2024 Responsible Raw Materials Conference

The term ‘Modifying Factor’ is common to many industry sectors and is deemed to be anything that can affect business or product viability. In the minerals sector, this includes “mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social, and governmental” considerations (JORC Code, 2012).

While systems engineering and technical complexity are generally well understood at most resource and infrastructure projects, Environmental, Social and Governance (ESG) and other Modifying Factors remain less quantified or absent from early-stage analysis and assessment. At a time when more and much larger infrastructure projects are being proposed and (occasionally) built around the world, many have strikingly poorly quantified financial, environment and public support risk profiles (Flyvbjerg et al, 2019).

This trend will intensify as investor and political risk appetites are trending down, while project complexity and societal expectations are trending up. A key consideration when understanding project risk is how crucial stakeholders perceive and accept the direct, indirect or cumulative impacts to common project factors such as water and land.

As risk is in the Eye of the Beholder, common impacts to modifying factors can represent different risk consequences to different stakeholders. Misalignment in risk appetites and impact acceptance between stakeholders can lead to misalignment, conflict, rework and event project abandonment.