Thought Processes During The Project Initiation Phase

The overall supply of platinum is forecast to rise more than the demand, and market deficit will narrow somewhat, but is still substantial at about 480 000 ounces. Because of this deficit, the price of platinum is expected to remain high, not taking into account the impetus from funds and speculators. With this strong demand for platinum and the high price, platinum producers still need to initiate projects to not only sustain current production, but also expand output into the high demand. However, the rise in the platinum price does not entirely offset the drop in revenue due to the strong rand. Consequently, in the current economic environment, executives and managers are under extreme pressure to initiate only the highest yielding projects and implementing them successfully. During the initiation phase of a project, the cost of changing concepts is the least, and strategic project decisions are the most important. It is during this phase that the most value can be added to a project, therefore requiring inputs from highly skilled, creative and experienced people. This paper will discuss thought processes and paradigms during the initiation of projects that will assist project owners in the selection and initiation of successful and profitable projects. The project initiation process will also be discussed outlining selection models, risk analyses and funding considerations.