Theo Yameogo: Welcome to this episode of Mining Today with EY. My guest today is Tushita Garg. Welcome Tushita.
Tushita Garg: Thanks, Theo. I’m really glad to be here and looking forward to our conversation today.
Theo Yameogo: Tushita, as our National Leader for capital projects in metals and mining, can you tell our audience about the trends and insights you’ve been observing with our clients?
Tushita Garg: Absolutely. Would love to. So, I would say that most of the things that I’ve noticed in the recent past with our clients, especially in the metals and mining sector, both globally, but also here in Canada and Americas, what I’ve observed is that there’s a lot of emphasis on capital allocation and making the right decisions. So that’s one part of it, which is how do you plan capital? And the second is how do you deliver on it, whatever you’ve planned. How do you deliver wealth, so more around the capital efficiency. So, I can elaborate more on it, but I’ve seen that there’s a lot of emphasis on these two trends in the sector.
Theo Yameogo: And, if the sector agrees that capital allocation is the key and capital efficiency delivery is also key, what kind of challenges have you observed that they’re facing trying to do these two things?
Tushita Garg: That’s a great question. So, at the moment there is a scarcity of capital.
Our clients are looking for avenues to grow, looking for new opportunities. There’s a lot of M&A activity as well as due to regulatory pressures in terms of sustainability and energy transition. So, there’s a lot of capital that is needed. However, because of the cost pressures, inflation, the geopolitical situation, those are big challenges for any organization to still maintain that growth, still maintain the business as usual.
They can’t ignore these external pressures. Right. So that is why the clients are being very, very careful on what they invest and making sure that they are successful in what they invest.
Theo Yameogo: Now, we also know that internally, we may have talent complications, right, because capital projects is a generational thing and people may be retiring. What have you seen clients do to address these issues?
Tushita Garg: I’ve spent almost two decades in capital projects working across the globe with different clients. What I have observed is projects are run by people, not processes, not technology. So, your question around talent and people is absolutely important. And whenever I go to work with my clients, my focus is how do we make people successful?
It could be people at the leadership. It could be people, you know, on the ground, on site.
So, what we have been doing a lot for the last, I would say, 10 years, 12 years is really upskilling, coaching.
It is okay to have a talent gap. It’s okay to have skill gaps. We all have it because it’s such an advancing and such an evolving market and you know, evolving world. Right.
But again, a lot of innovation needs to happen. This is easier said than done, and it will take several years, if not decades to really reach that steady state.
Theo Yameogo: Yeah. Well, last year, you and your colleagues actually worked on this presentation at a capital projects symposium on using digital twins. What can you tell our audience about the value of digital twins for executing capital projects?
Tushita Garg: So digital twins, again, it’s not a new concept. It’s existed for a very long time. Like, I’m a metallurgical engineer. So, from that perspective, I feel the advantage for having a digital twin is you can make mistakes without actually making mistakes in reality. So, it gives you a very powerful way to test out, try different scenarios, see the overlaps, interfaces, all those problems and risks that can actually happen in a very visual way.
And we are all visual people. We prefer like rather than reading text. If somebody shows us that these are two pipes and they are going to collide after you build it, or you are planning construction in the same area of two completely different things on the same day. Like, that’s not going to happen. If you show all of this visually, it’s so powerful and people get it. So, there is a lot of advantage both in planning, but also actual delivery and implementation of projects when it comes to digital twins. Again, the real concern or the opportunity is adoption. How do you use it and bring the people along. Upskilling is a big part of it.
Theo Yameogo: Okay, in the Top 10 this year, we did identify new projects as opportunistic.
And we can see with the geopolitics but also the demand for critical minerals there’s more mines and projects that’s probably coming up. So, in light of that, how would you describe the future trends in the sector that will actually impact capital projects?
Tushita Garg: When I read the top risks report as well, like capital has jumped from the second to the first in terms of the top risk. So definitely there is a lot of investment going in into energy transition, sustainability goals and all of that. I would say, there are two aspects that I’ve observed with our clients that they are heavily either investing in and they will continue to. One is in the search of critical minerals.
So definitely there’s a lot of greenfield exploration, but also development that could happen in the next 5, 10 years. Critical minerals like lithium, of course, copper, nickel. So, there is a lot of demand. And that is increasing as compared to, the other metals. The resources are limited.
So, there is a lot of emphasis on how do we improve the yield, how do we improve the waste management of the existing plants and existing facilities.
How do you make sure that you can recover whatever you can from the existing processes, just because it’s not easy to keep building new.
And this is where technology and innovation can definitely help.
The other I would say is mine closures.
The top organizations they really want to be very sensitive to the community, the environment.
And there is also, of course, regulatory requirements. So how do you close down the existing mines that are not operating anymore, and how do you refurbish that land? How do you use it for other purposes and really give back to the community? So that’s a trend that our clients are really heavily investing in, both in terms of capability upskilling, but also putting a lot of money into it.
So that’s the other aspect, which is also linked to the sustainability goals and all of that. But it’s also the right thing to do.
So of course, there are so many other trends, but these two I feel really drive what kind of projects are going to be there? What kind of skills are going to be required.
Theo Yameogo: Yeah. And I would say that as a sector, we also have the issues of delivering on time, on budget with the quality. So that’s not going to change right? Or is it going to have an even heavier focus?
Tushita Garg: I hope it changes. I definitely hope because I’ve been studying the energy sector, mining sector, oil sector for 15 years.
And generally speaking, for major capital projects, it’s 80%, 85% overruns or delays, which is a significant wastage of resources, time, energy and everything. Right. So, I’m really hoping that it gets better. I mean it’s all coming from our own, assets. So, there is no reason I would not want it. But that needs to happen in a certain way.
You need more collaboration across partners, across the ecosystem. One thing that I’ve also seen is a lot of JVs and M&As are happening even in the mining sector.
Automotive sector is investing into mining. There is some cross-industry collaboration, which hasn’t been the case for a long time. However, in oil and gas sector it has been very common.
So, I think these are new business models that are evolving that will hopefully make the capital efficiency better. At the same time, technology, AI can help you predict your plan better, see all these risks better. However, I feel the governance is such a big thing missing. So, if the governance and the checks and balances and controls are not in place, then you can have the best process, but you will still not get the outcome.
Again, there is a lot of work to be done. So, my hope is that given all of this knowledge that exists today in the world, and all these skills that exist today in the world, definitely it gets better in the next five years. We start to see the 85% to at least 60%, but we will see how it goes.
Theo Yameogo: Now talking about change management as somebody that even grew up in operations, there’s always a question from some of our clients on the complementary or the perception of lack of complementary services between firms like ours and engineering construction companies. What can you tell our clients around why we play in the places we play?
Tushita Garg: Absolutely. That’s a great question. And it’s a very common question. Not just clients, but even, you know, sometimes our tax team and our audit teams also wonder, like we have engineers, we have this kind of capability.
So, it’s a very interesting question. What I would say is, since I’ve been in the professional services industry, really focusing on capital projects, programs, the way we approach and we go to our clients is pretty different from the traditional EPCs, EPCMs, engineering firms.
And definitely there is a value proposition there that we require all the firms in the ecosystem. The key difference is how we come and with what mindset. So, the mindset we take is on the owner’s benefit, and long-term value and really thinking from an owner’s perspective and shoes. It’s not about achieving some tasks or finishing, you know, our contract and scope of work, it’s not about achieving just those. It’s about what does the business want? What do the people want? What does the organization want? And a lot of times it has happened with me also. If a client asks me, can you come and help us with our capital project delivery, we are really struggling with it.
But then you realize that there are other aspects that are also needed. For example, it could be a labour immigration issue. It could be like a legal issue. So, I have actually brought in other colleagues from EY, from different competencies and we have really tried to help out from a very holistic point of view, because at the end of the day, our mindset and our outcome and objective we are looking for is the success of the client and the business and the people involved.
It’s not about what is written in our scope of work because we really focus on long-term relationships. I did start my career in the engineering firm, so, I’m very familiar with that part of the ecosystem as well. However, that’s a bit technical. You need to be very, very strong of course and deep into it.
But at the same time, you have to also stay focused on the task. You can’t keep thinking about big picture. So that is where the clients and the owners from the mining sector, they rely on us to be the thought leader, to just bounce off ideas, to have those discussions with us and really help us, bring us into the journey of let’s strategize.
Can you help us plan the portfolio for long term? That is where our value proposition is. We are always thinking long term and bringing different, diverse, you know, capabilities as needed. Like once we had to bring in somebody from tax incentives because our client wanted to establish in Canada, but it was their first time so, they didn’t know how the incentive structure worked. And you know every country is different. So, there are so many nuances. And that’s the beauty of it. Where we can just bring it all together and help our clients.
Theo Yameogo: Well, Tushita this has been a great conversation. Thanks for being here.
Tushita Garg: Thank you, Theo, for having me over. It was lovely to talk to you as always.
