Project Management Institute

The Mozal Smelter Project

"River of Aluminum"

2001 PMI PROJECT OF THE YEAR: THE MOZAL SMELTER PROJECT

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BY ERIN WILLIAMS

Confronted with intimidating technical and logistical challenges, with poorly developed industrial infrastructure and civil engineering capacity—and despite swarms of mosquitoes and the worst floods imaginable—the Mozal Smelter Project delivered a productive aluminum smelter ahead of schedule and under budget. The Mozal Smelter is the third project sponsored by the Project Management Institute (PMI®) South Africa Chapter to win PMI Project of the Year.

Not only was the Mozal project team committed to the community, industrial relations and high standards for health and safety, it was dedicated to completing the task efficiently. “It is sobering to think that once Mozal and Hillside [a South African smelter 320 km away] are fully expanded they will together produce one out of every 20 tons of primary aluminum produced in the world,” says David Munro, CEO of Billiton Aluminum, the largest shareholder in the Mozal Smelter Project. Mozal Chairman Rob Barbour described the project as a continuous river of aluminum that will run through Mozambique.

The Mozal Project included the construction of a 250,000-ton-per-annum primary aluminum smelter located 17 km west of the Maputo city center in Mozambique, one of about 30 countries that produce aluminum. With a budget at more than US$1.3 billion, the project reportedly represents the largest single foreign direct investment in Mozambique.

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TECHNICALITIES: HOW DOES THE SMELTER WORK?

The Mozal smelter produces anodes, or the electrode of an electrochemical cell at which oxidation occurs. These anodes, called green anodes, are made from petroleum coke and coal tar pitch. The first Mozal green anode was baked on 22 May 2000. They are surrendered to the pit in the Anode Baking Furnace (ABF), where a temperature of 1,070 degrees Celsius bakes them for 16 to 17 days.

The ABF can produce over 161,000 baked anodes per year, each one weighing approximately 870 kg. While 75 percent of each anode is consumed in the reduction process over a period of 80 shifts (equivalent to 27 days), the remaining anodes hit the carbon plant for recycling.

Ingots, or the mass of metal cast into a convenient shape for storage or transportation to be later processed, were first cast at the Mozal smelter on 11 May 2000. The yearly export of ingots is valued at around $400 million.

Previously, the ingot line had been run with cold ingots brought in from Hillside. When the operators and specialists raised the furnace, silvery metal was sent down the launder. Just moments later, the liquid spilled into the first mold. After a few frantic adjustments to balance the process, the machine was running smoothly. Eventually, the machine began to produce good quality ingots at 25 per hour, making Mozal Smelter one of the fastest ingot lines in the world.

The Mozal Smelter is owned by an international consortium led by London-based Billiton (47 percent) and includes South Africa's Industrial Development Corp. (24 percent), Mitsubishi of Japan (25 percent) and the government of Mozambique (4 percent). A joint venture between SNC-Lavalin of Montreal and EMS, a unit of Murray & Roberts of South Africa, created SNC-Lavalin EMS (SLE), which served as the primary contractor for construction.

Adding the Mozal smelter to the already existing Hillside smelter at Richards Bay and a neighboring Bayside smelter boosted southern African aluminum production to around 5 percent of total world supply.

The smelter, built on a 1.3 millionsquare-meter site (equivalent to 340 soccer fields) was completed ahead of schedule, under budget, with a smooth startup and is achieving peak operating performance to make it one of the world's largest aluminum plants. “The things that make the Mozal project unique are the challenges faced in conceiving, constructing and bringing to full operation a modern…facility in a country that had just emerged from a long civil war,” explains Ian Dryden, area manager of casting and harbor facilities for the Mozal Smelter Project.

However, even with these challenges, Mozal's first aluminum was produced on 18 June 2000, six months ahead of schedule and a mere 25 months (rather than the planned 31) after the start of the project. According to Dryden, it is believed to be a world record for a greenfield (built on undeveloped land) smelter of this size. In addition, the cost for completion was approximately $100 million under budget.

Even with extensive planning, no project manager can prevent nature from running its course.

Up to the Challenge

Since Mozambique virtually had no established infrastructure to cope with a project of this size and complexity, a fellow smelter project, the Hillside smelter in Richards Bay, was a mirror on which the Mozal Smelter Project could replicate key functions. Dryden says, “The successful implementation of the Hillside Smelter was the catalyst for the investigations into a new smelter at Mozambique and showed that the financing, construction and operation of a complex plant such as the smelter could be achieved in Southern Africa.” According to Dryden, close to 70 percent of the owner's and the Engineering/Procurement/Construction Management contractor's team was the same as the Hillside project. That advantage provided necessary vision, experience and contacts to ensure successful project completion—including a detailed project implementation plan and interfacing with Mozambican governmental and regulatory authorities.

“It soon became evident, however, that no project can be a replication of another and that the Mozal Project brought with it a unique set of challenges,” says Dryden. The external environment of the project was considerably different than Hillside's and created new issues for the project team, including logistics, labor, health and safety, and government relations. New infrastructure needed to be provided, which included mine clearing, road access, a construction village for expatriate labor, housing for smelter operations personnel, power supply, potable and industrial water supply, and a sewage treatment plant.

The project team was faced with:

  • No existing infrastructure capable of supporting the construction or the long-term sustainability of the operating smelter (power, water, roads, communications, etc.)
  • A third-world environment recovering from over two decades of civil war and with no experience of industrial projects of this magnitude
  • Unskilled labor requiring large-scale training and safety induction
  • Logistical challenges and the establishment of procedures for air, marine and road importation of materials with customs authorities
  • Malaria, HIV/AIDS and other infectious diseases
  • Language barriers
  • The requirement that first-world standards be applied to the project in terms of environmental, quality and safety considerations. In many respects these are more demanding than normally encountered in South Africa.

Surprise, Surprise

As if these challenges weren't enough, the Mozal project team also discovered that the initial geotechnical studies undertaken in the feasibility study had not detected the “potentially collapsible nature of site soils in fully-wetted conditions,” according to Dryden. “The studies that were performed at the outset of the execution phase showed that initial projections of piling requirements and ground improvements had been inadequate,” he says. “A revision of the civil works schedule was implemented, and schedule recovery to accommodate revised piling requirements and ground improvements in most facilities had been achieved by the start of mechanical installation.”

Even with extensive planning, no project manager can prevent nature from running its course. “The worst storm in 50 years hit Mozambique in early February 2000 and impacted the site; 415 mm of rain fell within four days, causing massive flooding,” Dryden says. “The site was cut off from surface transport to both Maputo and South Africa for a three-day period.” To deal with this obstacle, SLE established an Emergency Services Committee that ensured power, potable water and foodstuffs to the 2,000 expatriate laborers in the construction village. “Storm water drainage systems and an outfall channel installed in 1999 evacuated most storm water from the site and rain damage to the site proper was minimal. On average, the site was back to full operation within a fortnight,” Dryden says.

The floods did, however, cause unfavorable work conditions when the decision was made to construct a harbor at Matola instead of Maputo, as originally planned in the baseline scope. “I advised Mozal to consider moving to Matola as the steel berth was also being used for chrome ore and steel, and the traffic on this berth will increase,” says Rui Fonseca, chairman of the Mozambique Ports and Railways (CFM). “There was a high risk of the vessels having to queue and thus incur demurrage costs.”

According to Dryden, this change required a complete scope revision, including “engineering layout and traffic-flow analysis, construction planning and site establishment, confirmation of procurement lead times and equipment specifications and the casting of a revised cost and schedule baseline.” However, the additional work was beneficial, as Fonseca explains that the Mozal Smelter Project saved money by cutting 12 km from the road transportation, making a significant difference in trucking costs. Though the change schedule was tight and additional pressure was brought on by the floods, the harbor facility was completed in good time, and coke and alumina shipments were off-loaded on schedule in March 2000 (supporting the advanced 27-month program).

SUCCESS FACTORS

Ian Dryden, area manager of casting and harbor facilities for the Mozal Smelter Project, says certain factors were vital to the overall success of the project:

  • Low-cost and secure power
  • Incentives provided by the Mozambique government
  • Access to the same technology used at the Hillside project
  • The ability to learn from the experiences of the Hillside project
  • An experienced owners team and EPCM contractor who had previously executed the Hillside project
  • International financing of the project
  • The recruitment and training of an effective operating team for the plant
  • Training of local labor
  • Establishment of a project labor agreement
  • Highly developed and rigorously tested project implementation plan
  • Use of a fully integrated project management system customized for smelter construction
  • Strong matrix with the ECPM organization clearly aligned to The Mozal Project Team
  • Effective working relationships with Mozambican governmental and regulatory authorities
  • Proven risk management and quality systems.
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South African President Thabo Mbeki mentioned the Mozal Smelter Project was an example of southern Africa working together.

MOZAL PROJECT SCHEDULE

1995

November

First meeting with Mozambique government. Feasibility study commenced.

1996

December

Feasibility study completed.

1997

June

Approval of project by Billiton and IDC.

December

Approval of project by Mozambican government.

1998

May

Project go-ahead announced in London.

July

Foundation-laying ceremony.

October

Lender approval to disburse funds.

November

Potline concrete works commenced.

1999

January

Bolt-tightening ceremony (structural steel).

February

Started bake furnace structural steel works.

April

Completed bake furnace concrete works.

MOZAL PROJECT SCHEDULE (cont.)

1999

May

Completed construction village. Roof-wetting ceremony.

June

Commenced bake furnace refractory construction.

July

Commenced cathode sealing.

August

Completed potline concrete works.

September

Completed cathode installation of first pot.

December

Completed office block.

2000

January

Opening of Matola River Bridge. Harbor ready for first coke ship.

March

First alumina delivery.

April

Production of first anode.

June

Motraco power delivery. Production of first aluminium.

September

Inauguration.

2001

Plant running at full capacity.

STATISTICS FOR THE ENTIRE PROJECT

10,000

cast-in-situ driven piles (160 km laid end-to-end)

16 km

worth of drainage culverts (site to Maputo)

235,000 m3

of concrete (7 m-wide road from Maputo to Mbabane)

24,000 tons

of steel (more than three Eiffel Towers)

208,000 m2

of aluminum cladding (approximately 51 soccer fields)

25 km

of roads

1,360,000 m3

area of main site (approximately 340 soccer fields)

256,000 m2

area of construction village (approximately 64 soccer fields)

8.2 km

of fencing

38 km

of piping

520

street lights

800 km

of cabling

14

22-kW substations

130

programmable logic controllers

400

computer workstations

450 mW

of power consumption

250,000 tons

per annum of aluminum production

Overcoming Obstacles

The Mozal project team's motto “together we can make a difference” effectively communicates the way the team dealt with these obstacles. Dryden explains that without the Mozambican government, the community and the Mozal project team working together, success would not have come as quickly. “Embodied in the statement is the fact that there were many different cultures that needed to work together to overcome the many and varied difficulties of establishing Mozal in Mozambique,” Dryden says. These various cultures are apparent in the range of dignitaries and politicians that visited the Mozal smelter, including Nelson Mandela, Graca Machel, Queen Elizabeth II and 14 South African Development Community presidents.

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South African President Thabo Mbeki mentioned the Mozal Smelter Project was an example of southern Africa working together. “There is no doubt that the Mozal project is the model for the industrial development of our country, as advocated in the industrial policy and strategy approved by our government,” said Oldermiro Baloi, Mozambican minister of industry, trade and tourism. Mozambique President Joaquim Chissano agreed that the Mozal Smelter Project allows the country to “proceed with the relevant political and economic reforms to attract further national and foreign investment, which is so essential for our fight against poverty.” Because of the project, the country's total exports were increased by 150 percent.

Power in Placement

According to Dryden, the Mozambique site was initially chosen as a result of “successful negotiation of a reliable supply of internationally competitive priced power, incentives from the Mozambique government, a suitable harbor facility and a suitable location close to the harbor for the actual plant itself.”

In addition, the country provided a stable source of manpower. The total personnel on site including direct and indirect labor peaked at 9,000, of which 70 percent were Mozambicans. SNC-Lavalin Murray & Roberts employed 260 in the project design office in Johannesburg and 200 on site.

More than US$3.5 million was applied to the establishment of a construction trade training facility. According to Dryden, more than 5,500 Mozambicans were trained, the majority of which found work on site. “On-the-job training under the mentorship of skilled expatriate personnel and continuous labor skill assessments were conducted,” he says. As a result of this training, injury rates were well-controlled.

Elsewhere in the world, smelters have traditionally seen high injury rates during the testing and commissioning of plant and equipment, especially when working with an inexperienced work force. Initially, project management strategy was committed to the highest standards in occupational health and safety performance. However, as a result of unfortunate fatalities occurring in the first quarter of 1999, the Mozal team changed its safety approach and consequently landed a cumulative lost time injury frequency rate of 1.7 in comparison to Hillside figures of 5.0 and the Republic of South Africa average of 11.5. “The objective of 1 million man-hours without lost time injury was reached 10 times and over 2 million on three occasions,” Dryden says.

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The Human Side

The Mozal Smelter Project team even took an inventive approach to dealing with the issues of working safely and the prevention of AIDS and malaria among the workers on site. “Industrial theater was highly effective and we believe this is the first time it had been implemented on a construction project in South Africa,” Dryden says. In addition, an HIV/AIDS task group was formed in May 1999 to focus on education, prevention, treatment and monitoring of sexually transmitted diseases. The group distributed condoms, presented poster campaigns and arranged to counsel local workers about safe sex.

Not only was aiding the work force an essential part of the overall project team's plan, but a program for community development ensured that the plant was well integrated into the Mozambican environment. The Agricultural Development Program “effectively managed the resettlement of displaced persons from the construction site,” according to Dryden. This relocation program has been acknowledged worldwide as an example of how to handle the resettlement of displaced persons as a result of industrial development. Twelve thousand farmers were moved to a nearby area that had been prepared; and then benefited from training and seed and fertilizer supply to improve the productivity of their farms. In addition, the Lubombo Spatial Development Initiative Malaria Control Team was established to help reduce the number of cases and severity of this disease.

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From left: Director Mike Wilde, SNC-Lavalin Murray & Roberts; Senior Area Manager Phil Hynes, BHP Billiton; Project Manager Brent Hegger, SNC-Lavalin Murray & Roberts; Project Director Rex Niven, BHP Billiton; Senior Area Manager Ian Dryden, PMP, SNC-Lavalin Murray & Roberts.

PHOTO BY ROBERT PIERCE

When, in the spring of 2000, Mozambique was hit with the floods, the Mozal team was again supportive of the community. Billiton, the smelter's largest shareholder, provided helicopters to assist in the early rescue operations throughout the devastated areas. The Mozal Community Development Group provided clothes, food, milk and other products to the people in the Boane and Matola areas.

In the End

The project was so successful that Mozal approved a second row of electrolytic cells, called a potline, on 21 June 2001. This will allow the plant to double its capacity. Construction is currently well-established on the site. Dryden says, “The approval of the expansion was a clear statement of support from the shareholders and resulted from the outstanding success of the Mozal first potline construction, startup and ongoing operation.”

Today, the operating plant employs an effective project team that has attained process efficiencies that are equal or even perhaps better than those around the world. “This makes Mozal a low-cost producer of primary aluminium for export to world markets,” Dryden says.

The completion of the smelter coincided with Mozambique's own silver celebration: the first aluminum ingots rolled out of the factory just a week before the 25th anniversary of the country's independence. Billiton CEO Munro says, “It is perhaps fitting that our project, an important symbol of rejuvenation and confidence in southern Africa, was started in the old century but will be completed in the new.”

Indeed, this partnership among the shareholders, the country and the project team all lent to a successful completion, and the award of the 2001 PMI Project of the Year. PM

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

PM NETWORK | JANUARY 2002 | www.pmi.org
JANUARY 2002 | PM NETWORK

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