The global explosives industry supplies the blasting needs of every mining company in the world, regardless of their size or type of mineral. The mining and metal extraction industry relies on these explosive products and services to break the rock so they can extract the minerals they contain.
Despite explosives being a critical input for many mining operations, the underlying supply dynamics are often only partially understood by mining companies, which can lead to sub-optimal arrangements for both the supply and use of explosives.
Ok, but what does this mean to me?
In short, this means there is a need to really dig into the technical and commercial aspects that sit behind each supplier’s offer to the market. Perceived understanding of a how a market works can develop over many years and for a variety of reasons but those perceptions don’t always keep up with the pace of change in the underlying marketplaces and so they should be tested.
Fully understanding the quality and performance of the available products, together with the new technologies available in the market is necessary to ensure appropriate product selection. The temptation can be to simply default to what has always been done on a site without evaluating if that remains the best option. Correct product selection and application can have significant impacts on safe blasting, the blast outcomes, environmental compliance and, of course, the total cost of ownership.
From a commercial point of view, what are the explosives market drivers I should be aware of?
There are many important factors to take into account. For example, the relevance of ammonia, fertiliser, natural gas, shipping, legislation, previous contracts, contract lengths and end dates (and how they all interact with those of other buyers in the same market), duties and spare capacity of production plants are all important, as are the relevant local rules and regulations with respect to explosives storage, transport and use.
Building in an appreciation of the inter-relationship of all the different relevant markets (local and global) ensures that the full range of supply options are evaluated, together with the risks and rewards of each one – in other words, stepping back and evaluating what factors are important for and impact your supplier as well as those that impact the mine.
Ultimately, the aim is to establish fair and sustainable contracts that provide the foundation for building closer supplier relationships over an extended period of time as this is where value above and beyond the purchase price of the explosive products and services can be delivered.
At Moncourt Group we understand both the local and global drivers so we can deliver deep market insights and specific knowledge to allow our clients to drive real value from their current and future contracts. We have a global network that ensures our clients have the information they need, to make the best decisions for their business.