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By H. B. Miller

Contract Incentives have long been employed in the underground hardrock industry as a tool to influence employee performance, enhance productivity, and control labor costs. While traditionally structured to establish a direct correlation between performance and compensation, many contract programs have evolved into elaborate systems that promote strategies often viewed as independent of productivity. This paper presents the findings of research into these contract incentives and was conducted with the cooperation of 33 mines utilizing a spectrum of employee compensation and incentive programs. Emphasis of this analysis focuses on the types of production contracts observed and their role with respect to employee earnings.

Jan 1, 1994

By Don S. McCoy, W. Joseoph Schlitt, Donald B. Swanson

Introduction Contract miners have long played an important role in the minerals industry. Historically, these were individuals who worked as underground miners and were paid by the ton or the day. These hardy types still ply their trade in the industry. However, today the term "contract miner" generally refers to an independent contractor who supplies the people and equipment needed to conduct surface mining operations for an owner or lease holder. At one time or another, contract miners have probably handled virtually every mineral commodity from sand, gravel, and stone quarrying to mining uranium and precious metal ores. In today's market, though, contract mining appears to be concentrated in just a few areas. These include precious metal mines, various types of solid fuel operations, and reclamation of abandoned mines. This article covers market areas, contract mining organizations and services, and their advantages and disadvantages. Gold and silver mines Although exact figures are not available, contract mining represents a significant element in the precious metals segment of US mining. For gold and silver, the growth in contract mining appears to be paralleling the overall growth in mining activity itself. Nevada is the largest gold producer in the US. The latest available data (1985) on open pit gold/ silver mines is summarized in Table 1 (Nevada Division of Mine Inspection, 1986). These figures show that contractors mined nearly half of the ore in 1985. Total tonnage mined, of course, was much higher for both owners and contractors. Assuming an average stripping ratio of 2.5 to 1, the total daily mining rate for the contractors was more than 145 kt (160,000 st). This translates into a contract mining rate of about 36 Mt/a (40 million stpy) based on 250 operating days a year. This approximate 50-50 split between owner and contractor also appears to hold for the future. Metals Economics Group (1987) published a survey of 51 short-range and 54 long-range precious metal projects being considered throughout the US. Contacts with owners, requests for proposals, and past corporate philosophies all suggest that about 55% of the open pit operations scheduled for the near-term will be contract mined. This represents an estimated 26 kt/d (28.5 stpd) of ore. A similar assessment of the long-term projects indicates that about 12 kt/d (13,000 stpd), or just under 50% of the open pit tonnage will be contract mined. There are several reasons why gold and silver represent such an attractive opportunity for contract miners. One is that many properties are owned or leased by individuals or partnerships that are essentially entrepreneurial. Many of these owners or lease holders have minimal mining experience. They must therefore either rely on contract mining organizations, sell an interest in the project to another mining company that will become the operator, or hire an experienced management team. For about the same reason, junior mining companies also represent good prospects for contracting. This is because most junior companies focus on exploration. They would prefer to spend their generally limited funds on drilling programs. Thus, they tend to minimize additional capital requirements by using contract miners or farming out the property to another mining company. Another good reason for using contract miners is the size of the deposit. Many properties are so small that their reserves will not support the capital expenditures

Jan 12, 1987

By W. Joseph Schlitt, Donald B. Swanson

The paper provides an overview of the role that contract mining plays in the minerals industry. Particular emphasis is on contract mining and its place in the development and operation of small to medium sized precious metal mines in the western United States. The paper begins with a discussion of the mining options available to owners. This is followed by a description of contract mining organizations and the services they provide. In addition to various mining activities per se, these can include other processing functions such as crushing and agglomeration, various types of heavy civil construction, other types of technical and administrative support, and even assistance with financing. Typical equipment spreads and unit costs are presented. Final 1 y, the advantages and disadvantages of contract mining are discussed. Liberal use is made of

Jan 1, 1987

By T. S. Golosinski

This article reviews current contract mining practices in Australia. Various types of contracts are reviewed, including partnering arrangements and alliances between the contractor and the mine owner. Applicability is also discussed of various types of contracts to specific mining situations, as is their effect on overall mine performance.

Jan 1, 1998

Lihir Gold Mine is situated in a dormant volcanic caldera on a small island off PNG. Not æextinctÆ but dormant. Current ground temperatures are up to 150 degrees Celsius with active geysers in the workings of the mine, pools of boiling ground water adjacent to low-grade dumps and hydrogen sulphide gas emissions. It is a unique mining environment by world standards. This paper will deal with the following issues encountered and managed by the operation:blasting in hot and reactive ground; management of sulphide gas emissions; disposal at sea of all mining waste rock; one dear to all Australian minerÆs hearts û dealing with landowner groups; and unusual human resource issues.

Jan 1, 1999

This paper describes some of the challenges and opportunities of contract mining overseas, based on the experiences of Byrnecut Mining Pty Ltd over recent years. It seeks to highlight the advantages Australian miners have compared to competitors around the world, and the opportunities that arise from that. A number of pitfalls and how to avoid them are also discussed.

Jan 1, 2002

By J. B. Greenwood

The paper point out some reasons why contract mining should not achieve the same success in Latin America as it has in Australia. In this sense, any reasons are: the size of operation, mining industry employees bonus scheme, the privatization of nationalized mining assets, general sales tax and the mining unions. Therefore, great deal depends on the attitude or "mindset" of a company's employees. lt is strongly my view that the attitude with which a contractor approaches a job will give rise to a superior mindset amongst its employees when comparad to those from most mining companies. The value of this cultural difference is significant and should never be underestimated. lmportantly, it doesnot only manifest itself in a more productive workplace: it is invariably the case in Australia that the safety achievements of contract miners are superior to those generally expected from the mining industry at large.

Oct 6, 1999

New Zealand contract mining has been well established for close to 50 years. The opencast industry has grown from mining quantities of less than 1 million bcm per year in the 1950s to around 20 million bcm in the late 1990s. Trends here are following those in other countries with mining companies looking to contract out more of the so called traditional mining work. The key driver behind this trend is not unique to the mining industry, but is simply a matter of concentrating on doing a few things well. In the case of the mining company this has come to mean owning and developing orebodies and where appropriate, marketing mining products, and leaving owning and operating of mining fleets to the contractor. This has the effect of reducing risk to the mining company as well as lowering costs. Both can be achieved without losing control of the key elements of the operation. Optimising performance is simply a matter of identifying the key drivers behind performance, having the right plant and the right people at the right place and providing these people with the information they need to manage the operation.

Jan 1, 1997

BHP World Minerals (BHP) commenced development of the Cannington exploration decline in 1993 using Peabody Resources LimitedÆs Mining Services Division (PRL) as the contractor. Approval was given in 1996 to complete the mine development and bring the mine into production in 1997. The total mine development at Cannington by PRL has included 14 km of headings, 1040 m of shaft sinking for ventilation and ore hoisting and 990 m of raise boring for ore passes and vent rises. Hard money schedule of rates contracts were used for mine development from 1993 until early-1997. This took the mine development down to 570 m below the surface and developed six levels. Because of significant risks, the final phase of the mine development was completed in 1997 under a partnering agreement. This paper examines the factors considered in making the change to partnering, the issues involved in negotiating the partnering agreement to complete the Cannington mine development and the outcomes of the agreement.

Jan 1, 1998

By V. D. Leary, O&apos

Contracts between The Anaconda Co. and its miners at Butte, Mont., are not contracts in the true sense of the word. They are weekly verbal agreements which tacitly admit that the company, on the one hand, will supply the place, the tools, the material, and the opportunity and that the miners, on the other hand, will supply such effective labor that both parties will profit from the arrangement. Prices are seldom discussed at the time of hiring. The miner, in effect, is hired for a definite working place, as a contract miner, and if satisfied, tries to earn as much as he can. If he is not satisfied three courses are open to him: he can quit, he can ask for a change, or he can discuss prices or improved working conditions with the mine superintendent. This rather informal arrangement is due to conditions that are particular to Butte

Jan 2, 1961

By Dieter Birk

"The Atlantic Coal Institute illustrates the potential for high technology employment in Maritime Canada, by using local talent and the latest equipment to address a national market. Since I983, contract research for industry and government has generated 31 man-years of high-tech employment, added $2.3 million to the local economy and contributed new technology for Canadian coal. Industry now has access to new procedures for coal minerals analysis, pyrolysis, and geochemistry applied to industrial problems of exploration, beneficiation, conversion and combustion.Research at the Institute is market-driven, based on cost recoveries from contracts. The financial performance to date exceeds that of similar industrial research institutes in major cities and demonstrates that small isolated laboratories are cost-effective. Economic renewal of Canada's resource industries will require increased R&D which in turn can be a source of local employment and pride. Small research teams are more efficient but require an enlightened policy of contracting-out by big business and big government."

Jan 1, 1987

With the advent of the resources boom in the late 1960s most of the larger scale resources projects in Australasia were commissioned on an æowner miningÆ basis, where the mine owners owned and operated the primary mining equipment. Then, in the 1980s with the arrival of the gold mining boom in Western Australia and elsewhere, a change occurred û most of the mining activities were carried out on a contract mining basis. Over recent years, however, there has been a marked trend amongst larger Australasian open pit mining operations back towards owner-controlled and operated mining operations. The reasons for this are many and are addressed in the paper, but centre on the concept of the owner being prepared to assume more of the mining risk in exchange for the advantage of not having to pay a contractorÆs profit margin. Where mining contracts are entered into, the older æschedule of ratesÆ format is being replaced with less adversarial and more entrepreneurial contract alternatives involving operating cost and risk sharing in a spirit of æfair dealingÆ. Leasing and maintenance issues have also been influenced in recent years by the advent of more flexible contract arrangements with equipment suppliers. Group purchasing has also had some influence for project operators. For many mine owners, the optimal risk management profile involves a practical offsetting of the assumption of mining risk on the one hand, against the removal of litigation risk and potentially reduced operating costs on the other. Potential pitfalls may arise where equipment size and type requirements vary with time or where manpower management, mining flexibility, job skills or safety exposure factors are relevant. These issues are commented on in the context of some well known examples, and an update is provided on contract mining versus owner operation in large scale Australasian open pit mining generally.

Jan 1, 2002

With the advent of the resources boom in the late-1960s most of the larger scale resources projects in Australasia were commissioned on an æowner miningÆ basis, where the mine owners owned and operated the primary mining equipment. Then, in the 1980s with the arrival of the gold mining boom in Western Australia and elsewhere, a change occurred û most of the mining activities were carried out on a contract mining basis. Over recent years, however, there has been a marked trend amongst larger Australasian open pit mining operations back towards owner-controlled and operated mining operations. The reasons for this are many and are addressed in the paper, but centre on the concept of the owner being prepared to assume more of the mining risk in exchange for the advantage of not having to pay a contractorÆs profit margin. Where mining contracts are entered into, the older æschedule of ratesÆ format is being replaced with less adversarial and more entrepreneurial contract alternatives involving operating cost and risk sharing in a spirit of æfair dealingÆ. Leasing and maintenance issues have also been influenced in recent years by the advent of more flexible contract arrangements with equipment suppliers. Group purchasing has also had some influence for project operators. For many mine owners, the optimal risk management profile involves a practical offsetting of the assumption of mining risk on the one hand, against the removal of litigation risk and potentially reduced operating costs on the other. Potential pitfalls may arise where equipment size and type requirements vary with time or where manpower management, mining flexibility, job skills or safety exposure factors are relevant. These issues are commented on in the context of some well known examples, and an update is provided on contract mining versus owner operation in large-scale Australasian open pit mining generally.

Jan 1, 2002

By Jürg Künzle

The use of the underground space has been a recurring issue in human history, whereas the reasons for building subsurface structures have changed over time. In the decades to come, the world will be marked by a variety of underground projects never before seen. This paper describes a series of characteristic challenges of designing and building underground freight transportation systems, with reference to the example of Cargo sous terrain, a privately funded underground logistics project in Switzerland. It provides an overview of contracting practices that allow these challenges to be addressed with success.

Jun 13, 2021

By B. Kenny

The aim of this paper is to provide an overview of existing forms of subcontracting in the South African mining industry. A descriptive framework is developed to understand different subcontracting arrangements. We argue that, in order to do so, it is important to distinguish between labour broking and gang subcontracting. Data resulting from a research project (including an analysis of historical sources, interviews with contractors and focus group interviews with mineworkers) is presented to highlight the implications of changing formations of subcontracting for the South African mining industry in the late 1990s. Apart from the subcontracting of ?traditional? functions, such as shaft sinking, access development, catering and hostel maintenance, contractors are now used in ?core? mining activities. In some instances, whole shafts are ?outsourced? to outside agencies. It is argued that certain of the subcontracting arrangements have serious implications for the ability of the mining industry to improve health and safety standards. Some of the practices can potentially result in conflict between different categories of workers, and, as a result, instability in the industry.

Jan 1, 1999

By W. Fletcher, R. C. Schenk

This paper outlines a well proven and highly successful approach for eliminating many of the problem and frustrations often experienced in plant startup. The approach was developed over a period of 25 years during which some 90 plants were commissioned. This paper discusses startup from the contractor’s perspective and highlights the requirement for detailed startup planning, careful coordination during the project final construction phase, and thorough checkout of equipment prior to introduction of feed. Performance of these services has demonstrated a valuable opportunity exists for the contractor to assist in the training of the plant operating personnel.

Jan 1, 1983

"There is no fast way to add more than 6.4 km (4 miles) of track, most of it underground, to the Sound Transit Link Light Rail system in the Seattle, WA area. But increasingly busy traffic through a number of neighborhoods made it necessary. That’s the challenge a joint venture of several tunneling contractors faced when starting its portion of the $1.9-billion Northgate Link Extension in 2013, and the project is still keeping it busy three years later. Completion will mean just a 14-minute ride from Northgate to downtown for an extra 60,000 passengers by 2030. The transit lines will join 57 km (36 miles) of new and under-construction light rail lines running north, east and south from Seattle.Voters tired of long commute times approved the project, a key part of Seattle’s regional mass transit system, in 2008. The extension is part of a plan adopted by the Sound Transit board in 1996 to connect the region’s major activity centers. The Northgate project is meant to relieve one of the area’s most congested traffic areas by connecting the Northgate, Roosevelt and University District neighborhoods to existing routes including downtown Seattle and SeaTac airport.Sound Transit dedicated more than a quarter of the project’s estimated expense — $440 million -— to general contractor JCM Northlink LLC to handle the tunnel segment. JCM is a joint venture formed in 2013 between Jay Dee Contractors of Livonia, MI, Frank Coluccio Construction of Seattle, WA and Michels Corp. of Brownsville, WI. The contractors regularly collaborate on large-scale projects and brought experience working on a different section of the extension they completed in 2013.JCM project leaders knew immediately that the schedule would be demanding. They had to work around the clock six days a week to meet deadlines. The extension runs through highly populated areas, meaning contractors had to follow strict city noise restrictions between 10 p.m. and 7 a.m. Plus, supervisors needed to manage the scheduling of nearly 250 employees to keep work running smoothly.“We had eight different operations and four different subcontractors trying to work in one tunnel,” said Chris Wood, JCM site project superintendent. “It’s important that we keep work linear. That’s the biggest challenge: keeping a path in and out so you can pour concrete, keep electricians and carpenters going, and accomplish everything else.”"

Dec 1, 2016

By Charles E. Carlsen

Underground construction involves all the legal problems common to the construction industry and adds a nice little group of its own. Elements which will ultimately affect contractor-owner relationship commence to form almost as soon as the owner conceives of the project. A few of these with emphasis on their application to underground construction will be mentioned. (1) During the design stage, determination must be made as to whether the specifications will be general or restrictive. To what extent will the operations of the contractor be controlled? Can he proceed to use any method of tunnel excavation that he desires and only be responsible for the end result or will specific excavation procedures be required? Can explosives be used? Under what restrictions? Are tunnel supports required? How long can the crown behind the heading remain unsupported? What kind of supports are required? What restrictions on the placement of tunnel-lining concrete will be required? Each of you could extend this list for many pages but these illustrations are indicative of decisions that must be made in advance of bidding, and the ultimate decision on each question can have a significant effect on the legal relationships that exist between the contractor and the owner. The owner wants a good job at a fair price. On the other hand, nothing is worse than having a tunnel collapse during the construction period, with its extra costs, loss of life, and delay to the entire project. If the specifications are too restrictive, increased costs of performance are bound to occur. Owners save tremendous amounts of money by obtaining a contractor who has been ingenious in devising the most economical construction procedure. Care must be taken in drafting the specifications so that the benefits of such ingenuity will not be lost. (2) HOW is the contract to be awarded? Will there be open bidding, a restricted list of bidders, or will there be negotiations with a comparatively few contractors? If it is a government project, whether Federal, state, or

Jan 1, 1970

By Erich J. Jacob, Volker O. Meldner

INTRODUCTION Our company has made persistent efforts to utilize the very latest cost-saving technology in tunnel design and construction. However, we were relatively late in joining the clan of slurry shield tunnelers. The challenge came in 1973, when our company was low bidder on a major sewer tunnel in Hamburg, West Germany. The tunnel was to be driven under the harbor region through coarse and fine sands with up to 60 ft hydrostatic head of water. Outer diameter was 15 ft, and length was 2.9 miles. This contract appeared right to enter the new field of slurry face tunneling. We gathered a design-engineering team to develop the machine, called it "Hydroshield", and used it on the project. The good performance of the prototype machine encouraged us to improve and modify the equipment design. The very latest model is now in use on a subway tunnel in Antwerp, Belgium. This tunnel is 21 ft outer diameter and 2.4 miles in total length. In terms of excavated volume it is the world's largest slurry shield contract. While the drive is still in full swing, we are currently preparing for 3 further Hydroshield applications, with diameters ranging from 12 to 32 ft. This paper describes the Hydroshield's salient design features, operational characteristics, construction reliability and performance levels, as experienced in West Germany and Belgium.

Jan 1, 1979

By Bernard A. Grand, Gary A. Almeraris

This project involves the reconstruction of a 1,100 ft. long by 75 ft. wide segment of an existing 4 to 5 track subway under Northern Boulevard in the Borough of Queens in New York City. The project includes widening the existing subway to permit the construction of new inbound and outbound subway (T1 and T2) ramps adjacent to and under existing operating tracks. The plan of the project is shown in Fig. 1. Existing tall buildings along the job site and a contaminated groundwater plume under an adjacent rail yard required construction of slurry concrete walls along the east and west construction limits. Groundwater cutoff across the north and south construction limits of the subway was achieved by jet grout walls built across the subway invert slab between existing track and third rails. The work involved dewatering the construction site to a depth of about 50 ft. below street grade. This is a four year project and includes extensive work to maintain and protect subway and vehicular traffic of over half a million commuters a day through the work area. The project cost was $160,000,000.

Jan 1, 1999