CHROME and platinum miner Tharisa said on Thursday it had concluded a five-year contract with Cementation Mining for the underground mining of its Tharisa mine in South Africa’s North West province.
The contract is based on an unusual level of transparency on behalf of the contractor with Tharisa agreeing cost plus payments for the work in return.
Termed and “open book” agreement, in which Cementation agrees to lay bare its operating costs, the contract is a depature from the traditional rates-based contract. In that model the cost increases incurred by the contractor are transferred to the client. It has led to disputes in the past.
Gold Fields is currently embroiled in a dispute worth over $700m with a contractor for mining contracts on the Damang and Tarkwa mines in Ghana. Details on the matter, which has gone to arbitration, are sparse but it’s likely Gold Fields declined to pay the contractor on the basis of alleged delivery failures.
Commenting on its agreement with Cementation Africa, Tharisa CEO Phoevos Pouroulis commented that it “represents an important step in unlocking the full potential of our resource base”.
Tharisa began work on its transition to underground mining in the March quarter. The project, which will maintain production from the Tharisa mine for decades, is expected to absorb $500m in capital and operating expenses over the next 10 years.
“Cementation Africa values the trust that Tharisa placed in our capabilities to safely deliver its underground mining operation,” said Japie Du Plessis, MD of Cementation Africa.
