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NPV is a static measure of project value which does not discriminate between levels of internal and external risk in project valuation. Due to current investment project?s characteristics, a much more complex model is needed: one that includes the value of flexibility and the different risk levels associated with variables subject to uncertainty (price, costs, exchange rates, grade and tonnage of the deposits, cut off grade, among many others). Few of these variables present any correlation or can be treated uniformly. In this context, Real Option Valuation (ROV) arose more than a decade ago, as a mainly theoretical model with the potential for simultaneous calculation of the risk associated with such variables. This paper reviews the literature regarding the application of Real Options Valuation in mining, noting the prior focus on external risks, and presents a case study where ROV is applied to quantify risk associated to mine planning.

Identifying, quantifying, and minimizing technical risks associated with investment decisions is a key challenge for mineral industry decision makers and investors. However, risk analysis in most bankable mine feasibility studies are based on the stochastic modelling of project “Net Present Value” (NPV)which, in most cases, fails to provide decision makers with a truly comprehensive analysis of risks associated with technical and management uncertainty and, as a result, are of little use for risk management and project optimization. This paper presents a value-chain risk management approach where project risk is evaluated for each step of the project lifecycle, from exploration to mine closure, and risk management is performed as a part of a stepwise value-added optimization process.

Identificar, cuantificar y gestionar el riesgo económico asociado a las decisiones de inversión supone un desafío para ejecutivos e inversores del sector minero. Sin embargo, en gran parte de los estudios de factibilidad de proyectos mineros, la evaluación de riesgo se basa en la modelización estocástica de la rentabilidad, que aportan poco en los aspectos de gestión del riesgo y toma de decisión. En mi presentación, les planteo un nuevo enfoque en que el riesgo se evalúa en cada etapa de la cadena de valor del proyecto, desde la exploración hasta el cierre de la mina, lo que permite la gestión de riesgo como un proceso escalonado de optimización del valor añadido.

Today, most mining companies declare their commitment to the values of sustainability in their Vision, declarations and policies, but not many achieve an efficient integration of those values down into the operational levels of the organization. Corporate commitment is an essential condition for integrating sustainability, but is not sufficient. Another key condition is a business culture where sustainability is a high professional and business value and sustainability objectives are implemented through commitment rather than compliance. Furthermore, the integration process requires of an organizational structure specific roles and integration mechanisms and adequate management systems. In this paper, I would like to focus on the very complex management task for the integration of sustainability down to the operational levels of mining companies, the organizational structures and the management roles and systems required for integration.

The success of a sustainable business project depends on different factors but there is no doubt that the excellence of business management is the single most critical factor, because of it is what connects all the others. In a constantly changing world, a new way of doing things will be proposed setting criteria for taking decisions that create value today and in the future. Professional ethics and transparency must be applied to employees, suppliers, customers and shareholders. A change organizational culture is necessary to respect social and environmental concerns, avoiding erroneous business decisions that endanger the well-being of future generations. In this paper, a model based on excellence and sustainability is proposed, which is based on a diagnostics tool to determine defects and problems, where the areas for improvement are identified and defined both qualitatively and quantitatively, so an action plan could be designed. Subsequently, both solutions and the right tools are applied to move progressively toward our proposed model. The model proposed in this paper represents a new approach to sustainable business management based on excellence, is applied specifically to mining companies.

La conferencia, trató del significado de Responsabilidad Social Corporativa y su relación con el desarrollo sostenible en el contexto de la industria minera, y los aspectos clave de gestion para la integración eficaz de la problemática económica, medioambiental y social de operaciones mineras, que asegure la creación de valor a largo plazo para accionistas y la comunidad.

This paper refers to the concept of sustainable management as the management approach which efficiently integrates economic, environmental and social issues into the operations of the minerals and metals industries, with the aim of creating long-term benefits for all stakeholders, and securing the support, cooperation, and trust of the local community. Among many other issues, sustainable management deals with strategy, responsible project feasibility decisions, managing for operational efficiency, improved risk management, enhanced stakeholder relationships, and corporate reputation. Overall, it deals with seeking long-term competitive advantages through responsible management of environmental and social issues. An essential requirement for sustainable management is the corporate commitment to the values of sustainability, but this is not sufficient. Also essential is the development of a business culture where sustainability is a high professional and business value. Furthermore, an organizational structure with specific roles and integration mechanisms and adequate management systems are also required. Regarding business culture, a well-established business code is a necessary but an insufficient condition. Sustainable management relies on individual ethical conduct and trust to foster full participation of stakeholders and to encourage commitment among them. It allows decision making at appropriate levels in the organization and encourages individual risk-taking for continuous improvement. Without trust, social licence is not achievable. In this paper, the concept of sustainable management is introduced as the management approach that integrates a business culture, strong leadership and an organizational structure that strives for long term economics benefits through sustainability. To achieve this goal, sustainability must be vertically integrated at three organizational levels (corporate, divisional and operational) and three functional levels (strategy, planning and implementation).

Today, most mining companies declare their commitment to the values of sustainability in their Vision, declarations and policies, but not many achieve an efficient integration of those values down into the operational levels of the organization. Corporate commitment is an essential condition for integrating sustainability, but is not sufficient. Another key condition is a business culture where sustainability is a high professional and business value and sustainability objectives are implemented through commitment rather than compliance. Furthermore, the integration process requires of an organizational structure specific roles and integration mechanisms and adequate management systems. In this paper, I would like to focus on the very complex management task for the integration of sustainability down to the operational levels of mining companies, the organizational structures and the management roles and systems required for integration

Hoy, la mayor parte de las empresas mineras declaran su compromiso con los valores de la sostenibilidad en sus declaraciones de Visión de negocio y políticas de empresa. Sin embargo, no muchas logran una integración eficiente de esos valores en los niveles operacionales de la organización. El compromiso corporativo es condición esencial, pero no suficiente, para la integración de la sostenibilidad. Otra condición esencial es una cultura empresarial en la que la sostenibilidad sea un valor profesional y empresarial, de modo que el objetivo de sostenibilidad sea implementado por compromiso personal más que por cumplir una norma. Además, el proceso requiere de una estructura organizativa dotada de mecanismos, roles integradores y sistemas de gestión adecuados. En esta conferencia, pretendo centrarme en la exposición de la compleja tarea de gestión de la integración de sostenibilidad en los niveles operacionales de la empresa minera, la estructura organizativa y los roles y sistemas necesarios para dicha integración

Hoy, la mayor parte de las compañías mineras presentan su compromiso con los valores de la sostenibilidad en sus declaraciones de Visión de negocio y políticas de empresa. Sin embargo, no muchas logran una integración eficiente de esos valores en los niveles operacionales de la organización. El compromiso corporativo es condición esencial, pero no suficiente, para la integración de la sostenibilidad. Otra condición esencial es una cultura empresarial en la que la sostenibilidad sea un valor profesional, de modo que esté motivada por el compromiso personal más que por cumplir una norma. Además, el proceso requiere de una estructura organizativa dotada de mecanismos, roles integradores y sistemas de gestión específicos