BHP Olympic Dam

Scope of Services

Benchmarking & Capital

Review

BHPOD-CBR-SOS-00001
Rev Date Reason for revision Originator Checked by Approved by

0 14/04/21 Issued for Tender R. D’Agostini I. Fairlamb D. Pastars

CONTENTS

1 Introduction 3
1.1 Study Background .......................................................................................................................... 3
2 Scope of Services 4
2.1 Overview ........................................................................................................................................ 4
2.2 Scope of Work ................................................................................................................................ 4
2.3 Study Approach .............................................................................................................................. 4
2.4 Scope of Services .......................................................................................................................... 5
2.5 General Exclusions ........................................................................................................................ 8
3 Project Services 9
3.1 Meetings ......................................................................................................................................... 9
3.2 Reporting ........................................................................................................................................ 9
3.3 Invoicing ......................................................................................................................................... 9
3.4 Document Control .......................................................................................................................... 9
3.5 Assurance ...................................................................................................................................... 9
3.6 Request for Information .................................................................................................................. 9
4 Submissions 10
4.1 Submission Format ......................................................................................................................10
4.2 Communications ..........................................................................................................................10
4.3 Closing Date .................................................................................................................................10

TABLES
Table 1.1: Key Dates ................................................................................................................................ 3
Table 4.1: Fee Estimate Structure ..........................................................................................................10

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1 INTRODUCTION

1.1 Study Background

BHP Olympic Dam (the Company) has recently undertaken a review of its growth options portfolio. The
review has included the build-up of capital cost estimates and execution phase schedules based on
recent study and project delivery experience, in-house database information and historical studies.

1.1.1 Study Purpose

The Company is seeking to engage the services of an external consultant (Service Provider) to provide
independent advice on the following;
 Industry cost benchmarks for as-built large capital investments.
 Industry trends for engineering and as-built project execution strategies.
o EPCM, EPC, ECI, Outsourced versus Insourced etc.
 Comparison of Company estimates, schedules and execution strategies with industry
benchmarks.
 Opportunities to improve / change / challenge the Company’s approach to the way in which it
scopes, estimates and schedules large capital projects.
o I.e. Technical specifications, owners team structures, systems and procedures, site
productivity factors etc.

1.1.2 Study Approach

The study will be packaged into the following two (2) work programs.
 WP001 – Benchmarking
 WP002 – Capital & Schedule Review

1.1.3 Study Schedule

The Service Provider (SP) is requested to review target finish dates tabled below and include in its
submission a high level study execution schedule that reflects resource availability and the level of effort
required to deliver the scope of services described herein.

Table 1.1: Key Dates

Owner Activity Duration Target Dates

Weeks Start Finish

SP Tender period 2 19th April 30th April

BHP Tender review and award 1 3rd May 7th May
SP WP001 – Benchmarking Report 6 10th May 18th June
SP WP002 – Capital & Schedule Review Report 4 21st June 23rd July
SP Final submissions & closeout 2 26th July 6th August

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2 SCOPE OF SERVICES

2.1 Overview
The Service Provider shall work collaboratively with the Company to ensure that the scope of services
described below are delivered within the framework of a fit for purpose study with a focus on quality of
information.

2.2 Scope of Work

Olympic Dam’s growth capital portfolio has been developed within the framework of an Opportunity
Assessment targeting Class 4/5 cost and schedule level of accuracy.
Major capital infrastructure included in the growth portfolio includes;
 Exploration declines.
 Conveying systems. (surface & underground)
 Underground materials handling systems. (crushing and hoisting)
 Milling and concentrator circuits. (hard rock)
 Tailings storage facilities.
 Coastal desalination and water distribution.
 Regional infrastructure. (Camp facilities, airports, private roads etc.)
 High voltage transmission lines.

2.3 Study Approach

2.3.1 Study Management

The SP is responsible for managing and executing the day-to-day work involved in undertaking the
scope of services. General Service Provider roles and responsibilities include:
 Allocation of appropriately skilled and qualified personnel.
 Management of the SP team including sub-contractors and sub-consultancies.
 Completion within the approved budget and delivery schedule.
 Quality control and governance in accordance with the SP organisational requirements.
 Reporting of progress, cost and schedule performance.
 Maintaining Company confidentiality and information security.

2.3.2 Data Collection

The SP shall utilise internal database and publically available information to compile bench mark cost,
schedule and execution strategy data. Where applicable the SP shall seek benchmark data from
Original Equipment Manufacturers (OEM). No more than one Olympic Dam reference point is to be
included within any benchmark data set. All costs are to be reported in Australian dollars.
Benchmark data must include the following key reference information;
 Size or scale of project, facility and / or major equipment.
 Relevant year of construction and location.
 All correspondence with OEM’s.

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2.4 Scope of Services
The scope of services shall be delivered from the SP’s home office with study activities packaged up
into the following work programs.
 WP001 – Benchmarking
 WP002 – Capital & Schedule Review

2.4.1 WP001 – Benchmarking

The focus for WP001 is benchmarking of capital costs, study phase and execution phase durations for
major growth capital. The following sections outline the scope of facilities and indirect costs for which
benchmark data is required including;
 Total installed costs (Directs + Indirects),
 Unit rates as nominated.
 Industry trends for engineering and project execution strategies.

Exploration Declines
Surface decline and box cut construction for underground mine access including;
 Approximate length, gradient and cross-section.
 Box cut and portal construction. (I.e. open excavation, concrete arch supports etc.)

Conveying Systems
Typical conveyor unit rates ($/m) including;
 Underground inclined conveyors <2,000m long. (Excluding drive excavation.)
 Surface overland conveyors <2,000m long.
 Underground switchback and surface transfer points. (Excluding chamber excavation.)
 Conveyor capacities 6Mtpa to ~20Mtpa.

UG Materials Handling Systems

Typical underground crushing facilities including;
 Truck / loader tip point through to picking conveyor discharge.
 Crushing facility capacities 6Mtpa to ~20Mtpa.
 Turnkey installations including chamber / drive excavations and all service connections.
Vertical shaft hoisting systems including;
 Turnkey installation from skip loading station to headframe bin discharge.
 Shaft diameter, depth, winder type, rope diameter, skip payload and annual throughput capacity.
 Hoisting capacities >6Mtpa.

Milling and Concentrator

Milling and concentrator flotation circuits including;
 Turnkey installations with feed rates ranging between 4Mtpa and 40Mtpa.
 General system description including capacity of major equipment for each installation.

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 Tailings Storage Facilities
Large scale surface tailings storage facilities including;
 Upstream (Paddock), centreline and central thickened discharge alternatives.
 Tailings volume per annum, general cell configuration, footprint and source of construction
materials if known.

Coastal Desalination and Distribution

Coastal water treatment and desalination plant including;
 Treatment capacities >20ML/d.
 Intake and outfall structures.
 Water treatment and desalination facilities.
 TIC and unit cost of desalination capacity. ($/ML/d)
Transfer pipeline and pump stations including;
 Transfer capacities >20ML/d
 Unit cost of buried pipelines for diameters >DN400. ($/km/DN)
 Typical lay-rates (m/day) for buried pipelines.
 Factors relevant to unit costs / lay-rates including diameter, length and regional context.
Alternative commercial models including;
 Insourcing and outsourcing.
 Opportunities and risks associated with alternative commercial models.

Regional Infrastructure
Permanent camp facilities and accommodation including;
 Accommodation buildings, cribs, ablutions, laundry, recreational facilities etc.
 Reticulation of power, water and sewer.
 All-in permanent camp cost. (Including facilities and services described above.)
 Accommodation building unit cost. ($/building)
 Accommodation building footprint (sqm per building).
Private access roads including;
 Heavy vehicle haul roads (unsealed) for off-highway rigid body trucks.
 Heavy vehicle haul roads (unsealed) for road trains.
 Site access roads (sealed) for approved heavy vehicles and light vehicles.
 Typical unit cost of installation. ($/km)
Regional airport including;
 Runway, taxiway, aprons, arrivals and departure facilities.
 Runway length and aircraft size.

HV Transmission Lines
Overhead high voltage transmission lines including;
 Single circuit 132kV and 275kV transmission lines including support structures.
 TIC and unit cost of installation. ($/km)

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 Indirect Costs
Indirect costs expressed as a percentage of total installed cost including;
 Freight, spares, field distributables, camp costs and construction management.
 Excluding contingency, escalation, Owner costs, commissioning engineering & procurement.

EPCM
 Engineering, Procurement and Construction Management costs as a percentage of direct costs
for a suite of recently completed Greenfields and Brownfields mining or complex industrial
projects.

Deliverables
The Service Provider shall produce a single WP001 benchmarking report including;
 Approach and methodology.
 Graphical presentation of total installed cost / unit cost for each growth capital item. (Refer
typical example below.)

Underground Conveyors
$/mtr

Short Medium Long

Project B

Project C

Project C

Project C
Project A

Project A

Project A

Project B
Project B

Example Only

 Raw data that informs the graphical representations within the report stripped of all confidential
information
 Discussion (within confidentiality) of each reference project including:
o Project or study date, quality of estimate and build time.
o Specific factors affecting scope, cost (including escalation rates), schedule and
execution strategy.
o Limitations and uncertainty associated with interpretation of benchmark data.

2.4.2 WP002 – Capital & Schedule Review

On completion of WP001, the Company will issue the SP with an estimate file including the scope of
major infrastructure and summary level execution schedules for recently completed growth options
studies.
The SP is required to;
 Compare Company capital costs with industry benchmarks reported in WP001.
 Provide feedback on variance between WP001 benchmarks and Company estimates.

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  Provide feedback on opportunities to improve / change / challenge the Company’s approach to
the way in which it scopes and estimates large capital projects.
 Review and comment on the assignment of indirect costs and the implied execution strategies.
 Provide comparison of % indirects with industry benchmarks.
 Provide feedback on alternative execution strategies, potential cost and schedule savings.

Deliverables
The Service Provider shall produce a single report for WP002 including;
 Capital and schedule review approach.
 Review key findings and recommendations.

2.5 General Exclusions

The following are excluded from the SP scope of services.
 Detailed review of estimate quantities and technical feasibility.
 Operating and sustaining capital cost estimates.
 Engineering, design and drafting services.
 Deliverables other than those specifically tabled within this document.

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3 PROJECT SERVICES

3.1 Meetings
The SP will be responsible for convening a weekly WebEx meeting, minute taking and distribution of
minutes within three (3) working days. Minutes of meetings should be fit for purpose and not more than
1.5 x pages in total including the following;
 Issues and concerns.
 Key learnings.
 Scope, schedule and deliverables progress.
 Outstanding requests for information.
 Hours and cost summary by resource name.

3.2 Reporting
Weekly meeting minutes are to be utilsed for progress, cost and schedule reporting. There are no other
study reporting requirements associated with executing the scope of services.

3.3 Invoicing
The SP shall prepare and submit monthly invoices with accompanying timesheet information with hours
assigned to individual resources. Receipts must be submitted for all expenses and disbursements
incurred by the SP in undertaking the scope of services.

3.4 Document Control

All deliverables are to be assigned unique identification descriptors in accordance with the Service
Provider’s own document management system. All documents are to be transmitted via email to the
Company Study Principal.

3.5 Assurance
The SP must ensure that all documentation submitted to the Company has been internally peer reviewed
and quality assured prior to submission to the Company.

3.6 Request for Information

The SP shall submit all requests for information to the Company Study Principal via email. The Study
Principal and the SP will work collaboratively to prioritise and respond to all RFI’s in a timely manner.

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4 SUBMISSIONS

4.1 Submission Format

The SP is requested to submit a fee estimate for execution of the scope of Services described herein.
The submission format must include;
 A succinct overview that demonstrates the Service Providers understanding of the scope.
 Recent and relevant benchmarking, study and / or project experience.
 The proposed study approach and methodology.
 Study schedule not exceeding twenty (20) activities.
 A list of key personnel with CV’s or short Penpic’s attached.
 Fee estimate presented in the following table format.

Table 4.1: Fee Estimate Structure

Duration
Name Function / Role Hrs/wk Rate $/hr Totals
(wks)
Study Coordination & Project Services

Name_001 Role 001

Sub-Total $0

Technical Services

Name_002 Role 002

Sub-Total $0

Total $0

4.2 Communications
All communications between the Company and the Service Provider are to be directed to the Study
Principal;
 Name: Rick D’Agostini
 Phone: 0412 46 443
 Email: rick.dagostini@bhp.com

4.3 Closing Date

Submission are to be emailed to the Company no later than;
 COB Friday the 30th of April 2021.

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