Abstract

RUPPRECHT, S.M.. Owner versus contract miner - A South African update. J. S. Afr. Inst. Min. Metall. [online]. 2015, vol.115, n.11, pp.1021-1025. ISSN 2411-9717.  http://dx.doi.org/10.17159/2411-9717/2015/v115n11a6.

Over the last decade in South Africa, there has been a significant increase in the number of mining operations, both open pit and underground, which use independent contractors to carry out mining activities. Often mine owners will choose the contractor option without fully understanding the consequences of undertaking this option. Traditionally, contract mining has come at a cost premium of about 15% to 20% compared to an owner mining scenario. However, due to the large number of junior mining companies entering the mining arena in South Africa contract mining rates have increased, with cost premiums as high as 50% being reported. This paper looks at the merits of owner mining versus contract mining and describes under what conditions it may be favourable to select the one option over the other. In addition, the methodology of entering into contract negotiations with the objective of establishing a fair and sustainable relationship is discussed.

Keywords : contract mining; owner mining; contract mining negotiations.

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