Feasibility Studies Are Only As Good As The Attention Paid to Data Collection

SRK has been involved with multiple projects in India that involved feasibility studies. These projects included advising on requirements, preparing studies and reviewing earlier studies.

SRK has recently completed a feasibility study for Balasore Alloys’ underground chromite mine in Orissa that will sit below its existing Kaliapani open pit operation. SRK has added multiple dimensions to the feasibility study of their underground plan. For example, understanding the structural complexity due to multi-phase tectonic deformations, SRK advised generating subsurface rock mass data from oriented cores. With this, SRK could capture and visualise rock defects to develop more precise models. Also, groundwater investigation characterised different aquifers intersecting open pit and underground areas.

SRK has been involved with multiple opencast coal projects that required engineering analysis or review of feasibility studies done by other organisations. With the easy blocks already targeted and exploited, most new blocks are either deep or structurally complex. Some mines face the lack of available space for waste dumps. Another confronted a river flowing through the lease that was simply diverted without appropriate study of hydrology and geotechnical considerations. SRK recommended generating robust geotechnical data to support a large open pit and backfilling option, and a study design on hydraulics, hydrogeology and geotechnics to divert a significant river flowing across the block.

In general, SRK’s experience shows that such studies were conducted mainly at the desktop level for permitting purposes, whereas significant engineering study and design efforts are required for implementation. While some commissions have been challenging, a few projects are encouraging for the Indian mining industry, especially start-ups. With regards to OPGC’s Manoharpur opencast coal block planned for Orissa, OPGC is reviewing multiple business models suitable for the coal blocks. While this takes time, OPGC wants its mine to meet international standards for safety, environment, productivity and quality.

There are no precise practising guidelines in India governing how a company should develop a feasibility study. Instead, many companies rush through the steps to quickly secure statutory permits and hand over the project to the contractor, but this potentially has negative consequences and also sometimes means missing opportunities. Mining companies need to approach feasibility studies in a deliberate linear fashion. The weakest link remains the quality and quantity of data. Often, there is no clear understanding of where to obtain data, how to use it, and how to include it in reports.

SRK recommends careful design of data collection to ensure that the results can be defended. The temptation to take shortcuts can have exactly the opposite effect: producing a dataset that cannot provide scientifically defensible conclusions. Skipping steps can ultimately delay projects and increase costs. Beyond the actual monetary cost, what is lost is the opportunity to allocate resources to more worthwhile projects.

Subrato Ghosh: sghosh@srk.com

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