Macmahon Holdings says it has been reappointed as the mining contractor at the Dawson South project, in Queensland, Australia, three years after initially getting the gig.

The Dawson South project forms part of the Dawson Mine, an open-pit steelmaking coal mine 180 km west of Gladstone, which is owned by Anglo American.

Macmahon is the incumbent mining contractor at the Dawson South project and will continue to provide open cut mining services using the current Macmahon workforce, including load and haul, and equipment maintenance under the new contract.

The contract commences on July 1, 2024, for a period of up to three years, adding approximately A$130 million ($87 million) annually to Macmahon’s secured order book.

The capital expenditure requirements and capital intensity of this project over the new term is significantly lower following the sale of Macmahon’s Dawson South equipment fleet earlier this year, which will continue to be used on the project. Macmahon announced the sale of assets to the market on April 12, 2024, which it said at the time was expected to result in net cash inflows of approximately A$44 million to be collected during its 2024 and 2025 financial years.

Macmahon CEO and Managing Director, Michael Finnegan, said: “We are delighted to be reappointed as mining contractor for the Dawson South project where we have worked to build an excellent relationship with our client. Macmahon recently sold a substantial portion of the Dawson South equipment fleet which will continue to be used at the mine. I believe the new contract structure benefits our client, is aligned with Macmahon’s capital light strategy, and improves ROACE (return on average capital employed) performance, where we recently increased the target from 15-20%. I would like to thank the Macmahon team that has worked closely with Dawson Mine to deliver this solution.”