Based on yearly auction sales, mines have proven to be motivated and realistic sellers, where there are bargains for buyers who are willing to put a little effort into fixing something that they have bought at an auction, says auction house Aucor Auctioneers mining expert Charles Neser.
“There is a huge number of suppliers that supply goods to the mines – the suppliers attend auctions to buy second- hand items, refurbish them and resell them to mines.”
Mines sell big yellow equipment, dump trucks and excavators, which can be bought second-hand from another mining house on auction.
At these auctions, mines sell sought- after goods, such as scrap metal, bakkies and construction equipment, Neser adds.
He explains that redundancy is the first reason why mines auction off their equipment – assets become redundant because mines change their production processes and their safety standards no longer allow them to use those assets anymore. Such assets may also have reached the end of their life span and have to be replaced.
Neser mentions that, in some instances, it may not be a mine’s priority to sell its assets to make a profit from the sale, as it would prefer offering its staff first option on buying the equipment through in-house sales and auctions. Aucor Auctioneers also offers in-house auctions of bank repo vehicles, truck and construction, warehouse, catering, engineering and other loose assets, regional property auctions as well as national multiproperty auctions.
“It has become a trend in the mining industry that we need to offer a lot of the assets to the staff working at the mine first. “Obviously, we facilitate those sales on behalf of the mine; however, the challenge we face is having to meet all the expectations of all the different parties involved in this type of sale.”
Neser says owing to the strict health and safety requirements adhered to by all mines, it is not always possible for prospective auction bidders to gain access to the various mine sites in order to inspect the assets earmarked for disposal, by the same token once an auction has been concluded, the successful auction bidder may find it difficult to operate, load and/or remove newly bought assets from the mine. Although this may be a challenge, Aucor, though its years of industry-specific experience, manages expectations of both the buyer and the seller while comfortably operating within the prescribed parameters.
Auction houses need to be completely transparent when conducting auctions to ensure that all sales are fair to both the clients and the buyers.