Investors and shareholders are overly aware of the risks associated with early-stage mining, yet solutions in the mining sector to ensure uninterrupted early payback are few and far between. More often than not, mining startups run into unexpected capital overruns giving cause to additional lending requirements.
Often we notice that first-time open-pit miners tend to put their cards on contract miners, only to become later very disappointed in the results, regardless of the contractor's track record. Contract miners are not known for taking geology, mine design and planning risk, and unless those above were very well defined and the contractor has a detailed design and plan, you may as well park up the trucks.
From many years of experience gained working as both a contract miner and mining industry consultant, ultimately, it comes down to responsibility. With the startup of a new mine, there are too many unknowns for the contractor and the owner, who, in all instances, takes most of the risk.
At TacminMadini, our expertise has solved challenges in open-pit mines and bulk earthwork infrastructure projects for more than two decades. We have repeatedly succeeded in delivering the objectives set out for the assignment. The lesson learned from every operational improvement assignment is that the project started incorrectly in nine out of ten instances.
Investors and shareholders of start-up mining companies ought to be much more aware of the risks associated with startups and not necessarily accept that signing on a contractor has addressed the risks. Those miners who have conquered this painful experience will confirm that it was a costly fee to pay.
If you are planning to start or have just started constructing a new open-pit mine and are concerned that the start-up is not going according to plan, do not hesitate to contact us.
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