1. Metallurgical and Financial Controls Assessment - Medium-Sized Gold Company
Assessment of metallurgical and financial controls at the company's major gold mine. The project was a joint one with KPMG Peat Marwick. The project involved:
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Evaluation of sampling, assay and measurement methods to determine whether they were in compliance with industry standards; whether they were consistently applied and adequately performed and timed to provide reliable and relevant results. |
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Review of the metallurgical accounting methods and assumptions for mathematical accuracy and logic. As part of this step we evaluated the metals flow through analysis work sheet, tracking metals from the mine to shipment of concentrate and dore. |
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Analyzing the process of creating documentation for dore shipments. |
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Tracing metallurgical quantity to book accounting records to assure that all production had been properly recorded. |
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Reviewing metallurgical controls over physical metal and accuracy and security of records. (717-2) |
2. Market Rules and Gas Supply Planning Projects - Australian State of Victoria
These two assignments, on behalf of the Australian State of Victoria, were to provide expertise in natural gas market rules and tariff, and natural gas supply planning.
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The Market Rules Project reviewed draft market rules and tariff order. A&S met with natural gas suppliers, retailers and distributors and the financial advisors to identify any key, unresolved or debatable risks from a commercial and technical perspective. A&S reported on material risks identified and commented on the relevant issues including the likelihood, magnitude and seriousness of the risks identified; the appropriateness of present risk allocations and alternatives and any apparent gaps. |
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The Gas Supply Planning Project provided guidance in developing a gas supply planning capability in each of the newly formed gas retailers in the Victoria area; including the inputs & outputs of the Gas Supply Planning function, responsibilities, staffing and capabilities, and budget. A&S described the current perception of the supply and demand position of each retailer; provided an understanding of and exposure to portfolio analysis, skills, tools and models to analyze the short, medium and long-term supply/demand position; and developed a conceptual model of how the Victoria natural gas supply will bring supplies to market. (706-23/24) |
3. Accounting and Financial Controls Assessment - Major Primary Silver/Zinc Development Company
Our assignment, for a junior mining company headquartered in North America with a US$600 million capital project overseas was to review principal control structures, processes and documentation with a view towards providing our thinking as to both the status of the controls improvement and its suitability for the company. This work in essence represented a review - 18 months following our initial controls work - that assessed how effective our client's controls were in meeting nine principal control requirements.
The first part of the report revisited the nine principal control requirements and provided our client with our judgment as to how well it was meeting them 18 months later. The second part of the report covered six additional areas that were an outgrowth of the nine principal control requirements, focusing on the controls environment established for this major project. The other part of our recommendations involved specific areas covering our client's corporate, general accounting projections and other control issues. (735-26)
4. Operating/Financial Modeling Support - Major Multi-Industry Company
Provide implementation assistance on the development of the A&S financial/economic model for a 17?million-ton, largely metallurgical coal company. The model was used to predict alternative scenarios covering changes in revenues, costs, etc. We worked with the client on a continuing basis to examine the impact of changes in the commercial and operating components of the business on the projections contained in the economic model. (760-6)
5. Analysis of Metal Trading Strategies - Major Metals Mining Company
Evaluated the integration of physical trading, financial trading, with conventional sales and marketing companies, as typical practices by a metals company. The key output of the study was how a major metals mining company could optimize its physical distribution by utilizing both conventional sales and marketing & a variety of different metal trading techniques.(302-11)
6. Metallurgical Accounting Review Medium - Sized Gold Company
At the request of the Board of Directors of the company, a consulting team from KPMG and its affiliate A&S performed a metallurgical accounting review and assessment of the mine.
The team members were a manager for KPMG and A&S' senior metallurgist.
The general objective of the review and assessment was to gain an understanding of the mine's metallurgical accounting procedures and significant processes impacting those procedures and related reports. With that understanding, the consulting team was to trace and account for all production of gold from the mine face ore through the shipment of dore to Johnson Matthey and concentrate to Dowa Mining Co., Ltd. The specific scope of the work included:
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Evaluation of sampling, assaying and measurement methods; |
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Review of metallurgical accounting, calculations and controls; |
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Review of product sales, shipments, documentation and security; |
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Inspection
of company records to ensure proper production accounting. The team had initial discussions with the client's Chief Financial Officer to determine the scope of the work. Following these discussions, the team reviewed detailed information of the mine's facilities and significant processes and obtained a general understanding of the reports prepared by the mine. The team members made a site visit to the mine to review the procedures first-hand. We prepared a draft report, reviewed it with client management and formalized it. (717-2) |
7. Development of a Management Control System - Major Underground Coal Mining Company
The system integrated financial planning and operational planning, simplified paperwork at the mine, and produced more meaningful data throughout the organization, which management acted upon to make operational improvements thereby increasing productivity. (264-8)
8. Development of a Management Control System - Major Diversified Mining Company
This study focused on the development of a corporate planning system for a mining company with several operating divisions. Our work involved teaching key managers to prepare formal plans and eliminated considerable duplication of effort between the corporate and division levels. (210-8c)
9. Metal Accounting Audit - Major Public Accounting Firm
Evaluate the adequacy of the inventory management control procedures in use in a major copper smelter and refinery. This work was done for a public accounting firm and was done off-site by us. It entailed a review of the flowthrough analysis as well as the company's present inventory management control procedure. The output was a written report containing our analyses and conclusions based upon the data provided to us. (706-1)
10. Evaluation of Management Finance Control - Major North American Coal Company
Reporting System, Process and Reports
The client had recently restructured itself in an effort to create greater accountability for financial performance at the mine and business unit level. In conjunction with a big six accounting firm, we provided a new financial reporting system that better reflected the responsibility of the report recipient.
The work involved meeting with and soliciting ideas from business unit managers and controllers for every major division of the company. The study recommendations were implemented. (706-4)
11. Review Current Operations of Russian Iron Ore Mining Company - Major Public Accounting Firm
Our client was the Moscow office of an international consulting firm (associated with a major public accounting firm, KPMG Peat Marwick) working for the Russian Government who required a more complete basis as to whether it should privatize its iron ore business, and if so, on what basis. A&S' assignment provided observations on Stoilensky GOK (SGOK), including a review of mining and related operations, advice on appropriate issues and questions and assisting in report preparation. A letter report was prepared for the client.
A&S' assignment included an on-site visit to SGOK operations and included observations on marketing, mining and concentration operations, tailings disposal, management and organization, immediate cost reduction opportunities, and the need for cost data and financial controls. The study itself was based on an on-site visit by a team of two from A&S, (a senior iron ore operations executive and a management consultant) that provided the necessary knowledge of iron ore technology, operations and management practices. Due to limited time on-site and the lack of available operating data, the work was confined to observations and impressions.
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A&S noted the need to reduce operating costs and adopt modern mining and management methods. |
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Areas of mine operating improvements and concentrator process and flow sheet improvement issues were noted. |
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Approaches to revise management organization were identified and discussed. |
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A&S advised that cost accounting and controls should be introduced. |
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The possibilities of providing immediate cost reduction assistance were addressed. (706-28) |
12. Development of a Corporate Plan For Coal India Ltd. ("CIL") - Major Public Accounting Firm
This assignment, which is now ongoing, involves formulation of a corporate plan for CIL, which KPMG India divided into nine major areas - business environment analysis, corporate vision exercise, corporate structuring, new opportunity analysis, strategic cost reduction, marketing strategy, H.R. assessment and strategy, MIS assessment and improvement, product rationalization and development, thrust identification.
What KPMG wishes from A&S in this assignment are the following:
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Development and analysis of international benchmarks; |
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Development and analysis of international threats in the global coal mining industry, to include any issues affecting the industry; |
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Broad assessment of resource quality of CIL; |
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Assessment of mining techniques as practiced by CIL; |
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Possible diversification opportunities for CIL. |
To assist in this work, a two-man senior A&S team will be in India for ten days from late May to early to mid-June. During this trip, A&S and KPMG together will meet with top CIL people as well as visit a number of CIL coal mines and plants. (706-37)
13. Design Metals Procurement and Accounting Systems - Major Integrated Copper Manufacturer
Design of a metals procurement and accounting system for a major customized smelting and refining company. This company is one of the largest U.S. manufacturers of copper and aluminum rod, wire and cable. Our client is the largest processor in the world of secondary copper raw materials into electrolytic refined copper. This project was done in conjunction with a major accounting firm.
Our role was to (a) provide detailed understanding of the business, (b) work with the accounting firm in analyzing the existing accounting and related systems, (c) identify issues that had systems design implications, (d) determine the analytical tools to be used in the systems design process, (e) determine the key management and operating requirements; (f) participate in the finalization of the systems design, and (g) participate in the implementation plans. (588-2)
14. Advising On The Purchase Of A Coal Operation - Major Investment Bank
Our client retained A&S to be its independent engineer and advise with respect to financing an Investment Management Firm's purchase of a major coal mining operation. One of the mines was just beginning production so A&S designed four separate tests to measure the mine's completion and productive capacity. These tests measured (1) what facilities were completed, (2) the overburden removal capacity with particular emphasis on the dragline, (3) the coal mining and crushing capacity, and (4) the coal storage and train load out system and capacity. A&S monitored the tests and certified the results. (759-2)
