This page sets out the clauses a mine owner should insist on before signing an O&M agreement for an on-site station, written from the contractor side of the table.
Start with a clear scope split
The first schedule of any O&M contract should be a boundary drawing. It shows exactly where the operator’s responsibility starts and stops: usually from the fuel unloading point or the bulk tanks, through fuel treatment, engines, auxiliaries and switchgear, up to the outgoing feeder breakers on the mine’s medium-voltage network. Anything outside that line, such as the mill substation or the overhead lines to the pit, belongs to the mine unless it is listed.
Grey areas cause most disputes. Typical ones are the black-start diesel set, the station transformer, the compressed air plant, the fire water system and the waste oil and sludge handling. Name each of them in the scope table, with a column saying who operates, who maintains and who pays for spares.
Define availability so it means something
Most contracts promise a station availability percentage. The number matters less than the definition. A useful definition counts the capacity the station could deliver at site conditions, compares it with the capacity the mine called for, and states which hours are excluded: planned maintenance agreed in the annual plan, fuel supply failures caused by the mine, grid or network faults outside the boundary, and force majeure.
Ask for availability to be measured per engine and for the station, and reported monthly with the raw data. That makes it possible to see whether one tired engine is dragging the figure down. Bonus and penalty bands should be modest and symmetrical, so the operator is rewarded for running the plant well rather than for arguing about exclusions.
Staffing, training and local content
A remote mine station usually runs on rotation, with a station manager, shift supervisors, operators, mechanical and electrical technicians and a fuel treatment attendant on each shift. The contract should state the minimum manning per shift and the qualifications for each role, not just a head count.
Most host governments and mine owners also expect local employment and skills transfer. Put a training plan in the contract with named milestones, for example local supervisors taking over shift leadership by a set year. That gives the mine a measurable result and the operator a clear target.
Spares, overhauls and who carries the risk
Medium-speed HFO engines need planned overhauls at fixed running-hour intervals, and the parts for those overhauls often have long lead times. The contract should include a spares strategy: a site store with consumables and critical items, a list of capital spares such as cylinder heads or turbochargers, and a clear rule for who funds each category.
Two models are common. In the first, the operator supplies labour and the mine buys all parts at cost plus an agreed margin. In the second, the operator takes a fixed fee per megawatt-hour or per running hour that includes routine parts, while major overhauls are priced separately. Either can work; the mistake is leaving it vague.
The fuel interface
On HFO stations, fuel quality drives engine wear. The contract should state the fuel specification the mine will deliver, the sampling and testing routine at each delivery, and what happens if a cargo is off-spec. The operator should own the separators, heaters and day tanks, and report fuel consumption against the guaranteed specific fuel consumption every month.
Our guide to choosing HFO engines for a mine explains why fuel treatment capacity is often the hidden bottleneck on older stations.
Reporting, audits and handback
Monthly reports should cover energy delivered, availability, fuel and lube oil consumption, trips and their root causes, safety statistics and the maintenance backlog. A computerised maintenance management system with read access for the mine keeps the record honest.
Finally, agree the handback condition at the end of the term: engine hours since last overhaul, condition of the spares store, drawings and manuals up to date. Without it, a mine can inherit a station that looks fine on the last day and needs a major overhaul the next month.
Who writes this
This guide comes from the USP&E operations team, which runs and maintains HFO and diesel stations for mining clients from our Johannesburg and Cape Town offices. USP&E is an EPC and O&M contractor, not a broker, with 150+ power projects in 45+ countries, 25,000 MW contracted since 2002 and 24+ years in the field. Our operations and maintenance services page explains how we take over and run a station.
Offices: Colorado Springs (1755 Telstar Dr, Suite 300), Knoxville (800 S Gay St, Suite 700), London (162-168 Regent Street), Johannesburg (22 Kildoon Rd, Bryanston), Cape Town (31 Brickfield Road, Woodstock) and China (No. 1 Ningzhou Road, Wuxi). Regions: USA | AFRICA | UK | UAE | CHINA. ISO 9001 and ISO 45001 certified.
Questions about mine power station O&M contracts
How long is a typical mine power station O&M contract?
Many run for three to five years with extension options, so the operator can plan overhauls and invest in training. Shorter terms are common when the mine expects grid power to arrive.
Should the O&M contractor also be the EPC contractor?
It is not required, but one company that built the station and then runs it has fewer interface excuses and already knows the plant.
What availability is realistic for an HFO mine station?
It depends on the age of the engines, the number of spare units and fuel quality. The contract should define how availability is measured before agreeing a number.
Who should hold the spare parts?
The site store is usually owned by the mine and managed by the operator, with a stock list agreed in the contract and reviewed every year.
Reviewing an O&M contract for your mine?
Send us the draft scope, the station single-line diagram and the last year of operating data, and our engineers will point out the gaps before you sign.
For a first conversation, use the operations enquiry form, ring +27 10 822 2324 or send the details to info@uspeglobal.com. Replacement and standby engines can be found in our diesel and HFO generator stock.