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    Economic downturn crisis forecast November 2008

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    graphic results of economic downturn crisis forecast November 2008

    Economic Downturn Magnitude and Duration Quantitative Study by Riskope (http://www.riskope.com), November 2008

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Parlando un po’ di rischio e di ORE

Riskope ringrazia Luca Calderan per questo suo contributo.

All’estero quando si parla di Consulenza Manageriale nella gestione del Rischio le persone associano l’idea al rischio finanziario, ai grandi rischi aziendali, alle catastrofi naturali e di origine umana.
In Italia invece in genere le reazioni sono due: gli imprenditori ritengono che il rischio sia trascurabile o che comunque non toccherà mai a loro, mentre le persone comuni sono convinte di essere protette dalla scaramanzia nella vita di tutti i giorni e pertanto saranno restie a rivedere il loro modo di procedere.

Ma è davvero così?

In azienda la risposta a cui ci si troverà davanti sarà: si è sempre fatto così, non vedo perché dovremmo cambiare adesso. Ma in un contesto di cambiamento continuo ha senso rimanere ancorati a queste idee?
Vi è poi un filone di persone che associano il rischio unicamente al rischio finanziario e perciò lo ritengono legato unicamente al mondo bancario e perciò distante dal proprio campo di lavoro.
Ma siamo sicuri che un’attenta gestione del rischio non possa contribuire ad evidenziare eventuali carenze che magari abbiamo sempre avuto sotto gli occhi ma che non abbiamo mai preso in considerazione?
Un’attenta valutazione dei rischi permette di quantificare con più esattezza quali aree necessitino di un intervento o di una revisione e può perciò essere un elemento preziosissimo per la gestione di interi settori o di un’intera azienda.
Comunemente si tende ad associare il rischio con la sua diretta conseguenza: Salute e Sicurezza, Ambiente, finanziario) e/o il pericolo, o quello che è considerato il pericolo (incendio, terremoto, terrorismo, ma questo genera confusione.
Scorporando i singoli fattori e misurando separatamente il loro tasso di rischio potremmo accorgerci di avere una situazione diversa da quella attesa e che magari richiede strategie diverse da quelle che si sono sempre adottate perché “si è sempre fatto così”.

Il cuore di ORE é la determinazione esplicita del limite di tollerabilità, rep. di appetito al rischio per il caso specifico studio (azienda, progetto, impress, etc.

Il cuore di ORE é la determinazione esplicita del limite di tollerabilità, rep. di appetito al rischio per il caso specifico studio (azienda, progetto, impress, etc.

Una delle operazioni più difficili è quella di separare i rischi razionali da quelli irrazionali, che magari derivano dal fatto di aver sempre operato nello stesso modo o dal fatto che si tramandino avvertimenti che non vengono più verificati.
Un metodo per non incorrere in questo problema è il metodo ORE (Optimum Risk Estimates), ovvero la Stima Ottimale dei Rischi.
I vantaggi sono notevoli, primo tra tutti il fatto di permettere ai manager di avere la situazione sotto controllo con pesi reali e basati su uno studio dei fattori interni ed esterni, senza doversi improvvisare contabili, ma avendo una stima reale dei settori che presentano fattori di rischio, con un’analisi dettagliata che può essere d’ausilio per chi deve prendere decisioni in campo direzionale, per una scelta di business o anche solo per valutare la fattibilità di un investimento.

A presto per parlare ancora di Riskope Risk Corporate Cockpit.

Our clients beat the trends. We are proud to contribute to their leadership.

We have been reading with a lot of interest Deloitte’s report entitled: Tracking the trends 2011, The top 10 issues mining companies will face in the coming year.
The issues highlighted in Deloitte’s report are summarized below:

1 Financing
2 Volatility
3 Stakeholders engagement
4 Taxes, regulations and governments
5 How to invest more strategically
6 Hiring and retaining talented workers
7 Prospection (in hazardous areas from a geo-climatic-geographic and political point of view)
8 Climate change and other hazards (including regulatory hazards)
9 Infrastructure gap in the countries of operation
10 Exploring new revenues opportunities

As we were reading the report, it became quickly rather obvious that many of the points in the list above had already been covered by recent Riskope’s jobs for international clients.

This proves that our clients are clairvoyant and were “on the trends” way ahead of the pack.
That demonstrates leadership, and we are proud to contribute to our clients’ success.

To be able to brings concrete answers to our clients’ questions we had to develop unconventional and sometimes very innovative approaches, sometimes entire new methodologies.

Here is a summary of some selected jobs summaries, performed in the last few years, covering a number of the issues highlighted by Deloittes’ report.

We have been and still are performing studies related to Cyber War and Cyber Defense for military and Civilian Clients.

Financial Comparison of long term alternatives, including upside and downside risks have been performed for large environmental remediations (asbestos dump, arsenic stocks, etc.).

Alternative ways to work/process in hazardous climate and very diverse geographic areas have been studied in the field of transportation, unexploded ordnance (UXO), landmines etc.

Large multimodal transportation systems have been analyzed  with respect to climate change impacts, special hazards, including terrorism.

B2B, Corporate to Country solutions to reduce impact of seismic events, ingress/egress problems have been analyzed, prioritized, using Risk Based Decision Making (RBDM).

Cleantech solutions (disposal of waste oils, reduction of carbon footprint, alternative transportation modes, etc.) have been weighted and compared to standard solutions.

How to get the most out of (Vegetable) Waste Oil for your Small or Medium Business: CDA-ESM can help you to select the best option

Reportedly, some fast food chains started (2007) to use their waste cooking oil to make biodiesel. In one example encompassing 1200 restaurants, the entire corporate truck fleet of 155 vehicles was converted to biodiesel, which means 6.1 million liters of waste oil put to use on the roads. Other sources reveal that McDonald’s trucks in Austria have been using biodiesel “for a few years.”

In order to show how Comparative Decision Analysis-Economic Safety Margin (CDA-ESM) can help in the selection of the best Vegetable Waste Oil management alternative, we consider as an example a restaurant, i.e. a commercial kitchen (for example an ”average sized” fast food restaurant, of roughly 150m2, or less than 500m3 construction volume) or any equivalent Medium Sized Business (MSB).

The MSB’s Management wants to find a better way to deal with their waste frying oils, but also wants to avoid the implementation of the filtering station necessary for an automotive use of its waste oils. Furthermore, the MSB does not have enough vehicles to make the fleet conversion economically feasible/reasonable.

Management is also fully aware that, reportedly, some large chains like Burger King and McDonald’s would like to use frying oil to heat water, but has heard they don’t have the space for a redundant system and fast-food restaurant personnel may not have the time nor the ability to operate a more complex burner system. However, Management has recently learned that there are off-the-shelf solution with burners capable of burning waste oils that are simple to use, can even accommodate several fuels, and, with some restrictions, can be inserted in existing furnaces, thus avoiding expensive replacements.

Management has therefore to decide whether they want to maintain the status quo, i.e. the presently active waste frying-oil management/disposal or to switch to a new installation which would include a burner capable of using those waste oils to generate useful heat. The new installation should not be redundant (no need for extra room) with the present one, and should either use the existing furnace with a new burner, or replace the old system with a brand new one.

This Paper shows how to set up the data necessary for the alternative selection using an innovative alternative evaluation methodology called CDA/ESM (Comparative Decision Analysis/Economic Safety Margin) (C.+F. Oboni, 2009). CDA/ESM brings to MSBs the opportunity to apply Risk Based Decision Making to the alternative selection process and to explore how two code compliant and perfectly legitimate alternatives may differ on the long term, not only in their costs, but also in their risk profile (upside and downside risks, i.e. opportunities and failures).

CDA/ESM eliminates the pitfalls of NPV (see below) and has been used at preliminary design level (Oboni and Oboni 2007, 2008; Oboni 1999-2000, 2005) to support decisions in many industries/situations by comparing alternatives in financial terms, including:
a) life’s cycle economic balance encompassing internal and external risks and
b) project implementation and demobilization costs and risks.

CDA/ESM has been successfully applied to date to industrial alternatives such as: rope v.s. road transportation, surface v.s. underground solutions, environmental rehabilitation projects, water treatments alternatives, transportation networks and go/no-go decisions.

CDA/ESM is particularly useful when comparing long term projects, as its “risks included” cumulative cost evaluation eliminates the “zeroing effect” and the “rosy scenario syndrome” linked to NPV.

Risk Based Decision Making in Mining Webcast

This course in webcast format is the perfect alternative for busy professionals! Attend these live sessions from your workstation at home or in the office.
Prior to the course you will have access to online e-learning material which will increase your understanding and appreciation of the webcast.

This course also contributes to your Continuing Professional Development (CPD)!

Summary

This course introduces a unified transparent approach to risk and crisis management and explores the link between the so called financial and non-financial risks.
It covers the evolution of qualitative, quantitative approaches in risk assessment, how to present risks in a clear and transparent way, and how to use your risk management program to get the most value for you and your company.
It also presents crisis management, prediction of the depth and duration of economic turmoil, and how companies should react when faced with a crisis.

Who Should Attend?

This webcast will be of particular interest to mining project managers, planning engineers, regulators, bankers, insurers and other mining specialists. Nn mining experts will find it interesting because it covers general modern risk management areas, generally neglected by professional development courses.

About the Authors

Franco & Cesar Oboni lead of Oboni Associates, of Switzerland and Vancouver. They have conducted a broad range of engineering projects, risk audits and geo-environmental hazard mitigation studies as well as planning and management of a wide variety of multi-disciplinary studies.

Date: 9, 10, 11 February 2010
Details: Edumine

Balangero Asbestos Mine Environmental Rehabilitation: a Case for CDA-ESM

The Balangero asbestos open pit mine, located 35km N-W of Torino (Torino), was the largest operation of this kind in Western Europe. The open pit was cut into the ridge of an elongated hill. The mill was located on one side of the hill and the dumps on the other.
Dry tailings were lifted by a conveyor belt from the mill, located at the foot of the hill to a location near the ridge. From there they were conveyed through a tunnel to the opposite side of the hill, and then dumped over a natural slope with an approximate angle of 25 degrees from the altitude of about 830 m a.s.l. to the bottom of the valley at 580 m a.s.l.

As the dumping proceeded, a total surface of about 250.000 m2 was progressively covered with tailings thicknesses going from a few meters to an estimated maximum of 60m–80m, resulting in an estimated 60Mm3 dry asbestos tailings dump. This dump, as well as all the production facilities, was abandoned when the mining company abruptly stopped its activities in the early ‘80s for economic reasons.

Restoration/Rehabilitation Program

In 1992 a public company formed by the Province of Torino, the Mountain Community of the Lanzo valleys, neighboring communities and other public stakeholders was mandated by the regional government of Piedmont to organize an international design competition in compliance with regional bylaws. The goals of the competition were to select the best possible alternative to increase the stability of the slopes (oversteepened, critically eroded and prone to mudflows); reduce the dispersion of fibers (long term hazard to the neighboring population); re-vegetate the slopes for aesthetic and environmental reasons.

Risk Based Decision Making (CDA/ESM) was consistently used by the design team who won the bid as shown in the Presentation. The project is now completed.

The Environmental Restoration Goals

a) Achieve a sufficient stability of the slopes. Gravity and water are the main combined external agents posing a threat to the stability of the over-steepened slopes of the dump. Thus it was necessary to act against gravity to enhance the stability of the slope and against water to eliminate surface erosion, gullies formation and increase of saturation triggering frequent mudflows along the slope.

b) Minimize the dispersion of asbestos fibers in the area of the mine and surrounding towns during the restoration works and in the long term.

c) Re-vegetation of the area which is located in a densely inhabited area at the Alps foothills. As the dump material is highly sterile and generally too steep to retain humus, a special program of tree and shrubs planting was designed including the plantation of 45’000 shrubs and trees: their root system was treated with special fungi that are helping the rooting/vegetation process in the sterile slope. A general hydro-seeding of the full area is undertaken step by step, operating remotely, from a helicopter, again to reduce disturbance to the steep slope.

Hauling

One of the major challenges faced by this project was related to the large amount of material to be excavated and disposed of within the mine area in order to unload the over steepened head of the dump slope. Between the top and the bottom of the slopes 4.5 km of dirt track were present. The preliminary design demanded for the removal of about 280.000m3 of residues (mainly sand and gravel) with mixed random asbestos fibers.

The use of trucks was quickly discarded due to the environmental risks (Pollution from exhaust fumes and fiber dispersion from the excavated material) and the need to upgrade the tracks to roads. A far better ESM was obtained with the alternative of installing a temporary aerial tramway. This device was designed with a single span of 960 m between the two terminal stations (Criteria: Meeting expected performances; Criteria: Avoiding hazards (settlements, instability of intermediary piers)).

The cable car was removed at the end of the earth movement works . The excavated material is wetted at excavation time and remains wet during the full trip from the source to the final resting position to reduce fiber dispersion. The process proved to be very efficient and only a couple of times, with very strong winds, the dust monitoring instrumentations displayed critical concentrations of aero-dispersed fibers in the surrounding area environment. The aerial tramway produced electricity which was sold to the grid (Criteria: Sustainability).
Slope Stabilization Procedures

The selected slope stabilization procedure received a high ESM based on high probabilities and low costs (of failure to meet the criteria) for various Criteria. The procedure can be summarized as follows:

Unload of the upper part of the slope by digging three big berms and by storing the excavated material at the bottom of the slope on an artificial earth fill 8 m high using the cable car. The engineered fill is geared towards protecting from possible residual mudflows originated in the steeper eastern part of the slope (up to 42°) the lower part of the slope, the Fandaglia creek etc.

Cut a series of 8 “path-ways”, i.e. small berms 2.5 m wide, along the slope at regular height intervals. The “pathways” were designed to minimize the volume of material to be evacuated. The “pathways” are reinforced with small palisades built with wood logs (20 cm diameter on the average) increasing the use of natural materials and reducing the need for concrete and steel. The downhill side palisades are totally covered by earth, whereas the uphill palisade remains visible. It is complemented by a geogrid and densely planted to obtain, once vegetation will be mature, a “green retaining structure”.

Build whenever deemed necessary composite wood-earth structures to retain the steepest parts of the slope, or create necessary platforms.

Runoff Control

From the hydraulic/water control point of view, surface erosion created deep (up to 3 m) gullies on the slope in the past. The remedial measures undertaken are the following:

General control of all the surface water falling on the area in form of rain or snow via a net of small wooden channels (on the average 50 to 100 cm wide). These channels collect surface runoff on the slope thanks to the access created via the top berms and intermediate “pathways”. The small dimensions of the channels have been designed to limit the use of heavy equipment on the slope and the need for large excavations for their construction.
The collecting system is relayed by secondary segments of channels located running on top of the berms and on the “pathways”.
Thus the collected runoff is concentrated into 4 main channels located on the slope along the steepest gradient: these channels – called “water chutes” – are built with wood logs and stones.
The 4 “water chutes” finally converge into a unique main canal – built again just with logs and stones – that allows the water to reach the Fandaglia creek at the foot of the slope. Before the final exit to the external environment the collected runoff water flows through a decant basin where the fine material and the fibers can be retained.

Finally, subhorizontal drains are drilled on the slope to control underground water.
Conclusions

Comparative Risk Based Decision Making (CDA/ESM) was used at each and every step of the Balangero’s environmental restoration bid to guide the selection among possible design alternatives. As a result, the project features several interesting solutions related to environmental management, like for example the use of an aerial tramway that allows the reduction of fossil fuel use, dusts, and even produces energy sold to the regional utility company.

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