MBS684: Strategic Risk & Projects - Acacia Mining PLC Analysis

This project focuses on managing strategic risks associated with Acacia Mining PLC, a mineral exploration company in Tanzania. The project identifies constraints and assumptions, including the impact of new mining regulations and corruption charges. It addresses risks at the mining site (commodity, permitting, political, environmental, insufficient requirements, capital allocation) and in urban offices. The project team, consisting of Alex, Kalagadda, and the author, defines roles and responsibilities. Kalagadda serves as project manager, Alex defines project goals, and the author creates a stakeholder map and project timeline. The project also considers financial data, mining site operations, sustainability practices, and stakeholder relationships. The stakeholder map utilizes a RACI matrix to define responsibilities. Desklib provides access to this and other solved assignments for students.

Running head: MANAGING STRATEGIC RISK AND PROJECTS
MANAGING STRATEGIC RISK AND PROJECTS ON
ACACIA MINING PLC (ACACIA)
Name of the Student
Name of the University
Author Note

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MANAGING STRATEGIC RISK AND PROJECTS
Table of Contents
1.Project Constraints and Assumptions.................................................................................................2
2. Project Teams (Resourcing Requirements)........................................................................................5
3. Stakeholder Map (RACI)...................................................................................................................7
4. Project Timeline..............................................................................................................................12
5. Authority.........................................................................................................................................14
References...........................................................................................................................................15

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MANAGING STRATEGIC RISK AND PROJECTS
1. Project Constraints and Assumptions
The project aim is to manage the strategic risks that are associated with the Acacia mining
Plc. (Acacia). This is generally a mineral exploration company with the aim of acquiring,
exploring and developing mineral properties in the area Tanzania. The enterprise has divided the
business operations into five segments and this includes North Mara, Buzwagi, Corporate,
Exploration and Bulyanhulu. The enterprise started facing problems by the mid 2017 after the
government of Tanzania banned the export of unprocessed minerals. With different mining
regulations by the starting year of January the enterprise faced problems in their business and also
lead to shutdown of their business in Bulyanhulu. In addition to this the enterprise faced another
major problem by October 2018 when the senior manager was charged with corruption (Vikhlinin
et al., 2015). This situations has developed risks towards the employee of Acacia mining Plc
(Acacia) enterprise. Project constraints and assumptions are needed to be classified broadly so
that the developed project can be built without any limitation. Assumption is referred to the
situation when the project developer thinks about an outcome however is not sure about it.
Constraints are the limitations faced while developing a project. The project aim is to develop a
better strategy that will mitigate the risks properly and will escalate the existing issues.
The basic approaches for mitigating the risks includes approach for managing the risk at
mining site and second approach for offices in urban environment. Both the risks addressed are
different and needs different strategies for mitigation. The project constraint includes failing due
to improper ERM and this leads to company’s overall preformation. The project fails to prepare a
truly suitable approach that will mitigate the risks properly. The project needs to implement
proper timeline and budgeting so that the required actions can be implemented properly and
within time frame. The project scope was clear however it became difficult to adapt strategies that
will be really beneficial for the enterprise. The boundaries and the areas are needed to be set
properly. The only aim is to mitigate the risks encountered so the employees can work freely
without any hesitation. There is a need to have a proper strategy that will define whether an
employee is corrupted or not. This facts effects the organizations reputation and also employee

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MANAGING STRATEGIC RISK AND PROJECTS
will not like to be in touch with such an organization. The project needs proper budget planning
else it will fail to mitigate the risks. It is important to remove the project constraints for proper
implementation of the project. Project assumption is referred to the factor included in planning
process that is measured as real, certain or true. This are the activities that are expected to occur
while project life cycle. In the project of managing strategic risk within the Acacia mining Plc. it
is assumed that the project will able to mitigate the risk after successful analysis (Söderblom,
Samuelsson & Mårtensson, 2015). With the implementation of timeline graph the budget
incorporated and the schedule can be determined. It is assumed that the project will get completed
successful within the time frame.
The major challenges faced within the Acacia mining plc. are many. Among this one of the
major challenges is too cope up with the new regulations developed by the government with the
implications of new rules the organization has failed miserably in delivering their products.
Government implemented rules that has affected the working of Acacia mining plc. Several
impacts are caused to environment this includes erosion in the environment, loss in diversity, the
soil gets contaminated, groundwater and surface water gets affected by the chemicals used in the
process of mining. With the implementation of new rules and regulations the mining rules also
changed. This came into effect by January 2018 (Roder, 2018). This includes a law that each
foreign investors are nee to have a bank account within Tanzanian owned bank.
The top risks associated with the mining industry Acacia is divided into two aspects, one is
the risk associated with the mining site and another one is with managing the offices in urban
environment. The risks at mining are as follows:
1. Commodity risk
2. Permitting risk
3. Political risks
4. Environmental risks
5. Risk related to insufficient requirement
6. Improper allocation of capital

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MANAGING STRATEGIC RISK AND PROJECTS
However it is not possible to determine each level of risk with this project. The project will not
focus on the problems related to water availability and quality problems. The risk and issues related
to water at different level of mining are out of scope. It is not possible to describe this part of the
risks. The risks that are related to technical issues and mining site issues can be explained (Payne &
Calton, 2017). It becomes important to mitigate these risks before it starts effecting the organization.
This sector involves several danger to life and thus it becomes important to have a proper mitigation
strategy. Risk management strategy is further divided into process, project and business after
analysing risk at this level it becomes important to create a risk action plan and proper management
plan will help to mitigate the risks.

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MANAGING STRATEGIC RISK AND PROJECTS
2. Project Teams (Resourcing Requirements)
The project is completed by three members that is me, Alex and kalagadda. Each member of the
team has contributed significantly towards the project. The role of each member was decided
from the beginning itself. Kalagadda collected the information regarding and problems faced by
the organization Acacia currently. He discussed about the risk and also provided approach for
developing a proper mitigating strategy. A proper risk identification technique is suggested for
better working and for easy mitigation process. The approaches are defined after analysing
historical records. He also undergone researches and found about the organization Acacia and the
working structure. Kalgadda was being decided to be the project manager as he has having the
maximum knowledge about the organization and the regulations that affected the working. Alex
described the project goal and determined the expected outcome of this project. In the project my
role was to create a proper stakeholder map that will help to understand the main stakeholder
associated with the organization. The project timeline is also developed by me after analysing the
important factors and the time needed to develop it.
According to mineral report, the estimated revenue is US$751.5B million (2017). The operating
income of Acacia mining plc. is around US$(699.2)million (2017). These is important to have a
perfect calculation about the reserves and resources of Acacia mining plc. According to the newly
developed committee mineral reserves and resources, it is being calculated that the mineral
reserve of the organization is around US$1,100.00 per ounce. This is being calculated by using an
assumed long term average gold price. The silver price per ounce is around US$15.00 and the
price of copper is around US$2.50 per pound (Nishat Faisal et al., 2016).
Acacia mining plc. operates total three mining sites in northwest Tanzania, this includes North
Mara, Bulyanhulu and Buzwgi. The Bulyanhulu gold mine is an underground gold mine in the
region of Shinyanga and is located 6 km away from the town of Kahama. This is the second
largest mine opened in 2009 and is the single open pit mine in Tanzania. The gold mine of North

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MANAGING STRATEGIC RISK AND PROJECTS
Mara is an open pit gold mine located in Tarime district of Mara. This mine was opened in the
year of 2002 and was acquired by Barrickk in the year 2006. Buzwagi production in the year
2009 was over 1 million ounce till date. The plant designed within this area has the capacity to
give a throughput of 12000 tonnes of ore per day. The amount of gold sold in the year 2017 was
amounted to around 160,552 ounces that is 40% lower than the production of 2016 (Manetti,
2017).
By the end of 2018, Acacia mining plc. has expected to invest on the brownfield and
greenfield exploration and aims at adding new features. This includes the following:
 Adding new Greenfield gold discoveries
 Continuing the organic growth throughout the mining and expansion of resources
 Optimizing the use of assets in mining process
 Identifying new opportunities throughout Africa with the help of strategic joint ventures,
acquisitions and opportunistic.
The internal factors that attracts people includes some basic concepts. Each team member are
exposed to some unique world class cultural transformation programme that helps the employee to
grow. The main rules followed by the working staff includes planning the work before executing,
every employees dedication is appraised at correct time and hence leads too motivation, proper
communication is done and everyone works as a team, the team always tries to deliver what was
assured to the customers before the deal (Lawson, 2016). The products developed are best and hence
attracts customers and also a huge importance is given towards the worker.
The Results at Third Quarter of 2018
 There is a decrease in revenue of $94.8 million by 10% with every consecutive year (Holt-
Lunstad et al., 2015).
 The estimated gross margin for GAAP is around 47.3% and the gross margin of non-GAAP is
around 46.7%

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MANAGING STRATEGIC RISK AND PROJECTS
 GAAP income from operations of $8.0 million; non-GAAP income from operations* of $15.0
million (Lauwo, Kyriacou & Dedoulis, 2017)
 The net income of GAAP was analysed to be $8.2 million and the non-GAAP net income* is
around $17.6 million
The organization also focuses sustainability practices and need of stakeholders. The code of ethics
followed by the organization includes proper rules and regulation for conducting the business. The
goal of Acacia mining plc. is to have their employees with highest security so that they can go home
safely and can have a good health. Each employee is expected to work according to the safety and
occupational health management policies set by organization. This policies are implemented to ensure
proper benefit towards the families, communities, colleagues and business (Hillson & Murray-
Webster, 2017). With the health and safety systems provided using equipment the organization
enables employees safety at work. The responsibility of the organization is to protect, enhance and
reclaim the environment in which the operation is taking place. The Acacia mining plc. has conducted
several environmental programmes that helps in protecting environment. Managing the environmental
activities are supported by sufficient financial provisions and resources. This plan ensures that
environment is protected for future generations and the sustainability of the nature is safeguarded
(Chilala et al., 2015). With implementation of effective security standards, procedures, controls and
policies that will contribute towards the safety and protection of each employees, reputation of
organization, assets and communities in which the organization is operating.
3. Stakeholder Map (RACI)
Stakeholder Responsible Accountable Consult Inform
Executive Board of
Acacia mining
yes
General manager yes
Unit manager Yes

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MANAGING STRATEGIC RISK AND PROJECTS
Security and ethics
committee of Acacia
mining
Yes
Staff of Acacia
Mining
Yes
Union of workers Yes
Suppliers Yes
Mine transportation
company
Yes
Workers of
subcontractor
Yes
Security staff Yes
Public
administrators
Yes
Media Yes
Ministry of natural
and energy resources
yes
Public
administration at
provincial level
yes
Executive Board of Acacia mining
Public administration at provincial level
Responsible
Unit manager
Public administratorsAccountable
Staff of Acacia MiningConsulted
MediaInformed

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MANAGING STRATEGIC RISK AND PROJECTS
Acacia mining gives proper priority to each of the stakeholders in order to achieve main
objective. The mining organization follows some principles while maintaining the relationships with
stakeholders. This are as follows:
 The work is done by adding proper values towards the human being and valuing each
member.
 There is a need to establish a proper human resources that will create added value and will be
committed towards the organization.
 Providing honest support, transparent communication and proper services.
 In order to act as a model that will support innovation and provides proper support towards
the staff.
 Providing proper training so that the qualification of each staffs can be improved. This will
also help to improve the services offered by the staffs and will provide a better future.
 Environmental approach is used to protect natural resources and environment.
However Acacia mining guarantees that relationship maintained with each stakeholder is
transparent. Stakeholder engagement is important for Acacia mining plc . as it is important to develop
a strategy that will maintain proper transparent and will be accessible to everyone (Attenborough et
al., 2017). In order to maintain proper relationship with each stakeholder, Acacia mining follows
certain principles. This are as follows:
 Identifying each stakeholder associated with project.
 Overviewing the stakeholders of different levels while mapping the stakeholder’s activity.
This includes local people, national and international stakeholders and public administrations.
 Plans for managing the relations with stakeholders, analysing the impact of stakeholder’s
engagement in order to ensure active engagement.
 In order to minimise the negative impacts on project local active stakeholders are
communicated. This also add on to the benefits obtained from the project.

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MANAGING STRATEGIC RISK AND PROJECTS
 Records related to issues from stakeholders are collected and are provided to the concerned
stakeholders as soon as possible.
 Methods are developed to ensure proper access of vulnerable groups within a project.
 Different communication channels are used in order to offer more opportunities towards the
stakeholder. This ensures active engagement of stakeholders.
Acacia Mining has aimed at contributing towards the development and growth and of
Hanönü. Acacia Mining thinks that there main responsibilities as a corporate includes having
the capability to act fairly at the time of recruitment and giving equal opportunity to local
people, allows shopping and procurement from district resources as much as possible and
also ensures work that will improve the educational, structural and health services in district.
Stakeholder mapping is the first step towards stakeholder engagement plan. The main
objective behind stakeholder map is to identifying each group of stakeholders and their roles
and responsibilities. With the help of stakeholder map priority mapping can be done.
Stakeholders are basically divided into two parts, external and internal stakeholders. During
the mapping of internal stakeholders the engagement time and effect from institutional
engagement can be obtained (Andriof et al., 2017). The mapping process of stakeholder defines
the role played by them throughout project. The stakeholders and their engagement process
are different for each group. Media and NGOs related to the organization engages with other
stakeholders through dialogues. The public administrations, vulnerable people and affected
people communicate with cooperation. Exchange of information takes place in order to
engage with the residents of the area and the consultation helps in engagement with indirectly
effected people.

Running head: MANAGING STRATEGIC RISK AND PROJECTS
4. Project Timeline
Activities Month 1 Month 2 Month 3 Month 4 Month 5
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Geographical
Investigating the site
Analysis
Pilot testing plant
piloting plant
Tailings test work
Feasibility Study
Planning about
mining
Plant process
Waste Dumps and TSF
Infrastructure
Risk management
Risk Identification
Technical problems
Environmental
damages
accidents faced at
time of construction
Irresponsible
behaviour of workers
Risk mitigation