Importance of contracting standards

The mining industry sometimes responds so rapidly when commodity prices rise that contracting standards tend to drop in the mad rush to meet the next potential boom. One of our clients supplies dozers and earthmoving machinery to the Queensland coal mining industry. They have gone from having half of their fleet parked up, to having more work than equipment and then to considering buying new equipment over the course of a month.

Mining companies around the world are now thinking about how they can get more coal, iron ore, bauxite etc out of the ground and the cost focus of the past few years has gone out the window. The standard quick fix is to get a mining contractor to ramp up production. There are still good deals to be made with plenty of surplus equipment available, however the contract mining engagement process needs to be well managed to avoid leaving an expensive legacy for others.

MEC has setup mining contracts for clients, managed contract mining tenders, audited variations and resolved contract claims. Our experience has taught us that defining the scope of works for the contract is the critical step as it is where most contracts go astray. Our team has specialist experience in contract and tender evaluation including:

  • Contract framework development and review
  • Tender evaluation, preparation and review
  • Cost modelling and estimation
  • Shadow estimates for contract evaluation

What are your learnings from working with mining contracts?