Rare Earth Metals Mining and Magnet Production Startup Uses Lean Principles to Build a Realistic Timeline, Control Cash Flow and Safely Deliver a Quality Product

Client Context

• A US-based startup building an integrated supply chain to support the growing EV industry and minimize reliance on foreign resources with an expected revenue growing to $2B at full capacity.
• The company required optimizing investor cash to support the development of feedstock conversion while building up the manufacturing facility.
• With an initial influx of cash, the client invested heavily in its manufacturing location but failed to maintain consistent leadership which reduced oversight on spend and timeline. Changes in leadership resulted in unclear project objectives and investment drivers.

Key Challenges

From a project management standpoint, the company presented the following deficiencies:

• Lack of an integrated plan to define the development of both the feedstock and manufacturing facilities.
• Poor visibility and understanding of contractor spend and unchecked forecasted expense which impacted cash flow expectations.
• Disparate safety programs between sites which inhibited best practice sharing and preventative actions.
• Communication gaps between teams, support staff and leadership due to unclear cadence and escalation expectations.
• Significant gaps on CAPEX budget due to insufficient information when estimating causing investor hesitation.

Approach & Key Success Factors

EFESO  partnered with the client’s Leadership team to develop a robust project plan for both sites, control human and financial resources and accelerate program execution. The new strategy and actions included:

• Plan Development Workshops & Command Centers
• Defined project plans for both the feedstock conversion site and the manufacturing facility to ensure they were aligned on safety, budget and resources. Cadences were developed and tailored to each site to drive short term interval control against the plan.
• The manufacturing site preferred a traditional command center where members track actions manually using post-it notes while the feedstock conversion team preferred a digital format using Smartsheets to track actions and completion by person.
• Analytical Review of Past Spend & Source-Based Development of Future Budget
• Analyzed past spend for trends and one-time purchases to reduce forecasted expenses and manage cash flow expectations to ensure longevity of investment cash.
• Utilized subject matter experts to refine CAPEX budget against benchmarks and updated quotes to add validity to anticipated CAPEX spend.
• Defined Communication Cadence
• Implemented meeting cadence and provided framework for each site to ensure expectations were being met, necessary resources were being consulted / informed as needed and decisions were escalated to higher management as appropriate.
• Integrated safety programs from both sites to ensure all safety information was collected, analyzed and channeled through the newly hired safety manager.

Results

25%

Improvement in overall schedules

40%

Reduction in actual expenses from forecast resulting in cost control of >$10MMn

2

Integrated schedules built to manage timeline and resources

20%

Improved NPV for mine and manufacturing by revamping CapEx plan

30%

Reduction in purchase orders with expense control and governance process

5

Time zones coordinated across to support US-based teams and support staff across 3 continents