Most North American miners make buying decisions on site

26 June 2015

Miners in North America prefer to make procurement decisions at the mine site rather than at corporate head office, according to research.

A survey from Timetric’s Mining Intelligence Center (MIC), asked more than 100 mine managers where they made decisions about purchasing heavy mobile mining equipment - at the mine site, centralised within the country, centralised elsewhere within North America or globally outside of the region.

The Timetric report, Purchasing Trends and Intentions in Mining in North America, 2015, found around 65 per cent of all final decisions were made at the mine site. After the mine site, final decisions were most commonly centralised within the country, which accounted for 25 per cent of decisions.

More than 28 per cent of respondents expected more centralisation in decision making in the future, while fewer than 12 per cent said centralisation would decrease. But most respondents did not expect any change at all.

Timetric said the proportion of purchasing decisions made on site in North America was high compared to other global mining regions. In Africa, Asia and Latin America, around 40 per cent of decisions are made at the mine site.

"In other mining regions, notably Australia, we saw a trend towards greater centralisation, due in part to many miners reducing costs across their operations via central contract negotiations,” said Clifford Smee, senior mining analyst at Timetric's MIC.

“However, we are not seeing this trend as strong in the US, which still prefers to handle most decisions at the mine sites. For instance the data revealed that close to 90 per cent of precious metals purchasing decisions are still made on site, hence a supplier to precious metals mines is best advised to continue their relationship with on-site personnel.”

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