Mastermyne Group says it has won a short-term extension to its existing contract with South32 at the Illawarra metallurgical coal operation in New South Wales, Australia.

The execution of the new contract will see the ASX-listed contractor continue to provide outbye services at the operation, part of the Appin colliery, until June 30, 2020. This extension closely aligns Mastermyne’s outbye services with the roadway development contract also operating in parallel at the mine, it said.

The scope of the agreement provides for a range of services managing outbye processes and supplementary labour in the Appin colliery longwall area.

The contract extension, expected to generate revenue of around A$17 million ($11.6 million) over the seven-month period, also allows the company to use this time to finalise an Enterprise Agreement with its workforce, it said.

South32 completed two longwall moves in the June 2019 quarter and plans to produce 7 Mt of metallurgical coal in the year ending June 30, 2020. This is up from 6.6 Mt in the previous 12-month period. More longwall moves have been scheduled for the current quarter and the March 2020 quarter as South32 looks to support the operation’s return to a three longwall configuration from the June 2020 quarter.

Mastermyne CEO, Tony Caruso, said: “We have worked closely with South32 for some time now, and putting this extension in place means both organisations are able to plan and get set for the longer term requirements at the mine.

“The company has provided contracting services to the Illawarra metallurgical coal operations for over 15 years now and we look forward to assisting South32 with their next stage of underground growth at the Appin colliery.”