Five Negotiation tips for mining companies: #5 get all of the issues on the table
- By Pilot Law LLP
For a mining company, going into a negotiation there are often multiple issues to resolve. It is important to get all of them on the table before you start. Nothing can derail a negotiation faster than raising new issues at the last minute. Besides suggesting bad faith, it can often put parties back to square one and put all previously resolved issues back in play. Often the result is no agreement where one was indeed possible.
A junior mining company is negotiating an option and joint venture with a major. The usual issues are payments, work commitments and term. But look at the other issues that could be raised:
• area of mutual interest
• royalty and royalty buy down rights
• dilution formula
• land relinquishment and right to reacquire such lands
• property access
• access to technical information
• assignment rights
Raising these issues at the beginning not only demonstrates that you know your business, but lets you give on less important issues in order to reach an agreement on the more important ones. Even if you raise issues which may be beneficial to the other side (royalty buy down, for instance), you can get the first offer in and improve the final result (see Negotiation Tip No 3).
And finally, looking at all of the issues lets parties assess what their interests are, before taking positions that may be hard to change. Remembering that the order should be issues then interests then positions, will help you get to a win/win deal as quickly as possible.
“Get all the issues on the table” is the last of five negotiation tips for mining companies that I am sharing with you.
Pilot Law LLP
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