CAPEX Structure of Greenfield Copper Smelter Investment

Greenfield copper smelter investments are always very complex programs to plan and manage. Common challenges are related to project delivery on time and on budget. Therefore, a good understanding of the related capex structure is critical for successful project implementation from the very beginning. This article tries to break down the scope of work into engineering, civil works, building structures, mechanical and electrical equipment, piping, cabling, and all related additional costs into their own high-level elements, together with separate cost estimation basis for each. The objective is to illustrate which ones are the main cost drivers and how geographical differences influence the outcome in terms of local salary levels. As the results show, the final figure for the budget is mostly dependent on the overall volumes of different materials, the location of the construction site, and the control over the implementation schedule, rather than the main smelting technology selection or even smelter capacity. The paper is based on the experiences of Metso on various smelter projects around the globe.