the work required to achieve the levels of estimate accuracy required of

the phase.

Completion of all items within the gate review checklist to the required levels of completion

defined in the gate review checklist might result in effort being applied to work fronts with

marginal impact on overall project viability.

%

Accuracy (-%) Accuracy (+%)

Capital Cost Estimate Cumulative Probability Distribution


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ReportSection

Section Title ReportSection

Section Title

9 Process Plant 22 Execution Plan

10 Site Development andInfrastructure

23 Operations Assurance

11 Business Systems

12 Project Schedule

13 Capital Cost Estimate

The development of the final TOC and the specific requirements for each TOC section for the

current phase requires:

Alignment with the client

Execution at the beginning of the phase

Documentation within the CRS.

In general, the objectives and requirements of each subject area within the TOC are outlined

inAppendix A. Appendix A provides an insight into the objective subject matter to be

considered in each phase of the project and the required completion status. Appendix A may

be thought of as an executive summary to the gate review checklist (refer to Section6). The

study TOC is intended to provide:

A refresher for experienced personnel

A guide for people new to senior roles and undertaking gate reviews

A guide for new Hatch personnel on the requirements for completing FEL1, FEL2 and

FEL3 work.


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Section Client 1 Client 2 Client 3 Client 4

17 Process Closure andRehabilitation

Operating CostEstimate

Operating CostEstimate

18 Process Plant Capital Costs Ownership, legal andContractual

InvestmentEvaluation

19 Infrastructure andServices

Operating Costs InvestmentEvaluation

Ownership, Legaland Contractual

20 Project ExecutionPlanning

Marketing Project Status andReviews

Project Execution

21 ConstructionManagement

Ownership, legal andapprovals

Work Plan Work Plan

22 OperationsReadiness

Financial Analysis Project Status andReviews

23 Capital Cost Estimate Funding

24 Operating CostEstimate

Status of Studies

25 Risk Management Work Plan- Future

26 Business Analysis

27 Next Stage ExecutionPlanning

4.3 Gate Reviews

The last element of the PLP process for a phase is the review to define the degree to which

all elements of the work described in the study work plan have been completed, and to

provide a quantified assessment of the risk remaining with project definition.

The gate review process guide (see Section6)provides direction on the objectives of the

gate reviews, the determination of which projects require review and the process of thereview.

A formal review session provides the organization with an off-project status review and


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It is necessary at the beginning of a new FEL phase to develop a good understanding of thelevel of completion of the previous phase before starting the current phase of work.

Incomplete work elements from a previous phase might result in:

New options entering the project, driving unplanned work, cost and schedule impacts

New information based on exploration, field investigation or test work programs,

contradicting assumed or preliminary data and requiring major scope upgrade, or revision

to the business-case outcome

Rework and delay from many areas.

4.4.1.2 Previous Phase Gate Review

When starting a new phase, it is required that the Study Manager reviews the outcomes of

the previous phase gate review. When Hatch undertakes FEL phase work from third parties,

it is prudent to:

Review the work of the previous phase using gate review protocols

Define gaps, or outstanding items, requiring completion from the previous phase of work

(this analysis is usually done by the Hatch team undertaking the new phase of work).

4.4.1.3 Outstanding Items

Regardless if a previous phase was completed by Hatch or a third party, it is necessary to

confirm outstanding items have been:

Completed and outcomes are available for the start of the current phase; or conversely

completion gaps are defined

Defined the work required to address outstanding work issues has been defined, and

agreement made with the client:


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Alternatively, substantial completion of the appropriate elements of the work definedwithin the gate review checklist, but with appropriate adjustments and allowances to cost

and schedule to allow for work that is not complete

Achievement of the levels of accuracy for estimates produced for:

FEL1 and FEL2, which is evidenced by completion of the checklist

FEL3 and complex FEL2 projects, by a quantitative risk assessment.

SeeFigure 4-8 andFigure 4-9.

If all work elements contained within the gate review checklist are completed to the

prescribed standard, and yet the phase fails to meet the objectives of the phase, a

determination needs to be done as to whether or not the phase has been effectively

completed, for example either the project has:

Incomplete or insufficient option identification or ranking

Not met estimate accuracy requirements.

4.4.2 Management

4.4.2.1 Management Workflow

The work processes, hence the work of management, to be applied to any FEL phase is

similar and follows the model shown inFigure 4-10.Within the HKC are detailed workflows

describing Hatchs methodology for developing projects. These workflows have been aligned

to the major process groups shown withinFigure 4-10,and are not repeated within this guide.

The management processes required to be implemented by a Study Manager of FEL phase

work is outlined in detail within the project management discipline guide (see Section6).

Th iti l l t f h t h i Fi 4 10 t i d ithi h f


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4.4.2.2 Level of Effort and Management ControlsThe level of effort to be applied to each of these management activities for each FEL phase is

represented inFigure 4-11.The specific responsibilities of the Study Manager for a FEL

phase are detailed within the study manager role description (see Section6).

Figure 4-11: Management Level of Effort per FEL Phase

In establishing the management framework for a phase, a balance has to be made in the

effort and systems applied to doing the phase work, and the work of managing a phase and

delivering an outcome within the managed expectations of the client.

Completion of high-quality technical work without appropriate management controls, resulting

in overruns and delays, has the potential to:

LevelofEffort

FEL 1 FEL 2 FEL 3 FEL 4

Context,

Setup,

Execute,

Control,

Evaluate,Closeout


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Figure 4-12: Typical iPas Tools Usage by FEL Phase

Systems requirements for the phase need to flow directly from the study work plan. The study

work plan defines the disaggregation of phase work into work packages, and how the work of

those packages is managed and delivered The iPas suite of tools have been designed to be


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Figure 4-13: Study Work Plan Processes

The processes to form a study work plan are the same for all FEL phases. The effort and

detail required to develop a work plan that provides a sound baseline on which to manage the

work of the phase follows the level of effort required to manage the phase, refer toFigure

4-11.

4.4.3.2 Package Work Plans

For FEL1, FEL2 and FEL3 studies, emphasis needs to be placed on developing the individual

work plans for each package, and defining the basis on which work will start and be

progressed:

Relative to other interrelated work packages

For packages where there is concurrent or parallel work in developing the informationrequired as inputs to other work packages, for example:

How to progress process design when sample collection, sample testing and process

testing has not been completed or started?

How to progress process design related to a mine whose mine design, production

schedules and expected run-of-mine feed specification is being defined as part of the

current phase?

For parallel work, work normally proceeds on the basis of assumptions or data developed

from the previous phase. It is prudent within the package work plan to define hold and check

points to confirm that data developed during the phase supports the incoming assumptions.

Define

Scope

DefinePackage

Structure

DefinePackage

Work Plans

Work Plan

IntegrationSetup Implement


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Typically, the report will be disaggregated and distributed widely within the client organizationand third parties (contract allowing) for review and acceptance. Report preparation is one of

the last opportunities to present a quality product by Hatch for the current phase. Therefore, it

is important to consider that:

The report is written as if by one person and is written to present objectively and

impartially the work and findings of the study.

The quality of writing and presentation matches the quality of the technical and other

inputs. Consideration should be given to appointing a technical writer and editor to review

and polish the report before presentation to the client.

The report format and content is agreed early in the phase with the client to ensure their

expectations are fully reflected in the final deliverable.

Report writing is often left as the last, undesirable work activity on a project. Managers are

encouraged to start report preparation early, and to progressively assemble the report in both

hardcopy and electronically to allow progressive release to the client. Early definition ofprotocols for report preparation and definition of protocols for assembly of the report within

iPas DM is encouraged, and should form part of the study work plan. The assembly and

status of report elements should become a routine subject for management progress review

during the phase.

5. Responsibilities and Cross-Functional Requirements

5.1 Roles and Responsibilities

The Study Manager and Project Sponsor represent the two most important roles to be

performed during the study. A detailed role description for each person is referenced in

Section 6


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5.3 Hatch-Appointed Third PartiesThe roles and responsibilities of Hatch-appointed third parties are defined in the

specifications and scopes of work provided to the third parties prior to engagement by Hatch.

In nearly all cases, Hatch-appointed third parties should be working to the same level of

definition and schedule applicable to Hatch. Our contracts normally require that Hatch will

maintain liability and responsibility for any work undertaken by third parties contracted to

Hatch. The Study Manager has a responsibility to ensure the work undertaken by third parties

meets the deliverable requirements of the current study phase.

5.4 Cross-Functional Requirements within Hatch

In developing the study work plan, based on the CRS, the Study Manager will define the

functional support required by Hatch that is necessary to complete the study. The Study

Manager is accountable for negotiating access to required functional personnel, and

assigning work to meet the requirements for completing the study.

5.5 Study Workflows

Workflows for FEL3 and FEL4 can be found within the HKC. Workflows for FEL1 and FEL2are under development.


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6. Associated Documents

Table 6-1: Associated Documents

Document Identification Document Title

PLP-103-008-0004 Client Requirement Specification Checklist

PLP-103-020-0006 Client Requirement Specification Guide

PLP-103-086-0010 Client Requirement Specification Template

PLP-100-020-0007 FEL1 Process Guide




PLP-100-008-0001 Gate Review Checklist

PLP-100-020-0001 Gate Review Process Guide

PLP-620-020-0001 Project Capital Cost Estimate Discipline Guide

PLP-100-020-0002 Project Management Discipline Guide

PLP-104-074-0002 Project Sponsor

PLP-104-074-0006 Study Manager

PLP-103-086-0011 Study Report Template

PLP-100-020-0004 Study Work Plan Process Guide

PLP-100-086-0005 Study Work Plan Template

PLP-103-020-0003 Value Improvement Practices Process Guide

7. Reference Documents

Table 7-1: Reference Documents
http://cop.hatchworkshare.com/livelink/livelink.exe/open/5299890http://cop.hatchworkshare.com/livelink/livelink.exe/open/5299890http://cop.hatchworkshare.com/livelink/livelink.exe/open/4630898http://cop.hatchworkshare.com/livelink/livelink.exe/open/4630898http://cop.hatchworkshare.com/livelink/livelink.exe/open/5109115http://cop.hatchworkshare.com/livelink/livelink.exe/open/5109115http://cop.hatchworkshare.com/livelink/livelink.exe/open/5263056http://cop.hatchworkshare.com/livelink/livelink.exe/open/5263056http://cop.hatchworkshare.com/livelink/livelink.exe/open/5263660http://cop.hatchworkshare.com/livelink/livelink.exe/open/5263660http://cop.hatchworkshare.com/livelink/livelink.exe/open/5263170http://cop.hatchworkshare.com/livelink/livelink.exe/open/5263170http://cop.hatchworkshare.com/livelink/livelink.exe/open/5263468http://cop.hatchworkshare.com/livelink/livelink.exe/open/5263468http://cop.hatchworkshare.com/livelink/livelink.exe/open/5263260http://cop.hatchworkshare.com/livelink/livelink.exe/open/5263260http://cop.hatchworkshare.com/livelink/livelink.exe/open/4629906http://cop.hatchworkshare.com/livelink/livelink.exe/open/4629906http://cop.hatchworkshare.com/livelink/livelink.exe/open/4576513http://cop.hatchworkshare.com/livelink/livelink.exe/open/4576513http://cop.hatchworkshare.com/livelink/livelink.exe/open/5263564http://cop.hatchworkshare.com/livelink/livelink.exe/open/5263564http://cop.hatchworkshare.com/livelink/livelink.exe/open/5263469http://cop.hatchworkshare.com/livelink/livelink.exe/open/5263469http://cop.hatchworkshare.com/livelink/livelink.exe/open/5263353http://cop.hatchworkshare.com/livelink/livelink.exe/open/5263353http://cop.hatchworkshare.com/livelink/livelink.exe/open/5106585http://cop.hatchworkshare.com/livelink/livelink.exe/open/5106585http://cop.hatchworkshare.com/livelink/livelink.exe/open/5556086http://cop.hatchworkshare.com/livelink/livelink.exe/open/5556086http://cop.hatchworkshare.com/livelink/livelink.exe/open/4631002http://cop.hatchworkshare.com/livelink/livelink.exe/open/4631002http://cop.hatchworkshare.com/livelink/livelink.exe/open/4631002http://cop.hatchworkshare.com/livelink/livelink.exe/open/4631002http://cop.hatchworkshare.com/livelink/livelink.exe/open/4631002http://cop.hatchworkshare.com/livelink/livelink.exe/open/4631002http://cop.hatchworkshare.com/livelink/livelink.exe/open/5556086http://cop.hatchworkshare.com/livelink/livelink.exe/open/5106585http://cop.hatchworkshare.com/livelink/livelink.exe/open/5263353http://cop.hatchworkshare.com/livelink/livelink.exe/open/5263469http://cop.hatchworkshare.com/livelink/livelink.exe/open/5263564http://cop.hatchworkshare.com/livelink/livelink.exe/open/4576513http://cop.hatchworkshare.com/livelink/livelink.exe/open/4629906http://cop.hatchworkshare.com/livelink/livelink.exe/open/5263260http://cop.hatchworkshare.com/livelink/livelink.exe/open/5263468http://cop.hatchworkshare.com/livelink/livelink.exe/open/5263170http://cop.hatchworkshare.com/livelink/livelink.exe/open/5263660http://cop.hatchworkshare.com/livelink/livelink.exe/open/5263056http://cop.hatchworkshare.com/livelink/livelink.exe/open/5109115http://cop.hatchworkshare.com/livelink/livelink.exe/open/4630898http://cop.hatchworkshare.com/livelink/livelink.exe/open/5299890


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Appendix A

Study Table of Contents - Objectives andRequirements


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Project LifeCycle Process

Reference No. PLP-100-020-0006, Rev. 0 Ver: 02.07 Hatch 2013 All rights reserved, including all rights relating to the use of this document or its contents.

Study Section Study Section Scope FEL1 FEL2 FEL3

1. Project History Define the:

Project objectives, benchmarks and key performance

indicators

High level scope of facilities to be provided by the project defining any interdependencies with off project work andclearly defining the battery limits for the project.

Location, regional and country factors impacting the project

Climatic data

Project, land, resource and technology ownership

Intended execution approach from the previous phase

Project development history

Business environment

Strategic case for the project

Incoming business case, i.e. markets, revenue, industrystructures and financial performance required of the project

Summary of any reviews completed to date and actionsarising

Constraints and dependencies

Gather preliminary dataderived from the public

domain, specific to theproject location.

Define the location for theproject facilities, i.e. theproject site is oftenassumed.

Conceptually understandthe preliminary views of thebusiness drivers that willsupport a project of thistype.

Define known project

constraints.

Obtain preliminary site-specific data, including field

investigations work.

Complete site locationstudies, and develop a firmview of the project site andsite ownership for theproject.

Define a sound businesscase to support FEL3investigations.

Complete reviews fromFEL1, and incorporateoutstanding work items intothe FEL2 work plans.

Complete detailed site-specific information and

test work, and completeoutstanding fieldinvestigations required tomeet accuracyrequirements for thisphase, and incorporatedinto the project definition.

Understand the land,resource and technologyownership, and includestrategies for acquisition inthe project definition.

Define a firm business case

on which to support aninvestment decision toimplement the project.

Make clear statements ofoutstanding FEL phasework at the phase end, anddefine specific express riskmitigations required inFEL4 to cover the scopedefinition, cost estimates,schedule and executionplan.

2. ExplorationResults and

GeologicalContext andBackground

Define the:

Geological context for the orebody, including the type of

deposit

Topography and survey, including the overall site grid(s)

Exploration work undertaken to date

Drilling programs undertaken and their results, including in-progress or planned work

Core data, drilling method, recovery and sampling techniques

Data collected, including:

drilling spatial and survey data

Assemble initial informationthat, by the end of a FEL1

study, would support atleast a NI43-101, JORC, orSAMREC Inferred mineralresource classificationsuitable for a preliminaryeconomic assessment, (orsimilar), report.

Complete outline regionalgeology, topography and

Provide advancedinformation that, by the end

of a FEL2 study, wouldsupport a NI43-101, JORC,or SAMREC mineralinventory, at least at anIndicated resource level.

Complete advancedgeology, topography,hydrology, exploration andinterpretation work,

Provide detailedinformation that, by the end

of a FEL3 study, wouldsupport a NI43-101, JORC,or SAMREC mineralresources and mineralreserves, at least atMeasured resource andProbable reserve levels.

Complete detailedtopography, hydrology,


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such data as geological, lithological, structural,mineralogical and chemical of the mineralized zones and

host rock mass hydrogeological geophysical geotechnical (for surface facilities) geomechanical (for underground or open-pit mining

facilities) deleterious component distribution(s) overall bulk density quality of waste rock for use as aggregates for concrete

production in construction

Assay and test work methods and data

Core data and assay quality control measures applied

Data verification protocols applied in preparation of thegeological block model

Deposit geology.

Create the geological block model and supporting data, includingspatial distribution of the mineral inventory by volume, tonnes andgrade that extend beyond the expected mining volume into hostrock, along with known or interpreted structural features.

See National Instrument (NI) 43-101 and/or Joint Ore ReservesCommittee (JORC) and/or South African Code for Reporting ofExploration Results (SAMREC) for additional guidance for therespective level of study.

Data assessment should be to a level to allow:

Preparation of flow sheets

Assessment of environmental impacts of mineralized material

and waste Definition of overall variability of the deposit parameters that

would affect the economic, environmental, health and safety,or site closure on a project wide basis.

exploration work, (includingQA/QC). Provide a clear

preliminary understandingof the topography, geology,mineralogy andmineralization continuity ona deposit-domain scale.

Identify key technicalissues requiring additionalsubsequent studies,including sampling formetallurgicalcharacterization andtesting, site geomechanicaldata collection and AcidRock Drainage (ARD).

(including QA/QC). Providea clear advanced

understanding of thetopography, hydrology,geology, mineralogy, andmineralization continuitywith identification ofdeleterious components.Develop and apply theinitial structuralinterpretations andgeomechanical domaining.

Provide an advanced blockmodel.

Identify technical issuesrequiring follow-up study insubsequent studies,including additionalsampling for metallurgicalcharacterization andtesting, additional sitegeomechanical datacollection and ARD.

geology, structuresfeatures, geomechanical

assessment, explorationand interpretation work,(including QA/QC). Providea clear detailedunderstanding of thetopography, hydrology,geology, mineralogy andmineralization continuitywith assessment ofdeletrious components.

Provide an finalized blockmodel.

Limit technical issuesrequiring follow up insubsequent work to thosethat do not materiallyimpact the understanding ofthe deposit.


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4. Mining Define the:

Mine design criteria

Mine access and arrangement ramp or shaft (if a shaft isrequired, a preliminary size and configuration, hoistingsystem, and headframe need definition)

Final mining method(s)

Sequence of development and production, accounting for keydeleterious elements

Mining capacity and rate

Cut-off grade(s)

Preliminary mining losses and dilution values, which must beidentified and finalized for declaration of reserves

Run-of-mine tonnage and head grade(s) over the duration ofthe project broken down into periods suitable for process plantdefinition

Development and operating requirements, including apreliminary mobile fleet and maintenance approach

Preliminary main ventilation and cooling network andassociated major installations

Preliminary ground-support methods

Preliminary backfill plant and underground network dewateringpreliminary configuration and capabilities

Preliminary power distribution network

Ore and waste handling networks to the processing plant,including sizing and in-line storage

Mining support infrastructure and services for undergroundand surface, e.g. magazines, refuge stations, shops andcommunications and dispatch

Waste disposal method and storage location Ore treatment, if prior to processing plant development

Project capital and ongoing sustaining capital costs

Mine closure cost estimate

Mine operating cost estimate, including preliminary laborcounts.

Identify viable options to beinvestigated at the next

stage of study related to: Mine access

Mining methods

Production rates

Ore and waste handling

Mine ventilation(including cooling)

Backfill

Other key site-specificsystems or aspects,such as:

dewatering water treatment

mine power major components

of the mining fleet maintenance

approach metallurgical

processconsiderations.

Provide an initial estimationof mine production rates,the mineable resource(using simple economicparameters orassumptions), and miningsequence at a block or

shell level.

Provide potential mine,typical layout-sketchconfigurations, and high-level life-of-mine schedulesfor development andproduction.

Define the mine designbased on:

Preliminary mininglayouts for either openpits or underground

Vendor catalogues

Available regional data

Benchmark miningproductivityassessments

Preliminary layoutsshowing all WBSelements and sub-facilities.

Primarily base mining costs

on project specific costestimates, as opposed tocosting from similardeposits.

Provide cost estimates,based on benchmark dataand preliminary vendorinformation.

Provide a clearly definedbases of design for allsystems and activities.

Provide preliminary life-of-

mine annual schedules fordevelopment, andproduction should be basedon typical project miningactivities established using3D design.

Provide sketches of mineservices backbonenetworks.

Define the mine designbased on:

Refined mine access

Mining methods

Production rates

Ore and waste handling

Mine ventilation(including cooling)

Backfill

Other key site-specificsystems or aspects,such as:

dewatering water treatment mine power

components of themining fleet

maintenanceapproach andfacilities

metallurgicalprocessconsiderations.

Provide:

Refined mineproduction rates

Mining extraction usingeconomic parameters

Mining sequence at astope grouping orbench level.

Provide refined minelayouts, and a life-of-mineschedule by year fordevelopment andproduction.


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Outline staffing andapproach philosophies for

the project, includingoperations and mine-closure periods, and definethe boundaries betweenthem.

Provide mine costing andperformance, based onsimilar operations.

Provide a refined staffingapproach and counts for

the project, includingoperations and mine-closure periods using pre-defined boundariesbetween them.

Provide mine costing andperformance, based onsite-specific parameters atthe activity level (brokendown into labor, materialsand equipment) with aproject-specific breakdownfor key items, such aspower and diesel.

5. Process Definition Define the:

Test work programs to be undertaken in the phase togenerate sufficient information to uniquely characterize theprocessing route of the preferred processing option. Test workshould be based on representative samples of materials to beproduced from the mine, when mined according to themethods and schedule contained in this phase report.

Plant capacity after consideration of availability and reliabilityanalyses.

Process design criteria, based on the results of test workprograms undertaken.

Process flow diagrams.

Piping and instrumentation diagrams.

Mass and energy balances.

Water balances.

Conduct preliminary bench-scale test work, whichunderpins development ofthe process design, massand energy balance.Typically, complete testwork on preliminarysamples.

Develop draft processdesign criteria, based onexperience.

Complete Level 1 Hazard

studies.

Complete technology trade-off studies, and selecttechnology routes for theproject.

Develop Block Diagramsand mass balances foreach option.

Complete a robust programof test work to support thedefinition of the processdesign criteria, flow sheetand mass and energybalance.

Define operating anddesign flows, and sizeprocess equipment for eachoption to suit.

Complete Level 2 Hazardstudies.

Provide a final draft ofprocess flow diagrams andattendant data tables forthe selected option, readyfor confirmation in FEL3.

Develop P&ID drawings,and define major lines andcontrol functionality.

Complete pilot-scale testwork programs, and usedata to develop a frozenprocess definition for theproject, including for:

Mass and energybalance

Process flow diagrams,with full definition ofnominal, design dutiesand minimum flowduties.

Define and quantify allprocess streams

Freeze mass and energybalances for execution

Freeze P&ID drawings,ready for detail design.

Complete Level 3 Hazardstudies.


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Develop preliminaryprocess flow diagrams forthe base case.

Complete preliminarycapacity studies.

Define product streams andspecifications.

P&ID development is notrequired for FEL1.

Freeze process equipment

list and equipment sizing.

Ensure the processdescription is detailed andcomplete, to provide abaseline for completing thedetailed engineering designin FEL4.

6. EngineeringDevelopment

Define the:

Engineering criteria to be applied to the scope development

Outcomes of the project value analyses.

Implement value improving practices that are demonstrablyapplied to the project scope.

Develop the design criteriafrom standard industrypractices, internal Hatch

documents and criteriaused for similar projects insimilar environments.(Criteria have not beencustomized to suit theproject at this stage.)

Define the:

Scope of valueimproving practices tobe applied to the project

Potential for thesepractices to improve thebusiness case in

subsequent FEL phases

Value engineeringopportunities forexamination in FEL2.

Provide draft or preliminarydesign criteria andstandards.

Define the valueengineering opportunitiesfor FEL3. (The output ofvalue improving practices isevident in the developmentof the project scope anddelivery tools.)

Develop detailed designcriteria for all disciplinescontributing to the project,

and ensure design criteriaare reflected in calculationsand engineering definitionfor the project completedfor this phase. (Designcriteria from this phaseform the baseline designcriteria for FEL4. Littlefurther development ofdesign criteria is expectedin FEL4.)

Complete value improvingpractices (VIPs), and reflectoutcomes in the finaldefinition. (Ongoingimplementation of VIPs isevident in the PEP, e.g. useof design tools).


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7. Project Layout Develop project layouts to reflect the placement of majorequipment and for all WBS elements. Work definition should align

with the development of frozen arrangements for the completeproject scope.

Develop the WBS for the complete project, including the:

Mine

Process plant

On-plot site development and infrastructure

Off-plot site development and infrastructure.

Define the:

Topography and survey, including the overall site grid(s)

Battery limits for the project under study

Interface conditions for any material flow, service, utility andsuch crossing the battery limits

Responsibility for providing the services, materials and otheritems crossing the battery limits.

Prepare the conceptual design or specification of each projectoption and inputs, including the conceptual site plans, generalarrangements and layouts.

Develop the conceptuallayouts for each option,

relying on benchmark andpublic domain data.(Typically, arrangementswill show facility blocks toenable overall site layout,roads and utility corridors tobe defined.)

Use the conceptual projectlocations to define theproject scope.

Define the WBS to an arealevel.

Start a facilities description.

Complete the conceptualbattery limit locations andquantification.

Form a preliminary view oftie-in requirements andplant shutdownrequirements.

Develop the preliminaryengineering and layouts for

each project option.

Freeze the project locationand plot plan.

Define the major equipmentand all WBS elementlocations.

Define the WBS to a facilitylevel.

Provide preliminaryfacilities descriptions.

Define the functionality

required of the WBSelements, the majorequipment and theexpected operating mode.

Define and quantifyservices, utilities and otherthings crossing the batterylimits. Define preliminarylocations for all ingoing andoutgoing connections.Identify major tie-ins, andstrategies forimplementation.

Freeze the site selection,plot plan and project layout.

Define the WBS to asystem level and, forcomplex projects, to asubsystem level.

Place all equipmentaccording to reasonablyexpected equipment sizes,and ensure theconfiguration is supportedby vendor data.

Freeze the generalarrangements forequipment layout andfacility, and get approvalfrom the client. Ensurelayout considers allelements of the PEP forexample modularization.

Ensure the mechanicalequipment list isapproaching frozen,pending the receipt ofvendor information fromFEL4.

Uniquely define all tie-insand cross battery-limit

services, process andutilities, and freeze theirscope. Get client approvalfor an execution plan fortie-in work.


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8. Process Plant Undertake engineering to define the physical implementation ofthe process plant, including:

Align the engineering design with proposed execution strategy Select and specify equipment

Select and specify materials

Define material and equipment supply sources

Select and specify a control system

Prepare process plant arrangements

Quantify materials and equipment requirements

Prepare a facilities description.

Complete project definitionto a conceptual level, with

detailed requirements tosupport the study defined inthe gate review checklist.

Complete project definitionto a preliminary status, with

detailed requirements tosupport the study defined inthe gate review checklist.

Complete project definitionto a final status, ensure it is

ready for detailed designand it fully defines the plantto be built. Provide thedetailed requirements tosupport the study, whichare defined in the gatereview checklist.

9. Site Developmentand Infrastructure

Undertake engineering to define the physical elements of sitedevelopment and the on and off plot infrastructure within theproject battery limits.

Definition of construction infrastructure is required for the

construction phase of the project which allows. Alignment the engineering design with the proposed PEP

Selection and specification of equipment

Selection and specification of materials

Definition of material and equipment supply sources

Selection and specification of a control system

Preparation of infrastructure arrangements

Quantification of materials and equipment requirements

Preparation of a facilities description

Complete the projectdefinition to a conceptuallevel, with detailedrequirements to support thestudy defined in the GateReview Checklist.

Complete thedocumentation to apreliminary status, withdetailed requirements tosupport the study defined inthe Gate Review Checklist.

Complete the projectdefinition to a final status,ensure it is ready fordetailed design and it fullydefines the facilities to bebuilt. Provide the detailedrequirements to support thestudy, which are defined inthe Gate Review Checklist.

10. Business

Systems4

Define and quantify:

The business systems required for project operation, e.g.office systems, document management, accounting, finance,maintenance, procurement and communications

The software, hardware, firmware and work systems requiredfor project operation and integration into the clients business

How the project systems will interface with those of the clientorganization

The work to set up and initialize the business systems

Provide a preliminaryassessment of business-system requirements; inparticular, unique

requirements.

Provide a definition ofbusiness-systemrequirements.

Develop a preliminarybusiness-systems plan,addressing technical-system requirements andbusiness processes.

Provide a detailedbusiness-systems plan,specifying the type ofsystems, interfaces,

training and maintenanceneeds.

4Systems to control the mining, process plant and attendant infrastructure should be defined as part of the definition of the scope of their associated WBS element. This item refers to

systems essential for integrating the project within the clients business, or to provide systems for the client to manage a business based on this project.


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11. ProjectSchedule

Define a schedule to reflect the:

Preliminary bid packaging aligned to the PEP, including

construction contracts Long-lead equipment and material procurement durations that

have been derived from budget quotes and are reflected in theschedule

Lead times on other packages derived from quotes or industrybenchmark

Construction durations derived from benchmark data forsimilar work adjusted to cater for macro labor productivity andregional conditions

Breakdown of work into disciplines driving and feeding fromthe procurement and construction contracts

Key milestones for items such as:

Approval milestones and project finance, and reviewexternal approval milestones that drive project progress

Completion of any outstanding field investigations andtest-work programs

Work and services to be completed by others to enableproject completion

Other milestones that might impede project progress Project review and approval.

Preliminary commissioning durations for the process plant,mine, on-plot infrastructure and off-plot infrastructure.

Identify progress reviews, and allow time for feedback on anyconceptual alternative and its impact on the cost and schedule.

Provide a Level 1 projectschedule, which shows for

each option: The established

milestones and goalsfor the project

The duration of themajor phases of theproject, which arelogically connectedtogether and sequencedinto:

FEL2 FEL3 FEL4, including:

area-based

summary engineering

procurement

construction

ramp-up.

Prepare a Level 25

schedule for the FEL2phase.

Prepare the basis ofschedule to document thedata and assumptionsunderpinning the scheduledevelopment.

Develop a Level 2 projectschedule for the FEL4

Execution Phase for eachoption.

Develop a Level3schedulefor FEL3 Phase

6

.

Prepare a basis ofschedule to document thedata and assumptionsunderpinning the scheduledevelopment.

Develop a Level 3 projectschedule for the FEL4

Phase, that: Is resource loaded

based on the FEL3Capital estimatemanpowerrequirements

Is aligned withpackaging andcontracting structures

Is able to be producedto match the WBS

Represents all projectdisciplines

Reflects completion of

CWPs.Prepare the basis ofschedule to document thedata and assumptionsunderpinning the scheduledevelopment.

5Refer to PLP-610-020-0001 Project Planning and Scheduling Discipline Guide

6Refer to PLP-610-020-0001 Project Planning and Scheduling Discipline Guide


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12. CapitalCost

Estimate7,8

Define the:

Material and equipment quantities required for construction of

the project for: On plot mine On plot process plant On plot site development and infrastructure Off plot site development and infrastructure.

Where options are carried to phase completion estimatesshould be provided for all surviving options at the completionof the phase with clear definition of which option is the basecase.

Budget prices for major equipment supply sourced frommultiple vendors

Project indirect costs for:

Clients cost EPCM services cost

Escalation if it is in scope Risk provisions Contingency.

Provide a Hatch Level 1 orAACE Class 4 or 5 cost

estimate, supported by adetailed basis of estimatedocument and attendantback up materialssupporting the estimate.(The estimate is usuallybased on historical andbenchmark data factored tosuit, project location, scopeand time frame.)

Provide a Hatch Level 2 orAACE Class 3 capital cost

estimate for each option,supported by a detailedbasis of estimate documentand attendant back upmaterials supporting theestimate.

Provide a Hatch Level 3 orAACE Class 2 capital cost

estimate, supported by adetailed basis of estimatedocument and attendantbackup materialssupporting the estimate.

The estimate isunderpinned by:

Substantial engineeringdefinition for the project,up to 40% of the totalengineering effort

Quantity take-offs

Vendor quotes

Realistic assessment of

expected construction

Guia Gestion de Proyectos- HATCH

Documents

Transcript of Guia Gestion de Proyectos- HATCH