CLIFFORD SMEE Outside of North America, notably in Australia, there is a trend towards greater procurement centralisation
A recent survey by UK-based information solutions and technologies company Timetric’s Mining Intelligence Centre (MIC) has found that the majority of North American miners still make purchasing decisions for heavy mobile mining equipment at the mine sites rather than at their corporate head offices.
Over 100 mine managers were asked to identify specifically where decisions were made for the purchasing of heavy mobile mining equipment, at the mine site, centralised within the country, centralised elsewhere within North America or globally outside the region.
MIC says that, in the wake of the current cost reduction measures across the mining industry, it is interesting to discover that, across North America, the majority of decisions are still made at the mine site, accounting for about 65% of all final decisions.
After the mine site, final decisions were most commonly centralised within the country, accounting for 25% of operations.
This was high compared with other global mining regions, as in Africa, Asia and Latin America, only around 40% of decisions are made at the mine sites.
However, MIC notes that more than 28% of respondents said they expected that more centralisation would occur in all procurement categories, while fewer than 12% of respondents indicated that centralisation would decrease in any category.
Nonetheless, Timetric says the majority of respondents do not expect any change at all, which indicates that North America is rather stable in terms of procurement centralisation.
MIC senior mining analyst Clifford Smee points out that in other mining regions, notably Australia, there is a trend towards greater centralisation, due in part to many miners reducing costs across their operations through central contract negotiations.