Article first published in Australian Mining Review, March 2026. Reprinted with permission.
Across the world, governments and investors are looking for ways to unlock their natural resource potential and drive economic resilience. Demand for critical and precious metals continues to surge, and the pressure to bring projects online — or bring old ones back to life — is growing fast.
Not surprisingly, we’re seeing that firsthand across Australia and the broader Asia Pacific region. Feasibility studies are being released at an increasing rate. Operating assets are being revitalised and expanded. Dormant sites are being re-evaluated for their potential to be brought back online. The pace is lifting.
Delivering Value
In this environment of economic uncertainty, one message comes through clearly from owners and governments: long-term value matters, for their economies, investors and communities. The challenge is that, more often than not, the definitions of ‘cost’ and ‘value’ get confused, and that confusion often leads to decisions that jeopardise Net Present Value (NPV) and project performance.
Take engineering and project delivery services, for example. Over the past decade, risk models and price uncertainties have become harder to predict, and many major project delivery consultants have stepped back from traditional EPC delivery models. EPCs still have their place in the right context, when there is alignment between the owner, consultant and project, however, a new brand of EPC contractor has emerged, offering low-cost solutions that prioritise cost certainty and speed. On paper, they can look appealing — especially when budgets are lean and financing can be easier to secure. But when cost becomes the headline instead of value, problems can follow.
From my work across Asia Pacific, Europe and the Americas, I’ve seen it play out repeatedly when the wrong partner was selected: a focus on reducing costs, – saving a few million on engineering, only to spend multiples of that down the line in completely avoidable costs. Cutting corners on design or equipment may lower startup capital, but it rarely leads to a stable, predictable, long-life operation. In the worst cases, recoveries drop, operating costs climb and reliability erodes.
Cost will always remain a key factor. The real question is where you optimise without sacrificing the mine’s long-term performance and NPV. Encouragingly, we’re seeing more owners across the region shift their thinking toward creating long-term value rather than simply reducing upfront costs.
Five reasons to prioritise value over cost
At Ausenco, we are seeing this play out through a notable shift away from transactional EPC models for engineering and project delivery services towards a more dynamic EPCM partnership. Here are some reasons why:
1. Better Lifetime Value
An EPCM partnership gives the project delivery team a clear cost envelope to work within, allowing for opportunities to optimise across the entire asset lifecycle — not just to produce a “workable design” as quickly as possible. That’s how you protect NPV, not just CAPEX. While in comparison, a fixed-price model can incentivise value destruction by failing to consider operating costs, expansion options, sustaining capital programs and eventual closure.
2. Lower Risk
A fixed-price model builds in contingencies for unknown risks, incentivising consultants to work in ways that converts this into profit, often at the expense of long-term quality, and with little to no transparency to the owner. Those shortcuts tend to surface later — in day-to-day operations and maintenance, or in future expansion opportunities — where they’re more expensive to rectify.
On the other hand, an EPCM partnership brings transparency and collaboration from the outset. Working as one team from study through project delivery allows strategic management of risks and opportunities across every stage of the project, giving owners the ability to make decisions on where and how to optimise costs in a clear and transparent way, with a full understanding of the potential risks.
3. Stronger Local Impact
In some regions, EPC Contractors will minimise costs by importing labour and materials from outside the country. While this can lower CAPEX, it ignores opportunities to boost the local community and regional economy. An EPCM partnership can allow for the integration of local businesses from day one. For example, at Ausenco, we strive to build partnerships with local engineering consultants and contractors that leave a legacy of improved capability and economic benefit. In practice, this translates to local community engagement and social licence to operate, which can derail a project if not managed properly.
4. Increased Flexibility
An EPCM partnership encourages open-mindedness and genuine optionality. Instead of locking into a narrow delivery approach, the collective team can explore multiple pathways to achieve project objectives — whether that’s through modularisation, reducing emissions, improving community outcomes, enabling future expansions, or simply building a more resilient operation. Under an EPCM model, exploration of these opportunities while addressing inevitable unforeseen project challenges can be pursued without necessarily triggering a cost or schedule variation, as it would under some fixed-price EPC contracts.
At Ausenco, we pride ourselves on finding a better way for our clients and see flexibility as a strategic advantage worth exploring, not a cost risk that needs to be mitigated. An EPCM model is the perfect landscape to explore these options.
5. Long-Term Value Creation
EPCM relationships are built for longevity, not transactions. At Ausenco, our role doesn’t end when a project is handed over. With deep knowledge of the project, we can continue supporting our clients through sustaining capital programs, expansion studies, and operational improvements — sometimes decades after the original build. That long-term alignment is what enables consistent value creation.
The Cost Misconception
A common misconception is that a lump-sum EPC contract provides cost certainty for owners; however, the only certainty is the initial figure itself. Built-in contingencies for risk, plus markups on equipment and subcontractors all add costs that an EPCM model would avoid. Contracts are meticulously crafted to lock in scope and latent conditions, often requiring large, dedicated teams to manage effectively. Variations will undoubtedly arise, providing opportunities for the consultant to build in additional profit or contingency, which further incentivises the wrong behaviours and ultimately inflates overall project costs.
Prioritising value
As governments and investors work to unlock the full value of their natural resources, the focus should remain on getting the best value for the asset, not just upfront costs. While CAPEX is important, it should not be the only consideration. It should also be noted that there are several alternative hybrid EPC/EPCM models that prioritise and incentivise different behaviours and outcomes.
At Ausenco, we have helped many of the world’s leading mining companies deliver on their goals, create lasting value and build strong, profitable operations.