Mining Contracts – Project Maker or Expensive Failure

The mining industry can have a very short memory when commodity prices rise and bad habits from the mining boom glory days can easily creep back into the industry.

Mining companies start 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 goes 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?