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Online auctions grow, despite continued scandals

South Africa – With recent headlines focused on yet another physical auction scandal, this time championed by billionaire founder and executive chairperson of South African defence group Paramount Group Ivor Ichikowitz, questions are being asked around the traditional auction mechanism and how secure it is against ‘ghost’ and ‘vendor’ bidding.

While debate continues on what is legally admissible but ethically questionable, many buyers are wary of participating in a one horse race under the pretense of another participant on the floor.

Through an informal survey of regular moveable asset bidders, it is evident that bidders would rather participate against bona fide bids and should the highest bidder ultimately fall short of reserve, then a negotiation can follow within a finite timeframe post auction to achieve mutual consensus and close the deal.

This may be a primary driving factor in the continued increase in online auctions, as such online platforms provide clear and accurate data on bidding activity and rigorous under bidder tracking, not to mention extensive reporting capabilities.

Following on international global trends, the adoption of transparent online solutions seems to be on a similar upward trajectory in the local auction industry.

South Africa-based online mining auction company Clear Asset co-founder Ariella Kuper comments: “Our data shows a continued increase in bidding activity, both locally and globally. The online mechanism shows repeatedly that it is a transparent and secure means of trading assets, and the fact that we continue to see exponential growth in this area is testament to this.’’

Each month Clear Asset takes to auction a wide selection of mining assets for the majority of South Africa’s major mines. Later this month, the company will be taking to auction an extensive list of items from heavy weights such as Kumba Iron Ore, Sibanye Gold, Afrimat, MCC, Rockwell and even African Copper (located in Botswana).

International interest in such auctions continues to follow a strong upward trajectory. With tracking of interest in the last five days already coming from Peru, Saudi Arabia, Jordan, the US, Brazil, Australia and across to Namibia, Zambia, Kenya and Botswana, it is becoming evident that the SAA tag line of “Bringing the world to Africa and Africa to the world” is not inaccurate.

Leveraging of foreign exchange movements and advanced due diligence, time continues to be a precious resource and bidders are looking for new grounds and methods to acquire assets.

The key is prime condition pre-owned yellow plant rather than the traditional method of new purchases just because of original equipment-manufacturer warranties. “If a project is urgent or the contract is relatively short-term, there is little justification to purchase brand new when you can acquire a well-maintained, pre-owned asset with low hours or decent condition”, says Kuper.

“At times the wrong assets were purchased for legacy reasons and now mines are looking to free up working capital, and free up space rather than finger point why they were bought”

In addition to Sibanye’s now regular monthly redundant asset clean ups, the assortment of equipment on offer includes CAT D10T, D10R and D10N dozers, an entire crushing plant from African Copper in Botswana, which is basically brand new (no duties payable based SADC trade relations), 30, 50 & 90 t mobile cranes and tower cranes and a large array of Bell and Komatsu ADTs – ensuring opportunity regardless of mid- or junior-tier miners.

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Chantelle Kotze
Chantelle Kotze is a Johannesburg-based media professional. She is a contributor at Mining Review Africa (Clarion Events - Africa) and has created content for the media brand over the past 6 years.