Modern Mining September 2020

CONTRACT MINING

Contract mining: a silver bullet in challenging times? Faced with challenges such as depleting orebodies, volatile

D espite the advantages of contract mining, includ- ing the deployment of specialist skills to address aspects such as finance, staffing and equipment requirements, this model is not suited to the needs of all mining operations. In the words of Concor Opencast Mining MD Rodger Herne, who doesn’t expect any major changes to the market in its current form in the wake of the COVID-19 pandemic, “large corporate mining houses with a solid balance sheet and the necessary in-house expertise will continue to execute their own major projects and will only consider the contract mining model where it makes business sense.” Jeremy Petter-Bowyer, MD of surface materials handling solu- tions company SPH Kundalila, on the other hand, notes “a trend towards contract mining in the opencast sector, as mines focus increasingly on their core business, which is to extract and process minerals at the lowest possible cost.” As capital availability in South Africa is currently scarce, he says, mines prefer to spend their capital on vital infrastructure such as shafts and plants. commodity prices and the economic crisis caused by COVID-19, some mining operations are attracted to the advantages offered by contract mining. We take a look at the benefits of this model, as well as what to look for in contract mining service providers. By Mark Botha

Jeremy Petter-Bowyer, MD, SPH Kundalila.

Rodger Herne, MD, Concor Opencast Mining.

“Contract miners’ capital invest- ments effectively become the mine’s variable cost. Owning capital ulti- mately increases the mine’s risk and, with the pandemic definitely raising the risk level, the contract mining option becomes more attractive.”

Concor Opencast Mining maintains a large fleet of mobile mining equipment.

24  MODERN MINING  September 2020