Risk Analysis in the Mining Industry

People in different societies and different economic, political environments perceive and evaluate risks of large and complex projects in significantly distinctive ways. This chapter demonstrates ways of identifying and analyzing risks in large projects using case studies of mining projects in Mongolia. According to the Project Management Body of Knowledge (PMBOK), composed by the Project Management Institute (PMI), the largest professional organization dedicated to the project management (PM) field, risk management (RM) has been designated as one of the nine main areas (the other eight being integration, scope, time, cost, quality, human resources, communications, and procurement management). Consequently, RM is considered as an important activity of the PM process. The need to identify a project’s uncertainties, estimate their impact, analyze their interactions and control them within a risk-management structure has only in recent years been realized, mainly within the defense, construction and oil industries (Williams, 1995). The chapter explaines risk management processes through a research on mining project risks. For clarity, the chapter will start from explaining about mining projects, providing a simple process flow chart. The next step was to identify risks based on this flow chart and seen in the mining projects implemented in Mongolia. The long-list of the risks may occur during mining project implementation was completed through literature review and discussion with mining engineers and project managers with experience working in Mongolia. Construction project risk and oil and petroleum project risk studies were widely used. The list of identified risks was short-listed by the criteria, which has the most impact to mining project failure during an implementation process in the country. The short-listed risks were assessed and prioritized based on a questionnaire response from the expertise working in the Mongolian mining industry. Finally, a study on project risk information database, methods to create and use the database were formulated.