The owner’s decision
Mining arrangements typically take one of two commercial forms. In the first, the contractor is engaged for blasting only, while the owner funds the specified labour and materials. In the second, the contractor takes on a broader extraction scope and bills by an agreed metric tonne or other defined unit. A third variation applies where the owner supplies material and the contractor recovers it on its own account. Whichever model is used, the applicable arrangement should be recorded for each item of work so there is no ambiguity later.
Beyond the commercial model, the parties should agree upfront who supplies equipment, who coordinates the schedule, who certifies completion, and what event makes a quantity billable. Qualified people must manage the technical and safety work throughout. Modomines can support this by linking the work order, authorised issues and certified output from the outset. Paying by an undefined “unit” invites both disputes and inflated claims, so every billing unit should be clearly defined before work begins.
The evidence needed
A well-drafted mining contract should state the work boundary, the mineral or material involved, the billing unit, the rate, the measurement method, any exclusions, how downtime is treated, the recovery terms and the approval process. The parties responsible for regulated activities must also hold the applicable licences and credentials. PESO’s official guidance distinguishes between licensing for the possession, use and transport of commercial explosives, and agreeing who bears the cost of explosives does not give anyone permission to handle them.
“A contractor's rate only becomes meaningful when the exact scope of work and method of measurement are clearly defined. Without these baselines, a quote is just an arbitrary number that invites hidden costs and disputes.”
— Super Administrator
Wherever practical, completed work should be supported by an independent record, such as a competent survey, verified movement, a machine record or a signed service measurement suited to the contract. The contract unit in Modomines software therefore be configured to match what is being measured and paid for.
The cost of getting it wrong
A contractor may bill for material moved twice, work outside the order, or quantities measured on incompatible bases. Owner-issued fuel can be left out of recoveries, and pilferage can hide behind a generic “consumed” entry. Equally, a legitimate contractor may be underpaid when the owner cannot find the work certification or returns. Separating work measurement from payment approval limits the chance of one person creating and settling an unsupported claim. Modomines preserves the work order, measurement and revisions so both parties can examine the same evidence. For controlled materials, any unexplained difference in custody must go straight to the responsible, licensed personnel, not be absorbed into an ordinary end-of-month stock adjustment.
The applicable state variation
The actual concession and site conditions, the competent authorities, contractor obligations and applicable labour requirements should all be checked. Explosives controls arise under central rules, with licensing and local authority involvement, so they should not be described as optional state customs. The word “contractor” is a description of a role, not proof of a statutory qualification, so the credentials required for the actual work and location should be recorded.
The records that support control
The contractor master should be linked to the contract version, scope, agreed unit, rate changes, credentials, work certification, issues, returns, recoveries and bill. Where staffing permits, the person requesting work should be different from the person verifying quantity and approving settlement. Subcontracting should be recorded explicitly, so that no unknown party operates under another contractor’s identity.
