Price Benchmarking Mining Facilities Management Agreement
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February 13, 2025
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A mine facilities management provider was engaged under a multibillion-dollar 10-year contract to provide a range of facility management services across a large portfolio of mining facilities in Western Australia for a global mining company. Before the fifth anniversary of the contract, both parties were obligated to select an independent expert to perform a benchmarking and indexation assessment. FTI Consulting was engaged to determine the increase in costs to provide services for the management, operation and maintenance of major mine sites and assets for the five remaining years of the contract.
Our Impact
- Our economic experts developed an industry benchmark and forecasted the potential growth in prices whilst taking into account key risks such as labour supply fluctuations and supply chain disruptions, providing evidence-based data to strength negotiation talks.
- The service provider and the mine operator accepted the recommended adjustments to the service index, ultimately strengthening their relationship and ensuring the sustainable provision of services in the future.
- FTI Consulting’s independent report supported the facilities management company’s successful re-negotiation of the services contract for years six to 10 of the 10-year contract with the global mining company.
Our Role
- FTI Consulting conducted a detailed analysis of each operational service provided by the facilities management company to reveal the labour, equipment and other direct costs that were the target of the benchmarking assessment.
- Utilising FTI Consulting’s bespoke forecasting model, our experts built custom indicators for each operational service that blended wage-price indexation, specific cost inflators and industry-level purchaser price indices.
- Our experts tracked how the service provider’s input costs changed over time and how costs were forecast to vary during the remaining five years of the contract.
Published
February 13, 2025
Key Contacts