Opening the doors of the mining sector to junior miners and emerging contractors can be boosted by partnerships based on the build-operate-transfer (BOT) concept, according to B&E International.

Experts in integrated crushing, mining and mineral processing solutions, B&E International brings its experience of not just 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 importance of transforming our industry, by building local expertise and capacity,” says Basson. “We have therefore partnered with junior miners and emerging contractors to assume some of their initial risk in mining projects and giving them a firmer basis for sustainable growth.”

He highlights that new entrants to the mining sector face both financial and technical hurdles. Sourcing a fit-for-purpose processing plant is frequently a ‘bridge too far’ in terms of 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, combined with our in-house design and manufacturing capabilities, we shoulder a large portion of this initial risk for the smaller players,” he says. “We design and build the plant to suit our BOT partner’s operational needs, and then run the plant 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 assured of meeting their contractual obligations to the end-customer – in the case of a coal-producing operation, for example. The production experience in B&E International – which has for decades run crushing and screening operations for its own account – is what puts their BOT partners’ minds at ease.

“The ‘transfer’ aspect of the BOT contract is also an important step in growing a new generation of miners and contractors in South Africa,” he says. “This allows for our BOT partners to take ownership 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 balance sheet and skills base over a manageable timeframe, while mitigating its operational risk and ensuring a sound growth trajectory. Basson also emphasises the value of B&E International’s local manufacturing experience, especially given the steady deterioration 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, and is becoming increasingly so,” he says. “This further improves the economics of our plants’ performance and maintenance.”