Because clients were asking for specific pieces, the brothers quickly learned what equipment other companies had in their catalogues, and they began posting lists of what was available online. The venture has been a success for close to a decade, but it was a request for proposals by Vale that kick-started the most recent innovation.
Seeking a method of divesting their surplus equipment, while being accountable and still getting good value for their assets, Vale accepted a proposal from the Alexander brothers to set up an online auction that would allow mining companies, as well as members of the public, to bid on used equipment.
Launched this past June, the Trade Floor is described as an online liquidation and acquisition marketplace where everything from drills and jacklegs to spare parts for air compressors, is on the auction block. Bidders have to first register on the website, after which they can bid on any item. A bid triggers an auction, which will remain open for a specified period of time, and the highest bidder is declared the winner.
Selling surplus equipment through third parties is becoming commonplace amongst publicly traded companies that are looking for an efficient and responsible method of getting rid of equipment that’s no longer needed, Matt said. Mine Source’s methodology is designed to account for all the pieces of equipment in a company’s inventory. Even the office water cooler may find itself on the list.
“Mining companies are in the business of taking rock out of the ground and making metals out of it,” Matt said. “They’re not in the business of selling equipment, which is what we do. We’ve developed a specialty to give mining companies peace of mind that things are being done fairly, and that they’re getting good value for their surplus.”
An online resource provides a wider audience than would be otherwise reached, and thousands around the world can participate, he added. The Mine Source site is secure, accountable, and a record is kept of every transaction made to equipment suppliers.
Smaller items such as the nuts and bolts from a piece of machinery are unlikely to go beyond a local source—the high cost of shipping negates any benefit derived from the sale—but larger pieces of equipment are prized around the globe for their role in getting a new mine up and running quickly, while saving the company thousands of dollars.
The high price of metals has made smaller deposits more economical, that before now would have been too costly to mine. Lead times on new equipment can take up to two years—an eternity when the market is hot—so miners are looking to used equipment instead, which can be up and running in as little as six months.
“A lot of these mid-sized companies like the used equipment,” Mark said. “They’ll refurbish it, they’ll strip it down—every nut and bolt is changed out, and it comes out of the shop looking brand new—and they can have it in their plant within six months and running. So that’s one of the big advantages to coming to us.
Mine Source counts companies in South America, Peru, Brazil, Chile, Australia and Mongolia amongst its clients, and the brothers are hoping more miners will view the auction as a viable alternative.
They said they’re grateful to bring Vale on board as their first client, and they’ve already begun shopping around the auction site to a bigger audience.
“To our knowledge, this is the first web-based auction in the mining industry,” Matt said. “Although it’s open to the public to bid on things, this is the first one geared towards the mining industry and mining clients, so we’re pretty excited about it, and we’re looking forward to growing it.”
Already the pair is looking to expand their venture, adding office space and employees to their downtown Sudbury enterprise. After launching the auction program in June, the pair is now on version 2.0, and will continue fine-tuning it to customer specifications.
In the age of the computer, more and more business is done online, and the Alexander brothers are eager to tap into that resource.
“What we’re striving to do is be on the forefront here,” Matt said. “We live in one of the greatest mining camps in the world, and we’re just trying to put those two elements together.”