Supplying services to a mine site — whether labour hire, equipment, maintenance, logistics or consumables — creates a receivables environment that differs materially from urban commercial supply. The geographic isolation, the roster-based workforce, the multiple approval tiers and the cash flow dynamics of resource projects all contribute to payment risk that standard credit terms do not adequately address.
The approval chain problem
On a mine site, the person who orders your services is rarely the person who approves payment. A site supervisor may verbally engage your crew for additional work. That work may not be captured on a formal purchase order. The invoice goes to accounts payable at a capital city head office, where it is rejected because it lacks a PO number — a PO that the site supervisor did not generate because the work was unplanned.
This is the single most common source of mining services invoice disputes. The resolution requires escalation from site to head office, which takes time and internal goodwill that evaporates quickly. The structural fix is documentation at the point of engagement: a written works order, signed by whoever has authority at site, before work commences.
Cost-plus contracts and disputed quantities
Cost-plus contracts — where the client pays actual costs plus a margin — create ongoing measurement disputes. Your timesheets say 240 hours; the client's site measurement says 210 hours. Your material usage report shows $18,000 of consumables; the client's records show $14,000. These disputes are not unusual in cost-plus environments. They are resolved by contemporaneous records — timesheets signed at shift end, material delivery dockets signed by site personnel, daily reports sent and acknowledged.
Seasonal cashflow and project milestones
Resource projects often have defined milestones at which invoicing is permitted. If your contract ties payment to project milestones rather than time periods, the project's timeline is your cash flow timeline. A milestone delay — wet season shutdown, equipment failure, regulatory hold — directly delays your invoice date. Contracts with milestone-based payment should include provisions for what happens when milestones are delayed through no fault of the supplier.
Head office refusal of site-authorised work
A recurring pattern in mining services recovery is head office refusing to honour commitments made at site level. The site manager agreed to the additional scope; head office did not authorise it and will not pay for it. This dispute has a legal character — whether the site manager had actual or apparent authority to engage the additional work — but it is best prevented by your credit and contracting process rather than resolved through litigation.
Before commencing work, confirm the authority of the person engaging you. For significant additional scope, obtain written confirmation from a nominated head office contact before the work starts. If that confirmation cannot be obtained in time, document why it was not obtained and proceed only when the commercial risk is acceptable.
Practical steps for mining services suppliers
- Require a purchase order or written works order for every engagement, including variations
- Ensure timesheets and delivery dockets are signed by site personnel at the time of work
- Submit invoices promptly — delays in invoicing extend the payment cycle significantly
- Know who has payment authority at head office and build that relationship before an account goes overdue
- Consider security over mining plant or equipment under the PPSR if you supply goods
If you have outstanding mining services invoices that have stalled in a client's approval process, speak to Merion about escalation strategies.