500,000 t/a Wollastonite Mining — Jiangxi, China

Scope: operation only, on a fixed-cost contract. Outcome: standardised mining practice implemented across the site, with ore dilution held strictly below 5%. Here is why an industrial mineral makes that single number matter more than it would on a metal mine.

• Location: Jiangxi, China
• Mineral: wollastonite, an industrial mineral
• Capacity: 500,000 t/a
• Xinhai scope: O — mining operation, under a fixed-cost contract
• Verified outcomes: standardised mining practice across the operation; ore dilution held strictly below 5%

Background: an industrial mineral is judged differently

Wollastonite isn’t a metal. That changes the job.

With a gold or copper ore, a bad tonne gets diluted into the blend and the smelter or the leach circuit absorbs some of your sins. Industrial minerals don’t work that way. Wollastonite is sold on whiteness, brightness and needle shape, into ceramics, friction materials, plastics and paint. Those buyers write specifications, and they reject on colour. Dark gangue rock mixed into the ore doesn’t just cost you a few points of grade — it can push the product out of spec entirely.

This site is a wollastonite mine in Jiangxi, China, sized at 500,000 t/a. Xinhai took over the mining operation under a fixed-cost contract. The scope was the mining itself, and the page below sets out what that covered and the two outcomes recorded against it.

Scope: O only, on a fixed-cost contract

Our scope here was the letter O — operation. Nothing else. No design institute package, no equipment supply, no construction contract. Xinhai runs the mining; everything outside the mining operation stays with the owner.

The commercial structure matters as much as the technical one. A fixed-cost contract means the contractor quotes a price for the work and then lives with whatever it actually costs to deliver. Drilling meterage runs over? Contractor’s problem. Loader down for a week and the cycle slips? Contractor’s problem. Consumable prices move? Same answer. What the owner buys is a known cost per unit of production, and someone else carrying the operational variance.

Here is where the line sits:

• Transferred to the contractor: execution risk — productivity, equipment availability, labour, consumables, and cost overrun on the agreed scope.
• Kept by the owner: market risk and resource risk — product prices, sales contracts, and the geology itself.

Any contractor who tells you a fixed-cost deal transfers everything is selling something. It transfers execution risk. That’s the honest description, and it’s why the model tends to suit owners who already know their deposit and simply want the mining done to a standard, at a number they can budget against.

How a mining operation is held to a standard

Standardisation in a mine is unglamorous work. There’s no single clever fix.

It means one written way to do each step of the cycle, and one only. It means the ore–waste contact gets marked out before the blast, not argued about after it. It means blast design tied to the geometry you actually have rather than the pattern someone drilled last month. Shift records exist, get read, and change what happens tomorrow. And the safety and environmental rules are the same rules on a slow week as on a good one — which is exactly when discipline tends to slip.

None of that is exotic. Across the industry, standardisation of this kind comes down to two ordinary things: written procedures covering each step of the cycle, and shift records that are read rather than filed. The difficulty is never in describing the system. It is in running it every shift, including the shifts nobody is watching.

Any site that has drifted from a defined procedure is harder to bring into line than one started clean, wherever it is in the world. Habits are already set. Crews have a rhythm that works for them, and you’re asking them to change it while production continues. That work is people work as much as engineering work, and it’s why an operations contract lives or dies on supervision quality rather than on the equipment list. For the wider picture of how mine operation sits alongside the other delivery stages, our mineral processing EPC overview lays out where each one starts and stops.

Why dilution is the number that matters here

Dilution is waste rock that ends up in your ore stream. Every tonne of it gets drilled, blasted, loaded, hauled and handled at full cost, then contributes nothing to saleable product. On a metal mine that’s a margin problem. On a wollastonite mine it’s a product-quality problem as well, because the material coming in with the ore is usually the darker, harder, iron-bearing rock that pulls brightness down.

So you attack it where it’s created — at the contact, at the blast, at the loading edge — not downstream. Grade control drilling defines the boundary. Blast design keeps that boundary from being smeared. Loading discipline stops the operator taking one extra bucket of hanging wall because it’s easier than repositioning. No amount of clever processing recovers what a sloppy face gave away. Downstream crushing and sizing equipment can shape a product; it can’t unmix rock.

Dilution also has to be measured to be managed. That means a number produced shift by shift from survey and grade control data, compared against the plan, and handed back to the people who can change it. A figure calculated once a quarter tells you what happened; a figure calculated every shift tells the crew what to do differently at the next face. On an industrial mineral, the same discipline protects the specification the buyer signed up to, which is why loading and hauling equipment selection matters alongside the procedure — see our mining equipment range for the classes of machine involved.

Outcome

Two things came out of this contract, and we’ll state only those two.

• Standardised mining operations were implemented across the site.
• Ore dilution was held strictly below 5%.

We don’t publish cost, schedule or production figures for this contract, because they aren’t in our verified project records. If you see a contractor quoting precise savings percentages on someone else’s mine, ask which document those came from. Xinhai reports more than 600 EPC+M+O projects across more than 100 countries and regions, according to the company’s published figures — but a project count isn’t a result, and we’d rather show you the one number this site is accountable for.

What this means for your project

An O-only contract fits a specific situation. You have a deposit, you have a plant or a buyer, and what you don’t have is a mining team running to a standard you can defend to a regulator, an auditor or a customer. For owners without an in-house mining team, contracting the operation avoids building that capability from scratch; whether that’s the right route depends on how long you expect to run the deposit. A fixed-cost structure puts a ceiling on what the agreed scope costs you; changes to that scope are priced separately.

It’s a poor fit if your orebody is still poorly defined, or if the mining method itself is in question. Fix that first — those are engineering questions, not operating ones.

Xinhai has been working in mining since 1997, and the group’s mine-construction company holds a Class-A qualification for general contracting of mine construction projects in China. Xinhai operates under ISO 9001, ISO 14001 and ISO 45001 management systems. You can browse other project cases, read the company background on our about page, or look at the processing solutions we build around specific ore types.

Want to talk about a mine that’s already running and isn’t running well? That’s the situation this contract model is built for. Get in touch and tell us what’s happening at the face.

Frequently Asked Questions

How is a fixed-cost mining contract different from cost-plus?

Under a fixed-cost contract, the contractor quotes a price for the mining work and absorbs the difference if delivery costs more than expected. Overspend on drilling, consumables, labour or equipment downtime sits with the contractor. Under cost-plus, the owner reimburses actual costs and pays a fee on top, so that variance stays with the owner. Fixed cost gives you a budget number you can defend; it also means the contractor needs a clear scope and a reasonably well-defined orebody before pricing, because unpriced geological surprises are a common way the arrangement breaks down for both sides.

How do you actually keep ore dilution low?

You control it at the face, not in the plant. Grade control drilling defines where ore stops and waste starts, blast design keeps that boundary from being smeared during the shot, and loading discipline stops operators taking the extra bucket of waste because repositioning is inconvenient. Then you measure it, shift by shift, and feed the result back to the crew. On this Jiangxi wollastonite contract, dilution was held strictly below 5%. What is achievable on your deposit depends on the geometry of the orebody and the contact, and is assessed on site before any figure is committed.

Who staffs and trains the crew on an operations contract?

Staffing is agreed contract by contract. Xinhai's operations scope can include human-resource management alongside production, equipment, safety and environmental management, so the split between contractor-supplied and locally hired staff is defined in the contract rather than fixed in advance. Where training sits inside the scope, it covers the mining cycle, equipment operation and maintenance, safety rules and record-keeping. Xinhai reports over 700 technical experts according to the company's published figures.

How long does it take to hand over an operation that's already running?

It depends on the state of the site, and anyone who quotes you a fixed handover period before visiting is guessing. A mine already working to a defined procedure transfers quickly. A mine that has drifted from a defined procedure takes longer, because you're changing established habits while production continues, and the sequencing has to be agreed with the owner so output isn't lost during the transition. The realistic path is a site assessment first, then a scope and mobilisation plan built around what that assessment finds.

Is 500,000 t/a a big enough operation for a contractor to take on?

Yes. Mid-scale industrial mineral mines are a common fit for operations contracting, because the owner often has strong commercial and market knowledge but a small technical team. Xinhai reports having served more than 2,500 mines across more than 100 countries and regions, according to the company's published figures, spanning a wide range of scales and over 70 ore types. The question that matters is not tonnage but whether the scope, the orebody definition and the commercial structure are clear enough to price.