Contractor management crucial for outsourced functions at quarries
Load and haul is one of the biggest cost drivers for any quarry, and it makes sense for an operation of this nature to outsource its mining processes to a contractor.
For many local quarry operations, outsourcing of a significant proportion of operational processes downsizes fixed costs and reduces capital investments, but contractor management is very crucial, reasons Riaan Redelinghuys, Executive at PPC Aggregates, one of the biggest suppliers of construction materials in Africa.
For example, at PPC’s Mooiplaas Quarry, a dolomite operation in the Centurion area of the Gauteng province of South Africa, in terms of operational processes, a significant proportion is subcontracted. Drilling is outsourced to contractor Bustque, while blasting is done by Bulk Mining Explosives. Load and haul is also subcontracted to a contractor, SA Earthworks. Redelinghuys reasons that outsourcing these processes is aimed at a combination of downsizing the company’s fixed costs and reducing capital investments. However, he is of the view that when you outsource several processes of your operation, contractor management becomes extremely crucial.
For example, for load and haul, Redelinghuys says the quarry doesn’t stipulate what the contractor should use in terms of equipment. “We buy capacity from them,” he says, adding that SA Earthworks is tasked with putting a capacity of 550 tonnes per hour through the primary crusher. Additionally the quarry prescribes 0,30 litres of diesel burn per tonne, and managing these processes is crucial to achieving the best productivity and cost savings the quarry is aiming for.
In what circumstances should a quarry consider to engage the services of a contract miner? Andries van Heerden, CEO of Afrimat, one of the biggest construction materials suppliers in southern Africa, reasons that outsourcing in any quarry should occur where the contractor can do it better than the quarry owner. “This could be due to a lack of skills to manage and maintain a load and haul fleet, or where the focus from the contractor results in much better efficiencies than what you can achieve, although this should not actually be possible if you have the right management in place,” says Van Heerden. He adds that outsourcing also makes sense in cases where the capital outlay cannot be justified, for instance where the remaining life of mine is short.
Van Heerden says outsourcing functions such as drill and blast, as well as load and haul, leads to better focus on the operation’s remaining activities. “The downside could be increased cost and goals of the contractor and the quarry that are not the same – the quarry wants to minimise cost, while the contractor wants to maximise revenue,” he argues.
Van Heerden also says that doing the work in-house can be more cost-effective and better aligned with quarry goals. However, he says there are several considerations when one has to choose either of the options, in-house mining or outsourcing. These include skill level of quarry personnel, availability of capital, life of mine and availability of maintenance resources.
Equipment Africa says: The decision to outsource or do in-house mining should solely be reached after careful consideration of what works better than the other. But, it is crucial that when outsourcing is the viable option, sound contractor management should be in place to get the best out of the contractor.