INTERVIEW: Worley launches global initiative to fast-track critical minerals projects

Worley, a global provider of engineering and management solutions for the energy, chemicals and resources sectors, is launching a 12-month industry-wide initiative -- the Capital Matters -- inviting miners, consultants, financiers, OEMs and other players across the mining value chain to collectively plan for fast-tracking project delivery and future-proof innovative technologies, Darryn Quayle, Worley's vice president, told Platts, part of S&P Global Energy, in an interview.

The Capital Matters initiative aims to make on-time and on-budget projects the norm again; this has not been the case for 15 years, which has undermined investors' confidence, Quayle said.

Investors' sentiment

Only one in six mining projects is completed as planned. On average, projects cost 50% more than initially estimated and begin production several years late. To mitigate these risks, investors either demand higher returns, wait until the project is completed before investing, or choose to invest elsewhere. Consequently, less capital becomes available for developing new mines, according to Quayle.

The industry often completed projects ahead of schedule and under budget, occasionally leading to situations where contractors reimbursed miners, he said.

Quayle observed that the 2008 global financial crisis led to a shift in the industry, as many experienced project managers departed or retired, resulting in less experienced individuals stepping into those roles.

Projects pace

He said there were several repeatable patterns in projects from decades ago: once they broke ground, companies minimized changes and stuck to the plan, owners and contractors worked as partners, solving problems together rather than fighting, and decisions were made with minimal bureaucracy.

"Today, many of those practices have weakened. Initial plans can be overoptimistic or in flux, and mid-course design changes have become common. Owners and contractors often operate in silos, and there's more red tape. Project managers spend as much time on reports as on problem-solving. Put stricter regulations and high community expectations on top of that, and it's no surprise that projects struggle," Quayle said, and added that all of the above stem from the chronic lack of trust, which the Capital Matters global roadshow will try to reinstate.

Certain challenges to innovation, invention and productivity arise because interactions between OEMs, plant engineering and mining companies are overlaid with governance and checks and balances. "If we could trust each other more, we could rip some of those off and move faster," he said.

The effort comes at a time when governments are expecting a steep increase in the supply of copper, battery metals, rare earth elements, and other critical minerals to fulfill their energy transition plans and mitigate supply security risks.

The International Energy Agency projects global demand for materials as lithium, cobalt, nickel and copper to double by 2030.

People might disagree on whether the energy transition will be successful or progress as quickly as forecasts suggest, but just one other phenomenon -- AI and data centers -- will suffice to underpin the growth targets, according to Quayle.

Minerals cost

"As some countries in the world continue to grow economically, more people will have access to better incomes, which means they will be able to acquire more consumer goods, but as a consequence, the world will need more minerals now and in the future than in the past," said Mike Placer, Americas sector lead for mining, minerals and metals at Worley.

"Unless we find, replace, and/or produce more, their prices will increase. The reality is that available ore bodies have become more complex, and permitting new operations is more complex than ever. The ecosystem of stakeholders is bigger and more influential than in the past. They are rightfully demanding more benefits and better transparency," Placer said, summarizing the changes as positive, but adding complexity in execution, which, in a capacity-constrained environment, is a recipe for added costs and ultimately higher metal and related goods prices.

On Dec. 8, the London Metal Exchange copper benchmark rose to $11,635.50/mt, the highest level on record.

Risk of being early adopters

The industry might already have technologies that can rectify this by expediting the mining and processing of minerals while also transforming their energy and environmental footprints, according to Quayle.

"Take tailings. For over a century, the solution has been to store that as a liquid slurry behind land embankments. These vast waste impoundments are permanent liabilities that require monitoring long after the mine closes," Quayle said. "What if we didn't have to bring so much waste to the surface in the first place? What if we considered in situ leaching or recovery? If, instead of digging rock out of the ground and hauling it to a metallurgical plant, we develop underground mines that blast the ore body, and circulate a biodegradable, non-toxic solution, and then pump that to the surface."

While in situ techniques are not universally applicable and require careful measures to protect groundwater, they hold significant potential. Yet, no one wants to be the first to test a new approach on a $1 billion project and possibly fail, Quayle said, adding, everyone wants to be the second, after someone else goes first and proves it.

The caution is understandable at an individual project level, but collectively, it holds the industry back, binding it to old methods that can be improved only incrementally, but Capital Matters is inviting peer companies to jointly test and promote first-of-a-kind innovations, as together, they could find a process by which no one particular company takes much risk, said Quayle.