Wrong partner can be the death knell for mine projects
WEALTHY companies are not always the key to a successful project when it comes to mining.
Queensland University of Technology research has found mining firms that bring new partner in to exploration projects increase the risk of termination, even if the new partner has deep pockets.
QUT investigated more than 1000 joint ventures in the Australian mining industry to discover why some failed and some succeeded.
Researchers found stability was the key.
They found it provided security in an industry affected by changing regulations and wider economic factors.
Lead researcher Dr Rene Bakker said bringing on new partners sometimes increased the termination risk.
"A new partner can upset the status quo, disrupting the balance of power and making the project more likely to fail," Dr Bakker said.
"Joint ventures can be a great resource for mining firms if executed correctly. But, as one mining executive said, you have to be very careful who you get into bed with."
But Dr Bakker is still predicting joint ventures will be common as discoveries were becoming harder and costlier.
- APN NEWSDESK