Modern Mining September 2020

CONTRACT MINING

extraction from their ore. In some cases, an improve- ment in the extraction rate from 80% to 90% could generate enough extra income to cover all the con- tractor’s costs.” At best, the mine conducting its mining in-house has the same costs as the contractor, in terms of buying and deploying its own machines. He says the added cost, in the form of the contractor’s profit, can often be recouped by just a 1% improvement in extraction of the miner’s ore. “As a contractor, SPH Kundalila’s focus is typically two-fold: tonnes per hour of ore moved, and tonnes per litre of fuel burned. This makes us extremely operationally efficient, which contributes to the mine’s overall performance.” He says potential loss of asset value at mine clo- sure usually discourages mines from investing in their own equipment. “Should the mine come to the end of its life

To Petter-Bowyer, the secret is for miners and contractors to focus on “what they each do best”. “The owner-miner’s focus should be on maximis- ing returns for shareholders,” he says. “This means finding and following the right grades – which is the holy grail of mining – as well as getting the maximum

SPH Kundalila has over 320 items of earthmoving equipment in its fleet.

Quick Take  As capital availability is currently scarce, mines prefer to spend their capi- tal on vital infrastructure  The contactor’s focus is on moving the largest volume at the lowest cost per tonne, thereby driving productivity on the mining side  Mines should look for a good safety and operational execution track record when reviewing the competency of contract mining service providers  Potential loss of asset value at mine closure usually discourages mines from investing in their own equipment

26  MODERN MINING  September 2020