dss+ addresses turning point for Indonesia refining sector

New report outlines case studies saving clients billions

Leading operations management consultancy dss+ released valuable insight into navigating the risks and challenges associated with launching and operating a successful smelting facility in Indonesia, to take advantage of impressive industry transformation following the Indonesian Government’s ban on mineral export to boost the country’s long-term returns from mineral wealth. 

The report, featuring several global case studies based on direct client experience, is available online.

The Indonesian Government’s strategy is paying off, with processed nickel exports reaching $30 billion in 2021, 10 times higher than before. As an excellent contemporary example of industry transformation, Indonesia is attracting substantial investments – especially from Chinese firms – with an expected total investment of over $50 billion by the end of the decade. 

The progress in Indonesia, combined with recent case studies from the dss+ global pool, have returned valuable insights for businesses looking to diversify and adapt to industry transformation, including the Australian market as it adapts to net zero requirements.

In one of the report’s case studies, dss+ outlines its role in steering a development project at a mining operation back on track in a rapid eight-week turnaround program. Their work led to $64 million in development backlog and delayed revenue recovery, alongside a vital operating system to sustain results.

Another investigation saw dss+ transform risk management capacities and safety culture for a steel manufacturer. After risk profiling 24 operational processes, 187 hazards were identified – 100 of which had major consequence potential. dss+ then improved processes and developed standard operating procedures through extensive coaching of client personnel. 

A third case study involved a potential mining capital project with concerns about the viability of the project’s capital cost estimates. dss+ successfully developed a structured project management plan to lead to a 32% reduction in capital costs and save their client $3.7 billion, with $1.7 billion of capital savings identified before detailed design and a further $1.6 billion reduction in capital expenditure identified during construction.

dssDirector for Australia and New Zealand, Andrew Wilson, said: “With significant barriers during the feasibility, construction and operational phases of opening a smelting facility – an intense period of activity which sees two thirds of capital projects fail – it is critical for operations in Indonesia to proceed safely, productively, and sustainably. 

“Companies that successfully complete capital projects and transition to operations will gain a competitive edge as Indonesia becomes a key player in critical minerals. Success factors include understanding and mitigating risks, strategic planning and integrating sustainability considerations. Offering environmentally friendly ‘green’ metals will be increasingly important for financial success and aligning with global emissions reduction goals.

“While Indonesia’s shift focuses on developing manufacturing, something not happening in Australia, there are still valuable takeaways for adapting to industry transformation in our own market. With endless supplies of renewable energy, Australia has a unique competitive advantage in a carbon constrained world by smelting ‘green’ metals here. This will require a major transformation of the industrial landscape in Australia.   The way to achieve resilient, sustainable operations has evolved and the lessons found in neighbouring markets are invaluable to providing a competitive advantage at home.”

Since announcing its rebrand in March last year, dsshas expanded its solutions to help companies across a variety of industries to protect, transform and sustain operations. dss+ is dedicated to helping clients build organisational and human capabilities, manage risk, improve operations, achieve sustainability goals and operate more responsibly.

Top image caption: Andrew Wilson dss+ Director for Australia and New Zealand

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