BOT model can boost emerging contractors, revamp mining

According to B&E International, opening the doors of the mining industry to junior miners and emerging contractors can be boosted by partnerships depending on the build-operate-transfer (BOT) concept.

Experts in integrated crushing, mining, and mineral processing solutions, B&E International brings its experience of not only operating crushing plants but designing and manufacturing its innovative equipment locally, according to the company’s director of plant and engineering, Ken Basson.

“As a committed Level 1 BBBEE contributor, we understand the value of transforming our industry, by building local expertise and capability,” says Basson.

“We’ve therefore partnered with junior miners and emerging contractors to assume some of their initial risk in mining projects and giving them a more profound basis for sustainable growth.”

says Basson

He highlights that new entrants to the mining industry face both technical and financial hurdles. Sourcing a fit-for-purpose processing plant is often a ‘bridge too far’ to capital expenditure. Financial institutions usually require a strong balance sheet, which many young companies do not have. There is also the risk that a new plant may not run smoothly or to specified capacity, demanding a depth of technical expertise not yet developed by a new contractor.

“With our experience of running plants, together with our in-house design and manufacturing capabilities, we now shoulder a large part of the initial risk for the smaller players,” he says. “We design and build the plant to match our BOT partner’s operational needs, and then run it ourselves. The partner pays us only for the final saleable product from the plant.”

The arrangement is a close collaboration with the partner, who must be confident of fulfilling their contractual duties to the end-customer – in the case of a coal-producing operation, for instance. The production experience in B&E International – which has for decades run screening and crushing operations for its account – is what puts their BOT partners’ minds at ease.

“The ‘transfer’ facet of the BOT contract is also a crucial step in developing a new generation of miners and contractors in South Africa,” he says. “This allows our BOT partners to take possession of the plant after an agreed period of time, should they wish to take over the operation of processing activities.”

This allows a junior miner to build its skills base and balance sheet base over a manageable timeframe while mitigating its operational risk and ensuring a solid growth trajectory. Basson also stressed the value of B&E International local manufacturing experience, particularly given the continuous weakening of the Rand against the US dollar and Euro – the currencies in which most mineral processing equipment is sold.

“Our Rand-based manufacturing capability has always been cost-effective,” he said. “This further improves the economics of our plants’ performance and maintenance.”