A recently introduced online auction for mining equipment is set to eliminate the geographic hurdles associated with traditional on-site auctions.

Local online auctioneer Auction Alliance trialled its first mining-specific online auction in late January, and reported a 60.7% confirmation rate, with reserve prices reached on most items listed.

Online auctions allow the seller to keep the item operational throughout the bidding process, thus maintaining efficiencies, while the need for the buyer to visit various outlying sites to view the item is negated.

In addition, the auction allows for smaller stock volumes from the seller mine, circumventing the accumulation of a stockpile to warrant the operational effort and cost of a traditional auction.

“Potential buyers lack the time to fly out to view and participate in an auction, and are therefore limited in choice as to what is avail- able locally. It is for this reason that provenance of the assets is critical, as well as an ability to register and bid from their desks,” says Auction Alliance director and national head of capital assets Ariella Kuper.

Due diligence is undertaken on all items, along with requests for paperwork proving provenance, which is loaded onto the auction website and is available to the potential buyer.

During the auction, all assets are individually detailed with a timer actively counting down to the closing of the auction, with the starter bid clearly displayed.

Full information on each asset is provided and, if a prospective buyer is outbid, the bidder receives an sms notifying him or her of the increased offer.

If there is an active bid in the last five minutes of the auction, the system extends the period to accommodate slower bandwidth users.

Kuper indicates that buyers often include established brokers and contractors that retail and rent earthmoving and mining equipment across Africa, with commercial mining houses usually positioned as the sellers, as they invariably buy prime new stock from original-equipment manufacturers.

Auction Alliance secured exclusive three-year service agreements for on-site auctioning with mining houses Kumba Iron Ore, Xstrata Coal and the De Beers group in 2011, and intends to move these to its online platform in the near future.

It expects its next online mining asset auction to take place in March this year.

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