Factors Affecting the Decision-Making Process between Owner and Contractor Mining

Abstract

When making a decision between conducting owner and contractor mining, it is common for the mine owner to take into consideration a number of factors to assess the suitability of either method for any particular project. This research identifies and investigates the key factors by means of literature review and questionnaires and interviews with representatives from the resource industry across all fields - mine owners, contractors, independent consultants and Original Equipment Manufacturer (OEM)’s. The responses from 12 professionals were synthesized and compiled to form a framework that can assist both the mine owners in the decision-making process and representatives from other fields to have a better overview of a particular project in the context of owner vs. contractor mining. The key factors identified are company factors (expertise and availability of capital and personnel/workforce), geology of the deposit, geographical and political variability, availability and suitability of contractors and project’s financial model and investment analysis. The research shows that there does not exist a single methodology used across the industry and that the decisions are case-specific and should consider the balance between risk, cost and benefit.