Negotiating for a Mining Contract

You don’t just go into an area, bring your equipment and start mining. No, there are whole lot of aspects that should be secured for it. While you can make handsome profits in mining as well as doing side hustle for it such as when you buy YouTube views and publish it to the internet, the very first thing that should be done is to know your worth and what has to be done.

Know Your Asset

Always the starting-point for any development of mining or mineral resources is estimating the following:

  • Continuity
  • Quality
  • Quantity and
  • Extent of resources and reserves

Without getting an estimate of the latter, it would be impossible to even get started with your mining operation. You’ll need to have a thorough understanding the moment that the proposal is raised.

To this extent, make sure that you have a transparent, accurate and robust appraisal of the available natural resources for exploitation. Additionally, you might need expert help from an external source to make sure that you have the right appraisal.

Right after establishing a relationship with an expert, be sure to collaborate and develop capacity in your country of choice. Focus on creating detailed report on assets you trust and that can set the foundation from which you could negotiate.

Know the Value of Land to be Acquired

You must be aware that it is possible to acquire the land by agreement but, also through compulsory acquisition. It is imperative to know where the company is coming from in creating benefits for everyone. Being the owner or manager, you should have the knowledge of potential benefits right from the developer’s point of view.

Say that the projected ROI of the company isn’t met, then the project may likely put into a halt. Thus, see to it that you have factored in the rate of return, royalty rates and the discount from risks such as security, environmental, financial and political. While it sounds costly, yet you should look at it as an investment in the long run. Because through this, you’re going to appreciate better your mineral resources and acquire mutual beneficial deal for both parties.