Contract Engineer Training Session -1

Contract Management – Mining

Questions
1. What is a contract?

It is an agreement that the company rights are written and signed by two parties. The
components of contract are scope, time, opportunity, and profit. Payment and warranty are
such topic which`s discussed in contract.

2. What is a clause?

Detail part to explain and terminology of the topic.

3. What is rise and fall?

4. What is an Indemnity?

Consequences that must be paid for something loss.

5. What is force majeur?

Unplanned case or case that do not told in contract and need follow up as soon as possible.

6. What are the different types of contracts available?

main contract, sub-contract, PVA, plant hire, labour hire, service contract, supply contract

7. What is the ‘scope of work’?

It means that the working areas must be concerned, for examples like coal loading, quantity,
etc. Anythings out of the scope doesn`t permitted without special authorization.

8. What is a risk assessment?

Process to appraisal risk about risk rate, effects, cost will be lost, etc, so that it can be
managed.

9. What type of contract should be used in the following situations and give
reasons?
a. Contract for exploration works on a mining lease. There are a number
of skilled contractors in the industry. Owner wants bulk sampling to be
undertaken.

main contract
 b. New infrastructure needs to be developed to enable coal to be
transported from the mine for export. There are other projects in the
region and the owner would prefer to share the capital cost of
constructing the infrastructure with another developer.

subcontract

c. The owner intends to develop a new port for export of coal. There is a
limited window of opportunity to develop the port and the project is on
the critical path so the port needs to be developed in record time. There
has been only limited opportunity to scope the preferred port site.

d. The owner of a project wishes to explore the possibility of constructing

a railway for transport of coal from its mine but is uncertain at this stage
whether it is feasible to jointly develop the railway with a third party but
wishes to explore the possibility without giving any binding
commitment at this stage

Service contract

e. The owner is developing its first mining project in Indonesia and seeks
to employ a mining contractor to operate the mine.

Main-contract

10. Dispute Resolution

a. What are the steps taken to resolve a dispute

Back to the contract – if it doesn`t mention in contract detail we can discuss or make an
explain agreement

11. Contract Administration – write letters for the following situations

a. Client lowers production targets
b. Client penalises the contractor for coal loss
c. The coal subcontractor goes on strike
d. Local police want an AC
e. Local school want Rp 20 M for a school excursion

12. Negotiating a new contract

a. How would you plan for the meeting

Calling new partner candidate which`s people in contract duty for presentation and give
portfolio about contract plan.
 b. Who will attend

Commercial manager, GM, Op`s M, project manager.

c. Strategy

d. Behaviours

e. How to Deadlock