Not all projects run smoothly. In fact, many of them have challenges that can cause even the most seasoned project manager to question his or her career path and long for a relaxing week away from it all.
Of course, that's what makes a life in the minerals industry interesting. It’s also about understanding the importance of delivering to customer satisfaction even when the task at hand seems impossible and requires devoting everything to making it succeed.
One recent multimillion-dollar project not only gave everyone a run for their money, but proved the importance of superior project management. It turned what could have been potentially detrimental into a successful and timely startup, with accolades for a job well done.
Freeport-McMoRan Inc. (FCX) has long been a key account for FLSmidth and we have worked together in a number of locations on large and small projects for the extraction and processing of copper, gold and molybdenum. Headquartered in Phoenix, Arizona, FCX operates mines in North and South America, Africa and Indonesia.
Building a lasting relationship
In 2006, FLSmidth started working with FCX’s Cerro Verde open-pit copper and molybdenum mine, which is located approximately 20 miles southwest of Arequipa, Peru. At that time, FLSmidth provided much of the equipment for Phase I, including the primary gyratory crusher, flotation cells, thickeners and cyclones. Production put locals to work in manufacturing being completed in the Peruvian region, and the FLSmidth team onsite helped supervise construction and prepare the plant for startup.
Cerro Verde has been a successful plant ever since, processing 120,000 MT of sulfide ore per day through its concentrator. So when it came time for product unit expansion, FCX and EPC-company Fluor looked to FLSmidth for its expert product knowledge and complete concentrator flowsheet offerings.
Approved in December 2012 and permitted two months later, construction on Cerro Verde’s Phase II expansion plant was soon started in March 2013. A target startup date was set for September 1, 2015. This aggressive schedule would bring the plant to maximum capacity production in 2016. Once the expansion is complete, Cerro Verde activities will bring the combined concentrator facilities’ capacity to an incredible 360,000 MT of ore per day.
Everyone was eager to get the project going which is a massive undertaking by any standards.
Cerro Verde Phase II Project facts*
- 41 million m3 of cut and 35 million m3 of fill
- 320,000 m3 of concrete
- 50,000 tonnes of structural steel
- 4,500 tagged items of equipment and 4,800 tonnes of platework
- 300 km of pipeline
- 1,500 km of power cable and 1,200 km of control cable
- Peak labor of 18,000 people and 70 million m/h
*Facts shown are for the complete expansion, of which FLSmidth is a part.
Consider all the implications of such a huge project and you have a logistical nightmare: coordinating suppliers, ordering to the right specifications, controlling the quality of manufacturing, ensuring on-time delivery, construction… the integrally detailed list goes on. With so many balls in the air, it's easy to see how focusing only on one can cause others to quickly spin out of control and end up in places that weren’t initially intended.
The year 2014 brought many obstacles to the Phase II project, which created quality and control issues and ultimately delayed the schedule several months. It was not a good reflection on FLSmidth after we had shown our worth and won this project because of our performance on the Phase I implementation.
Turning it all around
No matter what the excuse, FLSmidth management knew that something had to be corrected—and fast. We are the biggest supplier in the flowsheet with over $120 million of equipment being constructed. This was all part of the bigger multibillion dollar expansion being overseen by Fluor.
“We needed to get the project back on track to fulfill customer expectations and deliver within the promised timeframe. Our reputation was on the line," said Steve Altman, FLSmidth’s Key Account Manager. "That meant not only installing the equipment but drastically speeding up the whole schedule—all keeping quality and safety in mind.”
Superb and calculated project management became the key to achieving what could have been an impossible task. Although procedures and people were already in place, Altman approached Fluor and FCX management about positioning an FLSmidth site manager onsite to take better control of the situation. They agreed, and in December 2014 one of FLSmidth’s top Site Managers—Saad Ibrahim—was strategically transferred to Arequipa, Peru. There, he was able to work alongside Project Manager Tulio Chacon (from FLSmidth's Peruvian offices) and his operational and logistical teams; and to continue coordination with Marc Schaerer, FLSmidth senior project manager, and the Salt Lake City-based project and product line management teams.
Ibrahim was just completing an exciting installation project in Morocco and has been instrumental in the success of FLSmidth's projects for more than 40 years. His exemplary hands-on experience and focus on detail was immediately put to the test as he, Chacon and Schaerer reassembled their teams and initiated a more efficient working relationship with suppliers, construction personnel, finance and management at the Cerro Verde expansion site.
Plan, communicate, question… be tough!
The pressure was on. When schedules aren’t being met, there tends to be a lot of finger pointing since delays escalate costs. First on the agenda for Ibrahim and his team was planning and re-establishing clear and constant communication. He wasn’t overwhelmed by the enormity of this project because his background and experience in manufacturing allowed him to understand the reality of what is needed and how long it takes to get the job done.
Erection of equipment had been delayed due to the equipment not being delivered on time. Fabrication was being handled by local suppliers in Arequipa, so Ibrahim decided to visit the supplier shop every day.
“The major problem was that [the suppliers] were saying what we wanted to hear but then they didn’t deliver. Everything was late. This makes us all look bad, so we asked that they let us know the reality so we could plan accordingly,” Ibrahim said. "My manufacturing experience told me it would take longer, so I would call them out. When they understood that we knew what we were doing, they would respond with a more accurate schedule.”
Suppliers were told they had to perform and give updates on exactly where they were on completing tasks. Ibrahim said. “For example, we were able to educate the suppliers on how to manufacture the equipment in better and more efficient ways. We brought them into FLSmidth’s Salt Lake City and Arequipa facilities for training sessions on how to build flotation cells.”
This not only helped with the project at hand, but increased skills and competency with the local workforce.
Once accurate supplier communication was implemented and the equipment delivery schedules were updated, construction personnel were more effectively managed and scheduled to work on the parts that were ready—while planning accordingly for what was coming next.
“Our planning looked at least three weeks ahead," Ibrahim said. "If thickeners were coming, we’d make sure the center column, feedwell, bridge and other equipment parts were there ready. If not, we worked on something else to keep the project progressing.”
FLSmidth equipment installed at Cerro Verde Phase II
- 10 apron feeders
- 2 primary gyratory crushers
- 22 vibrating screens
- 11 cyclones
- 69 flotation cells
- 28 moly flotation cells
- 5 concentrate thickeners
- 4 tailings thickeners
- 6 conveyor shuttle heads
Predict issues and preemptively attack
When you have one company engineering, another fabricating, and another erecting you're going to see inconsistencies. That could mean lost time, incompatible parts, inefficient functionality and added cost.
“We looked for potential issues ahead of time so our local FLSmidth project teams could include the product line managers in discussion of how to correct the problems," Ibrahim said.
"Conference calls and visits with our local and global experts gave us the additional experience and added benefit of resolving problems and integrating everything properly.”
Finances also have to be kept under control. When a part reaches the site and doesn’t fit, what cost $10 in the workshop now costs $100 in the field. This could be a design or manufacturing issue, or wrong items supplied—like a wrong valve. And it doesn’t just happen once on such a large scale project. Costs escalate quickly and cut deep into profits. For example, Cerro Verde’s Phase II includes the installation of 69 FLSmidth flotation cells. Chances are that if you receive a wrong part for one cell, you'll receive that same wrong part for all 69 cells.
Verifying inventories and taking control of pending backcharges help a company to come away from a project with a better profit margin.
"We had to take initiative and go back to suppliers to charge them for their mistakes," Ibrahim said. "Questioning construction charges for lost time or equipment rentals for cranes, etc. that were already onsite meant we could avoid duplicate billing and negotiate for better rates."
Ibrahim quickly established himself as the boss, and he dictated what procedures needed to be followed to make a backcharge claim to FLSmidth. As Site Manager, Ibrahim said he "was FLSmidth" and that if anyone needed something, they should go to him for approval. If approved, he would make sure the invoice would get paid. Making sure everything was done correctly upfront helped to minimize these types of claims.
“What could have been millions of dollars of backcharges hitting FLSmidth ended up being settled in the tens of thousands instead,” Ibrahim said with a satisfied grin.
As promised… on-time!
Amazingly, after being months behind schedule only nine months before, the FLSmidth project management team and all involved from FLSmidth’s local Peruvian and Salt Lake City offices achieved an incredible feat. On 1 September 2015, FCX, Fluor and FLSmidth personnel were proud to witness the first ore (from crusher to mill) at an on-time startup. First copper (from flotation cells to thickening to filtration) was achieved on 17 September 2015, as scheduled. The second line started up in November 2015 with both lines of FLSmidth equipment working with no problems. The moly plant has been in construction and, as of the publishing of this article, should now be completed with the whole Cerro Verde plant working to maximum capacity in early 2016.
During commissioning, one of Fluor’s Commissioning Managers, Fernando Villarreal, looked at Ibrahim and Chacon and said: “It’s boring working on FLS equipment; there are no issues to complain about. All equipment runs well.”
And most appreciated, site and project management understood the scale of this project and what it took to turn it around to become a successful startup.
“FCX has been able to accomplish this outstanding goal because of the people involved throughout the project. It has not been easy and many challenges were presented along the way," said Dave Dicaire, Project Director, Cerro Verde Production Unit Expansion. "The CVPUE Team tremendously appreciates all the work and effort put in to meet this major goal... We feel proud of what has been achieved and this is because of great leadership, teams and companies such as yours.”
“Our combined FLSmidth team came through and did not let the customer down," Ibrahim said. "My hat is off to everyone that has been in the field and contributed to the success of this project. I express my appreciation for the encouragement and support in helping keep the project on schedule and achieving the successful startup of a huge plant.”
CONTACT: Saad Ibrahim