The Economics Of Contract Mining Or "Should I Use A Contract Miner?"

Contract mining has a definite place in the mining industry, both in the United States and around the world. A mine owner should evaluate the utilization of contract mining in the devel­opment and production of mining properties. This evaluation of contract mining should be performed at various times in the life of a mining prope1iy from the development and initial operation of a new mining project, periodically throughout the mine's life, and at mine closure. Many factors must be considered in ana­lyzing and evaluating the potential of contract mining and those factors are both quantitative and qualitative. Quantitative factors are those factors for which costs or measures can be determined or estimated objectively; and qualitative factors are those factors for which costs or measures must be determined subjectively and do not lend themselves to objective determination or estimation. Some of the qualitative aspects may provide only yes, maybe, or no answers while others will provide a tendency or partiality toward one answer or the other without a quantified cost. The major quantitative aspects include operating and capital costs, monitoring costs, capital preservation, acquisition and disposal of new and used equipment, direct payroll and administrative costs, recruiting and training costs, and employment and termi­nation of staff and hourly personnel. The major qualitative areas include corporate philosophy, risks associated with capital and operating costs, financing the project, operating control, operat­ing flexibility, recruiting and training of personnel, employment and termination, administrative concerns, and owner/contractor relationship.