formed a new, dedicated vehicle in Bermuda, designed to meet the specialist insurance needs of the global mining industry.

And newly-formed Bermuda-domiciled Strategic Risk Management Group (SRM), will be the managing agent for the new Class Three insurer, Mining Insurance Ltd.

(MIL).

MIL is being backed by Bermuda-based Centre Re, which is providing research and development as well as office space.

SRM director, treasurer and chief financial officer Timothy Batchelor said: "There has been a lot of talk about the advantages of doing business in Bermuda including the flexibility and creativity here. There's capital available, should we need it going forward. There is also the expertise.

"We have a very capable firm of lawyers in Milligan-Whyte & Smith with Bala Nadarajah and Bill Gravely. That quality of legal advice is not readily available in other offshore markets.

"It's the creative people like those at Centre Re and XL Insurance who share the vision and wish to be customer-focused, developing alternative risk transfer solutions to the conventional ones found in the traditional marketplace.

"These people have the vision and that is why Bermuda has such a bright future as a marketplace.'' MIL is capitalised at $250,000, although it could change in the future.

Already, nearly 30 mining companies have committed to the development of this project.

SRM believes that between 500 and 600 mining companies could eventually be interested in the new products. Client meetings are being held now because mining is about to start its growth curve for the next decade and there has been privatisation of major mining companies in South America.

SRM has identified $30 billion worth of new mining projects that are expected to commence between now and the year 2000. India, China and the Pacific Rim offer tremendous growth prospects for mining and natural resource companies, executives said.

SRM is conservatively estimating $25 million to $30 million worth of premium in the first year. The company's executives believe the product is attractive today because of the change in ownership of mining interests over the last ten years, when the traditional owners, the oil companies, began to divest.

Unlike the petroleum industry mutual, Bermuda-based Oil Insurance Ltd., MIL is not driven by a lack of capacity, but by the need to harness the capacity and educate it to benefit the needs of the industry.

One concept was to develop the new vehicle as a mutual, but there is some doubt that mining companies would be interested in participating in that way.

SRM chairman and CEO, Geoff Saunders said different entities, including individual mines, mining companies or their captives, can have services funnelled through MIL. The aim is to build a pre-eminent source of technically-based insurance, risk financing and loss prevention engineering for the global mining industry.

Mr. Saunders, said: "Having spent 28 years involved in mining, I've long felt that there was a need for a tailored vehicle which better understood the needs of the industry.

"We envy the shipping and aviation industries with dedicated markets and underwriters and their own forms of coverage, and likewise oil and energy.

"We've felt that mining and natural resources is poorly understood by the insurance market. Indeed, after all these years, it is still written as general business. There are a lot of difficulties and litigation.'' The company has already opened representative offices in England and South Africa. They are considering offices in Melbourne, Australia and Houston or Denver in the US. Mining company risk managers will be invited to help develop the programme.

Forensic accountants, lawyers and other professionals agree that such a programme, geared toward the writing of specific mining business, should be successful.

Mr. Saunders said: "MIL will operate with a very thin infrastructure. We intend to contract out services, support and infrastructure for it. We will be looking to companies that can provide an unbundled menu of services to MIL.

"We will contract out the management of it, the reinsurance structure, the engineering and the various items of need. The risk managers of the mining firms will also have a big say in the company.'' Mr. Saunders said loss adjusters were generally perplexed by issues within the mining industry and that MIL will have to identify loss adjusters with the knowledge-base and experience to deal with this business.

He said, "We're also looking to carve out a bespoke approach to loss prevention engineering. Typically, insurance in loss prevention engineering hones in on the perils of fire and explosion.

"But from my 28 years of experience in the mining industry, less than one in five losses are fire and explosion-related. They tend to be much more heavy electrical, mechanical and natural disaster type perils.'' SRM is comprised of a trio that includes two key executives who broke away from the sprawling RTZ Mining Group, the world's largest mining concern. Mr.

Saunders and Mr. Batchelor were both members of RTZ's risk management team.

They are joined by SRM president and CEO, Phil Young, who has had equally wide ranging experience with mining and risk management.

SRM assistant vice president, Margaret Turner, previously managed RTZ's captive through Bermuda-based captive manager, International Risk Management Group (IRMG).

MIL vice president Margaret Turner