A new contract win in the resources sector is the kind of news a mining services business waits months for. The tender process is finally over, the scope is signed, and the calls start about crew, plant and mobilisation dates. For many owner-led contractors working the Bowen Basin, the Surat and the resources corridors feeding Gladstone and Mackay, this is also the moment the business quietly becomes the most cash-tight it will be all year.
That is not a contradiction, even though it looks like one from the outside. The contract is priced to be profitable, the client is a reputable operator with no doubt about paying, and the margin on the job is sound. The problem sits entirely in timing. Everything the contract requires, crew recruitment, plant relocation, PPE, site inductions, insurances and often a performance bond, has to be paid for before a single tonne is moved or a single hour is billed.
Most contractors know this in the abstract. Far fewer have actually modelled what it costs in dollars and in weeks, which is exactly the gap that turns a genuinely good year into a genuinely stressful quarter.
The Costs That Land Before the First Invoice
Mobilisation spend adds up fast and almost all of it lands in the first few weeks of a contract. Crew need to be recruited or rostered onto a DIDO or FIFO pattern, accommodation or camp bookings need to be locked in, plant needs to be transported, leased or purchased, and every worker needs a site-specific induction before they can step onto site. Insurance certificates and performance bonds are usually a condition of starting at all, and none of it is optional or deferrable.
Meanwhile, payment terms with mining companies and head contractors are typically thirty to sixty days from a certified invoice, and that first invoice often cannot be raised until a full period of verified work, sometimes a full month, has actually been delivered. Stack the two together and the gap between the first dollar out and the first dollar in can stretch past eight to ten weeks on a contract that is, on paper, comfortably profitable from day one.
A Profitable Contract Can Still Break the Bank Account
The P&L will show the contract earning margin from the outset, because accounting profit recognises revenue and cost against the work performed, not against when cash actually moves. Cash flow tells an entirely different story. The heavier the mobilisation, the deeper the trough, and a contractor running two mobilisations at once, renewing one contract while starting another, compounds the gap across both fronts simultaneously. This is the point where a business that looks strong on its financials can find itself negotiating an overdraft extension or delaying a supplier payment, not because the work is unprofitable but because the cash has not caught up with the ledger yet.
Pricing the Gap Into the Bid, Not Discovering It Afterwards
A well-run contractor treats mobilisation cash as a line item to negotiate before the contract is signed, not a surprise to manage afterwards. That can mean asking for a mobilisation payment or an accelerated first milestone, structuring progress claims fortnightly rather than monthly where the head contractor allows it, or simply knowing the number well enough to arrange a facility ahead of the gap rather than during it. This is precisely the kind of timing risk a 13-Week Cash Flow Build is built to model, mapping the actual weekly cash position through a mobilisation rather than relying on the annual P&L to reassure everyone that the contract is a good one.
The Retention Layer Most Contractors Underweight
Beyond invoice terms, many resources sector contracts hold back a retention percentage or require a performance bond that is not released until practical completion or a defects liability period passes. On a contractor running several projects at once, that retention adds up to a meaningful slice of revenue sitting outside the business’s control for months, layered directly on top of the mobilisation gap already at play. Recognising that retention as trapped cash, not lost revenue, changes how it gets planned for rather than simply absorbed.
None of this means the contract was not worth winning. It usually means the win came with a cash timing question that never got asked in the excitement of the signature, a pattern we see across Queensland resources and infrastructure contractors more than almost any other industry we work with. Building that number before the tender is signed, rather than discovering it during mobilisation, is the kind of forward planning that usually sits with whoever is running the numbers day to day, whether that is an internal finance hire or a fractional CFO brought in specifically for contract-heavy periods like this one. If mobilisation timing, retention or contract cash flow modelling is something your business is navigating right now, a discovery call is a good place to start.
Frequently asked questions
Why does winning a new mining services contract sometimes create a cash flow problem?
The costs of taking on a new contract, crew recruitment, plant mobilisation, inductions and insurances, usually land weeks before the first invoice can even be raised, let alone paid. The contract is genuinely profitable on paper, the cash just has not caught up with the ledger yet, which is a timing gap rather than a profitability problem.
What is contract mobilisation cost in the mining and resources sector?
It is the spend required to stand a crew and plant up on a new site before any billable work begins, including recruitment, DIDO or camp logistics, plant transport, safety inductions and site-specific insurances. On a sizeable contract this can run to several weeks of cash outflow before the first certified invoice is even submitted.
How long do mining companies and head contractors typically take to pay invoices?
Thirty to sixty days from a certified invoice is common across the sector, and that invoice usually cannot be raised until a full period of verified work has been delivered. Combined with mobilisation spend at the start of a contract, the gap between the first dollar out and the first dollar in can run past two months.
Should a contractor negotiate a mobilisation payment before starting a new job?
It is worth raising before the contract is signed rather than after mobilisation has already begun. An upfront mobilisation payment, an accelerated first milestone or fortnightly rather than monthly progress claims all reduce the cash gap directly, and head contractors are usually more open to the conversation before terms are locked in than after.
What is retention money and how does it affect a contractor’s cash position?
Retention is a percentage of each progress claim, often five to ten percent, held back by the client until practical completion or a defects liability period passes. Across several concurrent contracts that adds up to real cash sitting outside the business’s control for months, which is precisely the kind of trapped cash a Working Capital Unlock is designed to map and release.
How can a mining services contractor plan cash flow before bidding on a new contract?
Modelling the mobilisation period on a weekly basis, rather than relying on the annual P&L, shows exactly when the cash trough hits and how deep it runs before invoicing catches up. A rolling cash flow forecast built before the tender is signed turns that into a number the business can plan a facility around, rather than a surprise it manages mid-contract.
Can a genuinely profitable contract still put financial pressure on a small resources contractor?
Yes, and it is one of the more common patterns we see in the sector. Profit and cash timing are two different measures, and a contract can be priced well and still create several weeks of real financial pressure if the mobilisation and payment terms have not been modelled and funded ahead of time.
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