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First, a question
Why do most mining projects fail?
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The problem, in the industry's own numbers
In a capital-constrained industry, where is the money actually lost?
ERM studied 72 major mining capital projects. 46% missed their delivery date between 2008–2016. These are the causes the delayed projects cited.
3Technical challenges
vs
112Social licence & permitting
Causes cited per 100 delayed projects
People, permits and the environment were cited 37 times as often as the rock. The geology gets two hundred pages of diligence. The people get two paragraphs.
US$20M a weekA world-class mining project with capex of US$3–5 billion loses roughly US$20 million per week of delayed production in net-present-value terms (ERM, 2018, p.6).
Delays to 72 major capex projects · 2008–2016% of delayed projects · non-exclusive
Social opposition42%
Environmental concerns35%
Commercial issues35%
Permitting issues23%
Land access6%
Revenue sharing6%
Health & safety6%
No details available6%
Extreme weather3%
Technical challenges3%
72 projects · 33 delayed (46%) · 2008–2016. Hover or tap a cause. Causes are non-exclusive, so the shares do not sum to 100.
Source: ERM, New Realities Facing the Mining and Metals Industry (2018), p.6 — Causes of delays to mining projects.