DetailedprocurementplanforAynakandAmuDarya PROGRESSREPORT#1 …documents.worldbank.org/curated/en/329031468196439822/... · 2016-07-16 · Construction Material . Services / Labor

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AFGHANISTAN RESOURCE CORRIDORPRIVATE SECTOR DEVELOPMENT

Detailed procurement plan for Aynak and Amu DaryaPROGRESS REPORT #1

31st March, 2012

Copyright 2012

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EXECUTIVE SUMMARY

• Aynak and Amu Darya represent an immediate opportunity for the Afghan economy to trigger private sector development

• Development phase of both projects are opportunities for the Afghan construction and civil works sector

• Regarding Aynak: – ~$500m could be injected into the Afghan economy during Aynak project development (20MT ROM scale),

mainly driven by construction and civil work activities (equipment, labour, consumables) – An additional $400m could also be invested in the mid-term through local companies in key sectors needed

during project development (steel structures, piping, etc.) – In the long-term, a large share of operational expenditures to manage the mine, process the ore, and operate

the power plant could be sourced locally » Efforts to develop the foundry industries and technical explosives needs to be undertaken; it is realistic

as some of these industries have been developed in similar environments (Mauritania, Algeria, etc.) » Fuel supply and management also represents a large share of activity

• Regarding Amu Darya

– ~$150m could be injected in the short-term, also driven by construction and civil work activities – An additional ~$130m could be triggered locally if pumping equipment and drilling operations are developed

in the mid-term – In the long-term, a large part of operations could also be supplied locally, as already achieved in similar

environments (Chad, Angola, Gabon, Algeria)

Once operating, Aynak mostly represents opportunities for Afghan companies able to supply consumables related to mining operations and life-support

Once operating, Amu Darya represents minor opportunities for Private Sector Development in Afghanistan

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Once operating, Aynak mostly represents opportunities for Afghan companies able to supply consumables related to mining operations and life-support

SUMMARY - AYNAK CAPEX & OPEX PER CATEGORY

Cat.1 Cat.2 Cat.3

CAPEX

OPEX

Millions USD

Consumable

Services/Labor

Maintenance

100-150 100-150 150-250

Bubble size is proportional to expenditures

Equipment

Construction Material

450-700 400-700 1100-1600

4

Once operating, Amu Darya has marginal category II opportunities, thus representing minor opportunities for Private Sector Development in Afghanistan

SUMMARY - AMU DARYA CAPEX & OPEX PER CATEGORY

Cat.1 Cat.2 Cat.3

CAPEX

OPEX

Millions USD

Services/Labor

Maintenance

Consumable

50-100

10-20 20-30

Bubble size is proportional to expenditures


Equipment

150-300 200-400 100-200

AGENDA

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1. Procurement plan approach

2. Aynak and Amu Darya projects key figures

3. List of prioritized categories

4. Zoom on technical categories to support suppliers discussion

5. Annexes • Benchmarks • Procurement plan models

6

Definition of Aynak and Amu Darya projects’ potential procurement plan

• Benchmarking industrial development generated in contexts similar to Afghanistan, in terms of industrial capability

• First insights on goods and services easily outsourced by mining and oil & gas companies in similar industrial contexts

Benchmarks of local content and induced development triggered by mining and oil & gas projects in similar industrial contexts

• Definition of the projected industrial set-up for Aynak and Amu Darya

• Breakdown of projects’ set-up by main activities / competencies (Capex / Opex)

• Sizing of the individual competencies required

1. GENERAL APPROACH

Aynak and Amu Darya procurements plans have been developed based on available information. Gaps have been covered through international benchmarks and interviews

Categorisation of the individual competencies into the 3 categories defined in the TOR

7

1.APPROACH - PROCUREMENT PLAN DESIGN

The design of both procurement plans aims to develop homogeneous categories in terms of local content approach

Services / Labor

Equipment


Services / Labor

Consumables

Maintenance

Development

Operations

Asset 1 Asset 2 X Asset …

• Based on benchmarks, mining operations (excluding smelting / refining activities) can generate between 50,000 to 100,000 procurement events

• Oil&Gas upstream operations can encompass between 10,000 to 20,000 procurement events

⇒ The detailed procurement plan will try to capture key subcategories (that could themselves encompass different procurement events)

Procurement plan breakdown structure

Level of detail for the procurement plan

8

During the project lifecycle, 3 milestone reviews are conducted by mining companies. CAPEX/OPEX can vary by up to 50% in the “scoping study” phase alone.

1.APPROACH - PROCUREMENT PLAN SIZING

Scoping Study

Pre-Feasibility Study

Feasibility Study

Error tolerance

100% -50% +50%

100% -20% +20%

-10% +10%

Procurement plan sizing range

9

• According to World Bank reports, the local procurement preference consists of varying

combinations of the following three elements: – Participation of citizens in

» Employment » Management » Ownership of mining supply activities.

– Extent of value add taking place locally, along the continuum of raw materials sourcing, manufacturing or production, and sales, distribution and associated services: “local sourcing,” “local content.”

– Distinction in terms of geography between the area immediately surrounding the mine—“local local” or “community content”—and at a subnational level—“regional content”, or more widely at a national level.

• Qualification of suppliers will be a continuum based on different criteria, integrating local procurement definition as well as capability and competitiveness elements

1. APPROACH – CLASSIFICATION OF PRIORITY CATEGORIES

Source: World bank report “Increasing local procurement by the mining industry in West Africa”

Local procurement definitions consist of a combination of factors to rate the value-added content captured from extractive investments

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• Thomas Loffet, Project Manager for Oil&Gas operations (active in Mozambique, Ghana) Bolloré SDV

• R. Herrenschmidt, Former Head of BP refineries in France (Dunkerque, Lavéra), Independent Consultant

• D. Di Pace, former head of BP Group for refining activities optimization, Independent Consultant

• Christophe Du Rotois, Reservoir Engineer, Perenco • P.L. Migairou, Mining Engineer active in coal and copper, former Anglo-American • A. Dissaux, Hydrometallurgical manager, Process and Engineering – Eramet Group • J. J. Reverdy, Industrial Manager, Eramet Nickel Division

1. APPROACH – INTERVIEWS CONDUCTED

A selected number of experts have been interviewed in order to fully grasp the scale and scope of activities and estimate the size of the procurement plan

AGENDA

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• In this report, figures used for the sizing of category items rely mainly on international benchmark and interviews

• CVA has done its best to benchmark similar environments in order to capture the effects on Afghanistan

– Mauritania

– Indonesia

– Etc.

• An overall cross-check of main figures has been done with available information on Aynak and Amu Darya projects

• Interviews have been conducted in order to ensure robustness of figures and selection of categories I and II

• Modifications from the assumptions drawn from available information would impact the sizing of the different categories

2.CAVEATS

13

2. 1. KEY FIGURES AYNAK - CAPEX

Aynak project should quickly present opportunities for the Aynak area in terms of labour and materials.

Power Plant

300-550

Electric line

300-550

Mining & Refining of copper

1,350-1,850

Water pipeline

20-40

Equipment

1,000-1,500

Labour/Services

650-950

350-550

Material

CAPEX breakdown per asset ($m)

CAPEX breakdown per expenditure type ($m)

69% 15% 15%

1%

33% 50%

17%

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2. 1. KEY FIGURES AYNAK - OPEX

Operations at mine and power plant should drive the opportunities for labour, services and consumables

Water pipeline (20-30km)

Power Plant (400MW)

200-400

Electric line (300km)

5-10

Copper Mining and Refining

350-450

0-5

Maintenance (excl. Labour)

150-200

Consumables

400-600

Labour/Services

40-80

OPEX breakdown per asset ($m)

OPEX breakdown per expenditure type ($m)

53% 45%

68%

25% 7%

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2. 2. KEY FIGURES AMU DARYA - CAPEX

Amu Darya CAPEX will be driven by the number of wells. Labour & materials will represent 2/3 of full CAPEX.

50-100

150-200

Refinery investment (Turkmenistan)

Civil works

400-750

Transportation

5-10

Refinery Oil Drilling & Production

200-400

Equipment

150-250

Labour/Services Material

100-200

CAPEX breakdown per asset ($m)

CAPEX breakdown per expenditure type ($m)

33% 66%

44% 33%

23%

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2. 2. KEY FIGURES AMU DARYA - OPEX

Operations at refinery could represent an interesting opportunity for Amu Darya Region

Refinery

10-20

Oil Drilling & Production

90-180

Transportation

10-20

Maintenance (exc. Labor) Consumables

30-60

Labor / Services

50-100

30-60

OPEX breakdown per asset ($m)

OPEX breakdown per expenditure type ($m)

80%

10% 10%

46% 27% 27%

AGENDA

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Aynak will quickly represent an opportunity for local procurement during the investment phase; an important share of operating expenditures could be sourced locally in the medium term.

3.1. CLASSIFICATION OF AYNAK PROCUREMENT PLAN CATEGORIES

Non Recuring Recuring Non-Recurring Costs (CAPEX) (m$) Recurring Costs (OPEX) (m$)

Cat. III

1,100-1,600

500-700 400-700

Cat. II Cat. I

300-500

Cat. I

100-150

Cat. III Cat. II

150-250

71%40%

14%

69%

12%

100%


Equipment

Services / Labor

Cat. III

1,100-1,600

31%

Cat. II

400-700

16%

Cat. I

500-700

48%

67%

93% 83%

27%

8%

Maintenance Consumables

100% Services / Labor

Consumables

150-250

Cat. III Cat. II

300-500 9%

Cat. I

100-150

4%

25% 20%

55%

18%

55%

27%

# of sub-cat. (Approximation)

(27) (14) (39) # of sub-cat. (Approximation)

(15) (12) (16)

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3.1. PRIORITY CATEGORIES – AYNAK

Focusing on 10 priority Category 1 items and 3 priority Category 2 items, we cover more than 50% of “actionable” Capex and 60% of “actionable” Opex

Non-Recurring Subcategories (CAPEX) $m; based on lower range estimates

Recurring Subcategories (OPEX) $m; based on lower range estimates

1. Construction equipment (all sites) ~$165m 2. Civil works & concrete labour (all sites) ~$95m 3. Transportation & hauling ~$50m 4. Construction Labour – road & building ~$30m 5. Concrete ~$20m 6. Painting ~$10m 7. Electric board ~$5m 8. Pumps for plants operation ~$5m 9. Sand / stone ~$5m 10. Bitumen ~$5m

Cat.1

1. Metallic piping $70m 2. Steel structure $60m 3. Electric cable $50m

Cat.2

1. Fuel $50m 2. Spares for light vehicles $3m 3. Limestone $3m 4. Medical products $2m 5. Protection equipment $1m 6. Clothes, food and appliances $1m 7. Supplies (valve, piping, etc.) $1m

Cat.1

1. Coal $180m 2. Ammonium nitrate/explosives $20m 3. Wear parts (foundry) $15m

Cat.2

~$390m 75% coverage

~$180m 45% coverage

~$60m 60% coverage

~$215m 70% coverage

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Amu Darya also represents a short-term opportunity for local procurement; the refinery and well operations represent a long-term opportunity for the region

3.2. CLASSIFICATION OF AMU DARYA PROCUREMENT PLAN CATEGORIES

Cat. III

100-200

Cat. II

200-400

Cat. I

150-300

Cat. III

0-50

Cat. II

0-50

Cat. I

50-150

39% 39%

12%

46%

32%

8%

150-300

49%

100%


Equipment

Services / Labor

Cat. III

100-200

29%

Cat. II

200-400

46%

Cat. I

48%

14%

50%

18%

41%

Cat. II

0-50

50%

Cat. I

50-150

41%

100%

Maintenance Consumables

Consumables

Services / Labor

Cat. III

0-50

38%

Non-Recurring Costs (CAPEX) (m$) Recurring Costs (OPEX) (m$)

33%

45%

22%

60%

20% 20%

# of sub-cat. (Approximation)

(20) (24) (15) # of sub-cat. (Approximation)

(20) (8) (5)

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3.2. PRIORITY CATEGORIES – AMU DARYA

With 10 priority Category 1 and 3 priority Category 2, we cover a large share of Amu Darya “actionable” local procurement

1. Cement/Concrete $50m 2. Transportation & Hauling $20m 3. Equipment for civil works – Refinery $15m 4. Labor for civil works – Refinery $15m 5. Testing and analysis – Oil production $10m 6. Administration labor – Oil production $5m 7. Fuel & Power – Drilling $5m 8. Housing and catering – Drilling $5m 9. Environmental & Safety $5m 10. Water $3m

Cat.1

1. Operator – Drilling $70m 2. Pumping equipment $40 3. Civil works material – Refinery $20m

Cat.2

1. Fuel, power & Water – Oil prod. & Refinery $30m 1. Administration – Oil prod. $4m 2. Operators – Oil production $3m 3. Work over rig services $3m 4. Maintenance of tanker trucks $3m 5. Fasteners (nuts, bolts) $2m 6. Remedial services $2m 7. Automotive services $2m 8. Labor – Refinery $2m 9. Drivers – Oil transportation $2m

Cat.1

1. Small spare parts – Oil production $5m 2. Protection equipment $0.5m Cat.2

~$130m 80% coverage

~$130m 65% coverage

~$50m >90% coverage

~$6m >90% coverage

Non-Recurring Subcategories (CAPEX) $m; based on lower range estimates

Recurring Subcategories (OPEX) $m; based on lower range estimates

AGENDA

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4. Focus on technical categories to support suppliers discussion


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4. KEY CATEGORIES WITH DETAILED FOCUS

Labour and raw material like concrete or metallic structures represent the largest subcategory of items that the local economy could supply. A detail on technical products is described in the following slides

• Construction Equipment • Pumping Equipment • Engineering services • Explosives • Steel structures • Piping • Tanks • Foundry • Labor requirement

24

Construction equipment will be purchased or lease depending on the type of equipment and on MCC’s choice. Optimization of construction operations will impact the number of equipment used and the total cost.

4.1. DETAILED PROCUREMENT PLAN ON CONSTRUCTION EQUIPMENT – (1/4)

• Perimeter – Mining & Processing plant – Transmission line plant – Power plant – Water treatment plant & pipeline – Roads

Category articles - illustration of product typology

• Earth moving equipment − Wheel loader, excavator… − Crawler dozer − Grader − Dragline − Scrapper, etc.

• Stakes – $100 to $200m of expenditures for

leasing/purchasing of construction equipment, utilization of machinery and transportation during the entire project.

– Potential leverage for other construction projects in Afghanistan

• Paving equipment & concrete wall equipment − Asphalt pavers − Concrete pavers − Curb & gutter pavers − Cold planers & milling machine − Tandem vibratory rollers − Soil stabilizing equipment − Concrete pumps, etc.…

10

10

Number of equipments used for each Aynak project piece (forecasted numbers based on assumptions and interviews. They might differ from MCC choice)

25

The major part of construction equipment will be for framing, wall and foundation construction.




• Frame construction equipment − Tower cranes − Rough terrain cranes / Heavy cranes − Scaffolding − Aerial work plateform − Etc.

• Trucking − Medium & heavy duty trucks − Trailers − Mixer trucks − Mining truck − Telehandlers − Drills − Etc.

27

34


26

Few equipment will be used for specific construction activities like transmission line of underground works.




• Specific transmission line equipment − Puller tensioner − Insulated bucket trucks − Etc.

• Underground Work − Pipelayers − Tunnel mining machines − Etc.

• Other specific equipment − Heavy lift helicopter − Water truck − Explosive truck − Fire truck, ambulance… − Etc.

2

2

15


27

Many diverse light construction equipment will be used on every construction site.




• Light equipment − Electric generator sets − Hydraulic power pack − Jackhammers − Portable light towers − Portable air compressors − Concrete saws − Hydraulic tools − Water pumps − Vibratory plate compactors − Formwork − Etc.

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Pumping equipment are used for many applications in multiple industries. Capabilities developed for Aynak and Amu Darya could easily be re-used elsewhere.

4.2. DETAILED PROCUREMENT PLAN ON PUMPING EQUIPMENT

• Perimeter – Lot of different pumps will be required during the

development phase as well as the production phase for Aynak and Amu Darya Project.


• Few standard for pumping equipment in Oil industry − API Standard 610, 674, 675, 676, 68, 682…

• Stakes – More than $55m of pumping equipment for

Aynak and Amu Darya projects

• Several types of pumps exist: − Horizontal pumps − Vertical pumps − In line pumps − Submersible pumps − Slurry pumps − Etc.

• Pumps are used to create pressure or move: − Water − Air − Fluids − Oil − Cement − Etc.

29

EPCM services for big mining project are usually done by major specialized EPCM companies that integrate the activities of all contractors and subcontractors, being the single point of contact for the client.

4.3. DETAILED PROCUREMENT PLAN ON EPCM SERVICES

• Perimeter Full project scope – Engineering – Procurement – Construction Management

Category services

• Project management services − Project Management − Contract Management − Corporate Governance / Insurance − Project Audit / Review − Project Controls − Etc.

• Stakes – 150 to 250 million dollars from preliminary study to

plant commissioning – Indivisible package of services – Great expertise required

• SNC Lavalin • Jacobs • Fluor

• General construction services − Construction Management − Etc.

Several major EPCM companies for Mining / Oil industries

• Amec • Ausenco • Etc.

• Operation & Technical services − Mechanical & Electrical engineering − Civil/Structural engineering − Process engineering − Instrumentation engineering − Etc.

• Quality, Safety and Commissioning services − QA/QC Management − Safety Management − Commissioning Engineering − Etc.

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Explosives are a key consumable for mining operations, encompasses 4 main technical products, specific labor for blasting operations could be developed

4.4. DETAILED PROCUREMENT PLAN ON EXPLOSIVES – CONSUMABLES (1/2)

• Perimeter –Explosives encompasses all consumables required for the blasting of rock used during mining operations

–Politically sensitive, some explosives are currently available for aggregate blasting using low-tech products

Category articles

• POROUS PRILL AMMONIUM NITRATE (ANPP) − Main category ~25mt per year

• Stakes – $20 to $25m per year of

recurring business – Potential leverage for many

other sectors (civil works, other mines, roads)

• Electronic detonator and associated softwares − Eg.: Carrick® Statsafe® from AEL Cy.

• Aluminium granules − Used as a fuel in blasting agents − E.g. US Granules corporation products

• Emulsion: E.g. Energan product from AEL Cy.

NH4 NO3 concentration >98.6% Total Nitrogen concentration >34.5% Insoluble in water <0.8% humidity H2O<0.2% PH A 20 D>C> (SOLUTION 10% 4.5A6 acidity HNO3 <0.01 Coating: MINERAL ANTIMOTTANT: Organic composes organic <0.09% Test D'abel @ 80 D.C.>1H Density Versement 0.67+-0.03 FIOUL retention capacity >11%

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Operations for blasting could have a large part of local content

4.4. DETAILED PROCUREMENT PLAN ON EXPLOSIVES – LABOR (2/2)

Head of blasting operations

ANFO plant - Production manager - Production assistant - Logistics - Warehouse

Maintenance

- 2 technicians - 2 operators

Blasting

- Production manager - 2 drivers - 4 operators

Finance

- Accounting

Logistics and purchasing

- Purchase manager

Administration

- Administrative assistant

HSE manager

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Steel distribution is core for Aynak investment, it can easily be leveraged for other sectors

4.5. DETAILED PROCUREMENT PLAN ON STEEL STRUCTURES

• Perimeter – Mainly unalloyed carbon steel for plant structures – Encompasses also some wielding consumables

• Stakes – $60m investment (non-

recurring) – Potential leverage for many

other sectors


• Flat profile steel – 50x10 – E24 NF A35-501 • Non alloyed carbon steel – diam. 160mm, grade A70, 6m long • Angle iron L 50x50x5 E24 NF A35-501 (>5000 MLN) • Angle iron L 60x60x6 E24 NF A35-501 (> 5000 MLN) • UPN 100x50x6, profile U E24 NF A35-501(>2000 MLN) • Heel anti-abrasive 40x40 Z120M12 (>2000 MLN) • Steel sheet 6x1000x2000, NF A35-501 (> 2000 MLN) • Tube 1’’ Tarif 10, TU E220A (>1000 MLN) • µTube ¾’’ Tarif 3, galvanized threaded (>3000 MLN) • Rod 37x68 – 500 HB (>200 PC) • H 200x200x15, HE24 (>200 MLN) • Cable DIA.2 MM NF35-551 (>2000kg)

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Piping is a large investment for Aynak

4.6. DETAILED PROCUREMENT PLAN ON PIPING

• Perimeter – Lot of different tubes with different diameters will be required for

sulfuric acid plant but also for all the processing plant

• Stakes – $70m investment (non-

recurring) – Potential leverage for many

other sectors


• Stainless steel, either 304L or 316L • Caan SS-304L X

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Tank construction and lining can easily be leveraged from Aynak development and re-used for other sectors

4.7. DETAILED PROCUREMENT PLAN ON TANK CAPACITIES AND TANK INTERNAL LINING

• Perimeter – Storage capacities will be required at Aynak for fuel, sulfuric acid,

copper ore leaching, liquid effluent treatment, caustic soda, raw water

• Stakes – $60 investment (non recurring) – Potential leverage for many

other sectors


• Wielded Steel Tanks for Oil Storage − API Standard 650

• Sulfuric acid tanks and lining − Mainly carbon steel:

www.sulphuric-acid.com

• Water tanks − Usually Bolted Steel Tanks − Industry standards: API, ASME, AWS, AWWA, NFPA,

UBC and UL-142

• Tank lining − Lining done with phenolic coatings

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Foundry for mining equipment wear parts as well as rebar casting represent a good opportunity to be further sized during detailed procurement plan

4.8. DETAILED PROCUREMENT PLAN ON FOUNDRY PARTS

• Perimeter – Replacement parts for mining equipment (shovels, scrapers,

bulldozers, crushers) are within the top 5 categories of mining consumables

– Various articles are required to serve the industry for replacement parts (teeth, blades, grinding ring, etc.), and technology required to produce these articles can vary from simple to complex

Category articles

• Wear parts for shovels, draglines, and bulldozers − Teeth / lips for buckets − Blades / Crawler shoes

• Stakes – $10 to $20m per year of

recurring business – Potential leverage for many

other sectors to develop foundry activity (construction, cement plant wear parts)

• Wear parts for crushers: − Grinding ring / liners

• Consumables for concentrator plant − Grinding media

• Steel for construction phase − Rebar casting

Need of ~xkt per

year

Need of ~ykt per

year

Need of ~ykt per

year

Need of ~ykt per

year

36

4.9. MINING OPERATIONS – LABOR (1/4)

Based on mining environments similar to Afghanistan, approximately 75% to 85% of the manpower could be sourced locally, representing 800 to 1,500 direct jobs and $15m to $37m/y

Non-Mine Mine Processing

General Management Management Management

Administration Technical services

Technical services

Human Resources Operations Operations

HSE Maintenance Maintenance

Services (incl. Utilities &

Infrastructure Maintenance)

Note: figures are based on international salaries for expatriates positions and on salaries of Mauritania-like countries for local positions

$1-2m

$2-5m

$1-2m

$2-4m

$3-10m

$1-2m

$3-8m

$2-5m

$0.5m

$0.5-1m

$2-4m

$1-3m

$1-2m

380-700 jobs 500-750 jobs 200 - 300 jobs

$20m to $45m will be spent yearly in direct labour needs, corresponding to 1,000–1,800 direct jobs, of which a large part could be sourced locally

37


Note: benchmark performed on different iron ore – copper mine in the same range (ROM) than Aynak

Around $5 to 9m per year should be spent in direct mine labour, corresponding to 500 to 750 jobs, a large part of which to be potentially sourced locally

Mine positions Management - TS

# employees

Mine Manager 1

Maintenance Manager 1

Technical Services Manager 1

Chief Geologist 1

Senior Mine Engineers 1 – 2

Chief Surveyor 1 – 2

Surveyors 2 – 4

Mine Engineers 3 – 6

Geologist 3 -5

Surveyor Assistant 2 -5

Field Assistant 4 – 8

Secretary 3 – 8

Clerks 3 – 8

Systems Analyst 2 – 4

Assistants/Trainees 8 -15

Mine positions Operations

# employees

Superintendent 1 – 2

Foreman 4 – 6

Shift supervisors 10 - 20

Shovel Operator 15 – 20

Truck Operator 100 – 150

Loader Operator 8 – 25

Dozer Operator 35 - 50

Grader Operator 10 - 20

Drill Operator 25 – 35

Water Truck Operator 15 – 30

Explo/RC Drill Operators 1 – 2

Powder Crew 10 – 15

Sample collectors/Drill asst. 8 – 15

Helpers/Trainees 100 - 120

Mine positions Maintenance

# employees

Maintenance Superintendent 1 - 2

Workshop Foreman 2 - 4

Shift Supervisor 4 - 6

Fitter 20 – 30

Electrician 8 – 15

Welder 20 - 30

Serviceman 20 - 30

Maintenance Planner 2 - 4

Senior Mechanical Engineer 4 - 6

Helpers/Trainees 60 - 80

40-60 jobs $1-2m Opex /year

350-500 jobs $2-4m Opex / year


38


$6m to $15m per year should be spent in direct processing labor, corresponding to 500 to 750 jobs, a large part of which to be potentially sourced locally

Processing positions Management - TS

# employees

Processing Manager 2

Maintenance Manager 2-4 Process/Metallurgical

Engineer 2-4

Metallurgical Accountant 2-4

Processing positions Operations

# employees

Shift Supervisor 4 – 8

Control Room Operator 4 - 8

Reclaim & crusher operator 10-15

Concentration Cleaner 4-6

Tails disposal operator 15-20

Laboratory Manager (EXP) 2

Laboratory Technician 10-15

Primary crusher operators 10

Others operators 20

Processing positions Maintenance

# employees

Maintenance Manager 2

Maintenance Planner 2

Planning Coordinator 2

Welder 10

Fitter 10

Mobile crane driver 10 Electrical & Instrument

Supervisor (EXP) 10

Electrician 20

Other operators 10-20


80-100 jobs $3-8m Opex / year 80-100 jobs

$2-5m Opex / year

39


$10m to $25m per year should be spent in direct non-mine and life-support labour, corresponding to 380 to 700 jobs, with a large part to be potentially sourced locally

Non-mine positions GM and HR

# employees

General Manager 1 Government liaison 1 Contract Manager 1 – 2

Shipping Coordinator 2 – 4 Flight Coordinator 2 - 4

Legal 2 Drivers 4 – 6 Security 8 – 10

Clerical/Secretarial 3 - 5 Human Resources Manager 1

Training Manager 3 Training Assistants 10 – 20

Records Clerk 3 Helpers / Training 5

Recruitment Supervisor 2 Clerical/Secretarial 5 - 10

Non-mine positions Administration

# employees

Administration Manager 1 Commercial Manager 1

Logistics Manager 1 Puchasing Officer 1 Purchasing Clerks 4-6

Customs Clearance Officer 1 Payroll Officer (EXP) 1

Payroll Officer 1 Salaries and wages clerk 2

Financial Controller 1 Chief Accountant 1 Accounts Clerk 6-8 Systems Analyst 1-2

IT Assistants 4-6 Warehouse Manager 1

Stores Supervisor 10-15 Stores Assistants 10-15

Clerical/Secretarial 20-30

Non-mine positions Support services for

camp

# employee

s Power Station 30-50 Water supply 50-80

Building Maintenance 25-50 Accomodation 100-200

Transport 50-80 Infrastructure 5-10




Non-mine positions HSE #

employees

H, S & E Manager 2 Security Manager 2 Security officers 20

Superintendent Health 2 Nurse 4

Ambulance Attendants 5-10 Safety Officer 5 – 10 Records Clerk 2

Environnemental Manager 2 Environmental Officer 5 Clerical / Secretarial 10

AGENDA

40






41

5.1 BENCHMARKS

Benchmarks Mining and Oil&Gas

42

BENCHMARKING PANEL

Initiatives for private sector development have been benchmarked in similar environments

Mauritania: - Iron ore mining activity - Poor local industrial setup - Interesting initiatives around

private sector development

1

Indonesia: - Performed in the poorest

province of Indonesia (North Moluku)

- Lack of industrial clusters - Local content initiatives

driven by government

2

Mozambique: - Strong initiative around Mozal

project supported by World Bank

- Mozal was the anchor of Maputo Development corridor

3

Kazakhstan: - One of the largest petroleum

developments in the world - A JV of 7 world class

companies

4

Azerbaijan: - Offshore gas production - Very important investments of

BP in Azerbaijan (roughly $31.6 B)

- Existing knowledge from USSR period

5

Chad: - Important political issues - Consortium of three

companies - Annual production comparable

to Afghanistan potential

6

Mining projects Oil & Gas projects

Nigeria: - Shell is the oldest oil & gas

company in Nigeria - Both land and offshore

activities - Important oil & gas industry

7

43

MAURITANIA BENCHMARK - SYNTHESIS (1/4)

The context and outcomes of a large iron ore mining project in Mauritania were analysed.

• Outcomes on local procurement development that is considered as successful

– Foundry activity for wear parts of mining equipment (shovels, excavators, bulldozers, crushers)

– Mechanical engineering activity (bonding, machining, milling)

– Automotive fleet (~500 vehicles) full management (maintenance)

– Catering activity and camp/hotel management

– Sanitation/sewerage systems of the camp

– Civil works activity

– Gypsum stack management

– Air transportation

– Insurances for employees

• Context: – Iron ore company operating in Mauritania critical to development

– ~12MMT production of iron ore

– Limited local capacity available

• Ideas under feasibility study

– Foundry for grinding media

– Foundry for rebars (for construction sector supply)

– Recapping unit for conveyor belts

~$50-100m at stake for 10 MMT ore extraction

~$10-20m at stake for

10 MMT ore extraction

44

MAURITANIA BENCHMARK - FOUNDRY (2/4)

The Mauritania iron ore project had a successful foundry component, as detailed below:

• Focus on foundry activity

– ~120 employees for ~2,000-5,000 MT capacity;

– Main activity is foundry for wear parts that require a relatively standard foundry technology: - Excavators/shovels/draglines (teeth and lips for buckets, crawler shoes); - Bulldozers (lips, blades, shoes), simple buckets; - Crushers (grinding ring, liners).

– Studies were considered for the development, with future investments, of: - Rebar production; - Grinding media production.

• Comment:

– The development of foundry activity to serve the mining industry has been successful in many countries with low levels of industrialisation (Mauritania, South Africa, Mozambique, Morocco, Algeria). The development of the foundry for wear parts is triggered by mining activity, but afterwards can serve other sectors having wear parts (cement plant, civil works engines);

– Most of these developments have been achieved through partnerships with international companies (Magotteaux, Scaw Metals);

– Energy at economically viable prices + local scrap presence aid this development.

~$7-15m revenue

potential for a 10 MMT

ore activity

45

MAURITANIA BENCHMARK - AUTOMOTIVE FLEET (3/4)

The Mauritania iron ore project had a successful fleet management component, detailed below:

• Zoom on automotive fleet management activity

– ~800 vehicles (light cars, 4x4s, buses);

– More than 150 people in charge of the fleet;

– Main activity managed locally is: - Administrative management of the fleet (monitoring of cars, supervision of maintenance rounds,

drivers, purchasing of new cars,…); - Maintenance of the cars (mechanical maintenance, electrical maintenance, standard maintenance) - Spare parts management: imports, warehousing and distribution to the different sites.

• Comment:

– Externalisation of fleet management has been also successfully achieved by some international mining companies in some remote countries: - BHP – Freeport at Antofagasta mine in Chile; - OCP in Morocco; - Oil & Gas companies in Alberta, Canada.

~$2-5m revenue

potential for a 800

vehicles

46

MAURITANIA BENCHMARK - MECHANICAL ENGINEERING (4/4)

Mechanical engineering activities are an important component of a mining project. The regional context can be used, as in the Mauritanian project.

Focus on mechanical engineering activity

– Mining infrastructure development and early operations required mechanical engineering activities, specifically: - Steel construction; - Rollers maintenance / production for conveyor belts; - Machining of metal pieces used for vehicles, trucks, and fixed installation maintenance; - Bonding of metal infrastructures.

• Comment:

– Morocco has successfully developed a plant of roller fabrication for OCP conveyor belts (Maroc Rouleaux).

– Roller fabrication was considered in Mauritania by the SNIM subsidiary COMECA but has yet to be achieved.

– Bonding of metal pieces / infrastructures is an important competence that is often developed through the financing of training and technical schools.

~$5-10m revenue potential

47

AZERBAIJAN(BP) - SYNTHESIS

The context and outcomes of a petroleum development in Azerbaijan were analysed.

• Outcomes of successful local procurement development

– Waste Management

– Electrical Equipment Installation

– Telecom Equipment Installation and Maintenance

– Construction

– Logistics

– Project Management and Design

– Construction of Electric Line

– Installation, Running, and Restoration of Fibre-optic and Copper Cables

– Rental of Crawler Cranes and Provision of Personnel

– Fabrication of Steelwork

– Pipe and Ductware, Blasting, Painting and Welding Services

• Context: – Nearly $31.6 B investment on different projects in Azerbaijan – Off shore gas production

48

AZERBAIJAN(BP) - SYNTHESIS

In the context of BP’s development in Azerbaijan, some successful examples of local development can be outlined:

Examples of local procurement development

– RT Services Ltd. (RTS) was established in 2002 to provide waste management (used brine treatment) Services. In 2009, the company won the contract with BP for the provision of integrated waste management.

– TelcoPlus was established in 2005 to provide a wide range of technical services as well as technical consulting in the following areas: electrical equipment installation, telecom equipment installation and maintenance, construction, logistics, project management and design. The company won a contract with BP for the construction of electric lines along BTC to supply with electric energy for the valves and other electric devices.

– Cable Services LLC was established in 2001 to provide cable installation, maintenance and field services. Cable Services LLC won a contract with BP for the provision of installation, running, and restoration of fibre optic and copper cables.

– SOCAR Heavy Crane Alliance was established in 2009 as a JV with SOCAR and Heavy Crane (Dubai) to provide heavy lifting services. The company won a long-term contract with BP for the rental of crawler cranes and provision of personnel.

– MQS, formerly Metal Qaynaq Sinaq (Metal Weld Testing), was set up in Azerbaijan in 1998. Its areas of expertise include fabrication of steelwork, pipe and duct ware, blasting, painting and welding services.

49

NIGERIA (SHELL) - SYNTHESIS

The context and outcomes of a petroleum development in Nigeria were analysed.

• Outcomes on successful local procurement development: – Helicopters And Air Transport – Seismic Acquisition – Insurance Policy Contract – Brownfield Maintenance And Engineering Services – Integrated Pipeline Maintenance, Pigging And Corrosion Control

• Context: – Oldest Oil & Gas Company in Nigeria – Both Land and Offshore Activities

• Examples of local procurement development:

– Contracts to Nigerian-owned Caverton Helicopters ltd to provide helicopters and associated services. In total, this five-year contract is worth $694m.

– A $26.7m contract to Sonar Limited for ocean bottom node seismic acquisition.

– An operational insurance policy contract worth $7.6m was awarded to Sovereign Trust Insurance for the Bonga deep water production vessel.

– Dorman Long Engineering, a Nigerian company, was awarded a contract worth $41m for brownfield maintenance of the Bonga and EA Fpsos.

– A $59m contract was awarded for brownfield engineering services and integrated pipeline maintenance to another Nigerian company, Baywood Continental Limited.

– A contract for $28m was awarded to B. G. Technical Limited for integrated pipeline pigging and corrosion control.

50

INDONESIA BENCHMARK - SYNTHESIS

The context and outcomes of an nickel mining project in Indonesia were analysed.

• Outcomes on local procurement initiatives

– Exploration work (sampling, assaying, laboratory work)

– Mine truck driving

– Environmental management/preparations for rehabilitation phase (Tree nursery)

– Logistics (warehousing of consumables, customs management)

– Civil works (roads, buildings)

– Site security

– IT / Maintenance

– Catering

– Financial services (development of a local bank branch)

• Context: – ~65 thousand metric tons hydrometallurgical nickel project (6 MMT of extracted ore) – Investment of $6 B – First industrial project in the region / complete feedback on successful local procurement experiences has

not yet been measured

51

MOZAMBIQUE BENCHMARK - SYNTHESIS

The context and outcomes of an aluminium project in Mozambique (Mozal) were analysed.

• Outcomes of successful local procurement development

– Basic services (catering, cleaning, landscaping earthworks, manned security)

– Engineering / manufacturing industry firms (pots, chimneys and pipes production and maintenance, repair of start-up equipment)

– Construction firms (maintenance, water drains, removal of temporary buildings, electric installations and wiring, and repairs, electricity substation in the plant and acoustic barrier in the port of Matola, housing construction and maintenance of buildings )

– Industrial services (phone and phone data base network, suppliers and maintenance of hydraulic equipment, industrial waste removal, employee transport)

• Context: – Mozal is an aluminum smelter that has been developed near Maputo, Mozambique, in a $2 B joint venture

involving BHP Billiton, Mitsubishi, the government of Mozambique, and the Industrial Development Corporation of South Africa.

– Mozal was the first major foreign investment in Mozambique, and was considered as the anchor of Maputo Development corridor. International companies and IFC pushed for the development of SMEs through Mozlink program, in order to: - Build stronger and more competitive Mozambican SMEs - Transfer knowledge and capacity from foreign countries to Mozambique - Increase spending with Mozambican Companies

– 19 companies were awarded at least one contract ~750 full-time jobs and 2,500 indirect jobs

~$35-50m sourced to local SMEs

yearly

52

KAZAKHSTAN (NCOC: ENI, SHELL,TOTAL) - SYNTHESIS

The context and outcomes of an petroleum development in Kazakhstan were analysed.

• Outcomes of successful local procurement development – Marine fleet operations – Fleet maintenance – Offshore services from construction to commissioning – Pipe racks fabrication – Barge assembly – Catering – Accommodations, services, medical services – Telecommunications

• Context: – One of the largest petroleum developments in the world – A joint venture of 7 world class companies – Offshore project

• Examples of local procurement development

– Caspian Offshore Construction, first private company with 100% Kazakh content providing marine fleet operations and maintenance. The forecast revenue for 2011 is $75m. COC has around 300 employees.

– Ersai is a JV (50/50) between a Kazakh company and Saipem. It provides onshore and offshore services from construction to commissioning. In particular, Ersai fabricated pipe racks (18,000 MT/year) and also assembled barges. Ersai has more than 3,000 employees.

– Sayan Firm, is a subsidiary of a Kazakh company. Its activity covers catering, accommodations, services, medical services, and telecommunications. Sayan has more than 500 employees.

53

CHAD (EXXON) - SYNTHESIS

The context and outcomes of a petroleum development in Chad were analysed.

• Outcomes of successful local procurement development: – Inspection for potential issues with the pipeline – Civil works (roads, trails, bridges) – Building (schools, factories, hospitals, airport) – Hydraulic urban & sanitation – Rental of vehicles, fleet management, heavy machinery and equipment and miscellaneous tools – Maintenance – Drilling – Pipe construction – Security services and equipment – Recruitment and training – Permitting

• Context: – Construction was launched in October 2000, the consortium consisted of ExxonMobil (40%, project

operator), Petronas (35%), and Chevron (25%). Oil production commenced in late 2003.

• Examples of local procurement development: – ENCOBAT SA is a company specialised in building construction and civil works, founded in 1997. ESSO Group

entrusted the company with work to develop its various sites including construction of oil rigs, drilling and maintenance. Encobat SA is now the 2nd subcontractor for Esso in Chad.

– Copguard is a provider of security services and equipment. – Emploi & Services is the first recruitment and interim employment company in Cameroon and Chad. Emploi

& Services is now operating in 7 West African countries.

~$160m at stake for

~90,000 bpd

54

5.2 AYNAK PROCUREMENT PLAN

Aynak Procurement Plan

55

5.3 AMU DARYA PROCUREMENT PLAN

Amu Darya Procurement plan

Documents

DetailedprocurementplanforAynakandAmuDarya PROGRESSREPORT#1 …documents.worldbank.org/curated/en/329031468196439822/... · 2016-07-16 · Construction Material . Services / Labor