Theoretically, the main driver behind a mining operations’ sourcing
decision should differ from company to company, and within a company
from project to project, but in reality it often relates to cost. Research
confirms that there are a number of factors, including cost, to consider
when choosing between in-house and outsourced mining. While the
literature is rife with factors to consider, little information exists on how to
apply these in practice and the relative importance of the different factors
to be considered.
A study was conducted to determine whether mining is truly a core
competency for a mid-tier commodity specialist mining company.
Furthermore, a decision-making framework for mining operations sourcing
was developed, and the critical success factors that should be adhered to if
outsourced mining is chosen were determined.
The research showed that owner mining is not a core competency for
the mining company investigated. A decision-making framework was
developed using the order winner/order qualifier structure, which can be
used to facilitate the mining sourcing decision. The most important tools at
the disposal of a mine owner’s team to manage a contractor miner are the
social and output control mechanisms, according to the critical success