The FCM (Future Complex Metallurgy) project
Project stopped by client after basic engineering.
The circular economy is becoming increasingly important in environmental projects. Avoiding the need to extract metals from ore by recycling reclaimed metals produces enormous environmental benefits. It is important for copper producers to innovate in order to continue supplying copper at competitive prices and increase the reuse of (semi-)precious metals, which contributes to the circular process.
Copper producer Aurubis produces high-quality copper from copper concentrates and recycled materials. An increasing proportion of copper waste comes from electronic devices, which contain many (semi-)precious metals. The value of the reclaimed metals is even comparable to the value of the copper itself. This created a business case for building a new installation to recover a wider range of metals from waste, complex concentrates and smelter intermediates and initiated the Future Complex Metallurgy project (FCM).
The goal of the ‘’project was to recover more precious metals, such as gold and silver, but also minor metals, like for example Antimony, Tin and Tellurium. The originally planned investment amount in the business case for FCM was € 320 million. Aurubis had expected first EBITDA contributions starting in FY 2022/23.
The client searched for a partner to support the project organisation in the execution of this large scale investment project. The tools required for the project organisation needed to be made available in order for the project organisation to be trained. The project team should execute the construction of the new installation and would convert the existing installations located in Hamburg in Germany and Olen in Belgium. After a broad market search, KH Engineering was selected as the professional party to realise the project as part of an integrated team with the client.
To successfully organise and manage the project, KH Engineering became part of the project team at both locations at the start of the basic engineering phase. We supported the client with specialist services and started mid-2018 with the implementation of the tools and systems fitting the size of the project. This included a project portal (SharePoint), a project management system, a Health & Safety manual and a draft construction management plan. The preparations were made for the implementation phase, which should have started after the final investment was approved.
Within the Aurubis project organisation, we acted as an owner’s engineer supporting the client’s team with planning, estimating, cost control, QA/QC, engineering and project management. External engineering contractors, including Canadian and Australian contractors for the specialist metallurgical processes, participated in the project.
The basic engineering resulted in a capital estimate indicating significantly higher investment costs than initially planned. A significant reduction of the investment cost was achieved by a Value Engineering study in which KH Engineering participated. But the costs were still higher than initially planned. The senior management of Aurubis therefore made the decision to stop the project.
Benefits to the client
By supporting the project organisation as part of an integrated team, we contributed to internal communication and co-ordination within the project team, and to co-operation between the various disciplines. As an organisation, we were physically present, and could respond quickly during the project. By providing tools and systems for the execution of projects, project management support for the FCM project and estimation of the minimal Capex requirements for the different parts of the FCM project, KH Engineering enhanced Aurubis’ capabilities for project execution as a basis for Aurubis’ capital expenditure programme.
Projectleider: Piet Luijkx
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