Accenture: Mining and Metals Companies Could Save Billions on Capital Projects

By Rob Starr, Content Manager, Big4.com

Faced with delays and budget overruns – which can add billions to total project costs – mining and metals companies could significantly reduce the cost of large capital projects by improving planning and addressing workforce shortages, according to Accenture (NYSE: ACN) research on capital projects delivery in the mining and metals industries.

Accenture research estimates that metals and mining expenditures for capital projects will reach more than U.S. $140 billion in 2012¹, and between U.S. $1 trillion and U.S. $1.5 trillion during the period from 2011 to 2025². Even with the current downturn in commodity prices, long-term demand for minerals and metals, driven by economic growth and social development throughout the world, continues to spur investment in mining and metals. With $100 – $200 billion in annual spend, the impact of project delivery overruns on individual companies and the industry as a whole is enormous.

The research was based on 31 interviews with mining and metals executives with responsibility for capital projects around the world. Less than a third (30 percent) of the respondents report staying within 25 percent of approved budgets for all projects, and less than a fifth (17 percent) said they completed all projects within a 10 percent budget range.