Tag Archives: contract mining

Perenti’s AUMS wins two-year extension at AngloGold’s Geita operation

Perenti Global’s African Underground Mining Services (AUMS) has secured a new two-year contract to continue operations at AngloGold Ashanti’s Geita Mine in Tanzania.

The two-year agreement will take effect immediately and comes with a value of $186 million (100% share).

As part of the new contract, Perenti will transfer 20% of equity in AUMS Tanzania to a newly created mining support services company called BG Umoja Services Limited. BG Umoja is an 80:20 joint venture between Perenti group entities and local drilling services and mining supply company, Geofields Tanzania Limited, which will supply mining support services to the Geita mine.

The establishment of the BG Umoja JV demonstrates Perenti’s ongoing commitment to support and build local capability, generating enduring social and economic value for the regions in which the company operates, Perenti said.

The Geita Complex is located within the Lake Victoria Goldfields of the Mwanza Region, about 120 km from Mwanza and 4 km west of the town of Geita. The Geita Mine was originally an open-pit operation, however, transitioned to an underground operation in 2016. Since this transition, AUMS has worked collaboratively with AngloGold Ashanti to provide a full suite of integrated underground mining services for the mine.

AUMS Tanzania, supported by Geofields, will continue to provide AngloGold Ashanti with underground mining services while facilitating the development of improved underground mining technical capability within the broader Tanzanian workforce.

Mark Norwell, Managing Director and CEO of Perenti, said: “We are very pleased to be continuing our strong, long-term working relationship with AngloGold Ashanti at their flagship Geita Mine.

“Furthermore, this contract extension includes the addition of Geita Hill, a new underground development within the Geita Complex, which will see a steady increase in our scope of works and revenue run rate as the development ramps up from a single heading decline into multiple work areas and then into production later in 2021. This contract extension is expected to generate an improved earnings contribution for Perenti over the contract term.”

Perenti’s Mining Chief Executive Officer, Paul Muller, said Perenti first started operating in Tanzania in the late 1990s and the award of the contract extension at the Geita mine provided it with an opportunity to continue to partner with, and support numerous local businesses, suppliers and contractors.

“We look forward to expanding on these relationships as we seek to create enduring value and certainty for all of our stakeholders,” he said.

Felix equips Macmahon with tools to manage supply chain risk

Felix Group Holdings Ltd has been awarded a three-year enterprise software contract with Macmahon Holdings for its Vendor Management and Sourcing solutions that, it says, is intended to be rolled out across the contract miner’s global operations.

Felix’s enterprise solution enables organisations to create efficiencies and manage supply chain risk by transforming and digitising the way they manage and engage with their third-party suppliers and subcontractors, it says.

The resources sector Macmahon operates in is an important part of Felix’s strategy as it continues to expand its platform into sectors beyond engineering and construction.

The contract is effective from July 1, 2021 and will run for 36 months, Felix says.

Felix CEO, Mike Davis, said: “We are very pleased to have won this contract with Macmahon, a market-leading mining services contractor. While not financially material, this represents an important milestone for Felix as we continue to expand our platform into new sectors.

“Macmahon undertook a comprehensive process to select a suitable solution to digitise their source-to-contract processes and create efficiencies across their operations. We look forward to partnering together and delivering sustainable value to Macmahon.”

CSI to carry out load and haul, drill and blast work at Rio’s Brockman 2 iron ore mine

Mineral Resources Ltd’s CSI Mining Services has been awarded a mining contract by Rio Tinto to carry out work at the Brockman 2 iron ore mine in the Pilbara of Western Australia.

The scope of the contract will see CSI conduct load and haul, drill and blast, and short-term mine planning activities for Rio, the company said.

This will involve scheduling, drilling and blasting and then excavating 27 Mt of waste rock and iron ore over an approximate nine-month period, with a fleet of large-scale mining equipment, developing the Lens A/B pit for Rio.

This contract builds on a 16-year relationship with Rio, dating back to when CSI first commenced crushing services at the Nammuldi mine site. It also follows the completion of a 30 Mt load and haul contract at Rio’s Tom Price mine. CSI remains engaged at another Rio Tinto operation, Paraburdoo, where its team is carrying out 13 Mt of load and haul operations.

The Brockman 2 contract will generate around 150 jobs for CSI’s highly skilled workforce, the company said.

Mineral Resources’ Chief Executive Mining Services, Mike Grey, said: “We are delighted to have been invited by Rio Tinto to assist at another of its world-class iron ore mines. Our relationship with Rio Tinto dates back 16 years. Since then, we have been able to establish a track record of consistent project delivery for Rio Tinto, which we are very proud of.

“CSI is the world’s largest crushing contractor, so it is immensely satisfying that this latest Rio Tinto contract includes other mining activities, such as load and haul and drill and blast, to demonstrate CSI’s diverse skills set. We are confident this Brockman 2 scope of work will become the latest chapter of our ongoing association with Rio Tinto.”

Brockman 2 is one of the 16 mines that make up Rio’s world-class Pilbara iron ore operations.

The CSI team has begun mobilising to site, including delivering a new fleet of Komatsu 830E electric-drive dump trucks and a new Komatsu PC4000-11 excavator.

Panoramic, Primero and Barminco get to work on restarting Savannah nickel operation

Panoramic Resources Ltd, after a 12-month review process, has approved the restart of the Savannah Nickel Operation, in the Kimberley region of Western Australia.

The decision hinges on a 12-year mine life with an average annual production target of 9,072 t of nickel, 4,683 t of copper and 676 t cobalt in concentrate; as well as an offtake agreement with Trafigura that will also see the trading company provide a loan facility of up to A$45 million to cover the A$41 million of upfront capital cost required to restart the mine.

Savannah is set to operate at average site all-in costs of A$6.36/lb of payable nickel, net of copper and cobalt by-product credits and royalty payments. This equates to roughly $4.86/Ib or $10,714/t.

Savannah, with more than A$100 million already invested, has been maintained since the suspension of operations in April 2020 with a view towards operational readiness and project optimisation. This includes the recent completion of the FAR#3 ventilation raise, underground capital development on four mining levels at Savannah North and ancillary capital works on surface and underground infrastructure, which are currently being completed, Panoramic said.

The restart decision has led to divisions of Perenti and NRW Holdings being awarded significant contracts related to the resumption of mining activities.

Barminco, a subsidiary of the Perenti Group, has been awarded a four-year underground mining contract under a binding letter of intent and is scheduled to mobilise to site in July 2021. The contract will be serviced by new underground mining equipment including the use of tele-remote mining equipment, expected to deliver both safety and productivity benefits, Panoramic said.

The contractor was formally awarded the A$200 million contract back in February.

“Based on Barminco’s previous working knowledge at Savannah, opportunities to increase ore production and reduce dilution have also been identified,” the company added, explaining that underground mining is planned to commence in August, with ore to initially be sourced from both the Savannah and the Savannah North deposits.

Following an evaluation of an owner-operator model for the processing plant and a competitive contract tender process, Panoramic has also signed a non-binding letter of intent worth A$35 million with Primero (owned by NRW Holdings), which envisages a three-year agreement. The agreement relates to all processing and maintenance work at the Savannah processing plant, which has been maintained in “excellent condition” during the suspension, Panoramic said.

“A number of opportunities for improved recoveries through enhanced operating practices and minor capital projects have been identified,” the company added. As a result, the non-binding letter of intent with Primero has been structured to incentivise achieving higher than budget recoveries.

Panoramic is working with Primero to complete a binding contract in the coming months, but ore processing is set to restart in November 2021, allowing ore stockpiles to build for around three months (100,000 t) to de-risk ore supply issues.

The process plant at Savannah was commissioned in August 2004 and comprises a single stage crusher, SAG mill, flotation, thickening and filtering stages to produce a bulk nickel, copper, cobalt concentrate. Over the 2004 to 2016 initial operating period, metallurgical recoveries averaged 86-89% for nickel, 94-97% for copper and 89-92% for cobalt. The plant was originally designed for a throughput of 750,000 t/y, but consistently outperformed the design specifications with rates exceeding 1 Mt on an annualised basis, Panoramic said.

First concentrate shipment from the Wyndham Port is targeted for December 2021.

Macmahon to start mining Anglo’s Dawson South met coal mine

Macmahon Holdings says it has been selected to provide surface mining services at Anglo American’s majority-owned Dawson metallurgical coal mine in Queensland, Australia, starting from July.

The work at the Dawson South operations, which forms part of the Dawson Mine, an open-pit met coal mine owned in a joint venture between Anglo American and Japan’s Mitsui Group, will generate around A$200 million ($153 million) in revenue over the three-year term, Macmahon said.

Signing of the mining services agreement is expected to occur in the near future, the company added.

Macmahon’s CEO and Managing Director, Michael Finnegan, said: “We are very pleased to be selected for the Dawson South operation by Anglo American, a leading global mining company. We look forward to working very closely with our new client to ensure a smooth transition period and continuity of safe operations. This new project further strengthens our growing east coast presence.”

Byrnecut partners with AusIMM to support, mentor and up-skill workforce

AusIMM says it has officially launched a three-year major partnership with renowned underground mining contractor Byrnecut.

Introduced as part of AusIMM’s Underground Operators Conference in Perth, Western Australia, which hosts an audience of 1,200 mining representatives and professionals, the partnership will focus on supporting, mentoring and up-skilling Byrnecut professionals, as well as engaging in prominent diversity and inclusion initiatives for the industry, AusIMM said.

Byrnecut Mining, established in 1987, has developed a reputation for professionalism and reliability, growing to employ thousands of people and operate a multimillion-dollar fleet of specialised underground mining equipment, it said.

AusIMM CEO, Stephen Durkin (left), welcomed the opportunity to combine efforts with Byrnecut to better support mining professionals as their careers grow.

“In taking a consolidated approach through our partnership with Byrnecut, we are excited to rollout a well-planned and strategic series of initiatives to provide greater advantage, impact and value for professionals at Byrnecut and the wider industry,” Durkin said.

Byrnecut Group Executive Chairman, Steve Coughlan (right), said that the organisation was looking forward to using their extensive experience and knowledge of the sector to work with AusIMM in supporting, mentoring and up-skilling their workforce.

“We’re pleased to be partnering with Australia’s peak body for the resources sector,” Coughlan said. “Building long lasting relationships with our employees and our partners is a key part of our culture and Byrnecut are looking forward to working with AusIMM over the next three years.”

Fe Ltd and Big Yellow make plans to mine JWD iron ore project

Fe Limited says it has executed a letter of intent (LOI) with Big Yellow that could see the emerging company become the mining contractor for the JWD iron ore project in the Pilbara of Western Australia.

A full form contract is targeted to be completed within the next 30 days, subject to receipt of necessary environmental approvals and logistic contracts. This LOI, the company says, will enable Big Yellow to allocate the necessary mining fleet and people to the FEL project.

Big Yellow is a new contractor founded by mining executives Brad Gordon (former CEO of Acacia and Intrepid), David Edwards and Mitch Wallace (both ex MACA).

“FEL believes that Big Yellow’s combination of experienced personnel looking to replicate their past success in a new entity is a good fit with FEL’s own aspirations to do the same and looks forward to continuing to work together,” it said.

Following the LOI being executed by both parties, discussions have commenced on works that can be commenced in advance of final environmental approvals being received.

The approvals received to date allow certain clearing and preparatory works to occur at JWD, along with refurbishment of the existing office facilities on site. These early works will allow a faster ramp-up of operations once the remaining approvals and key contracts are secured, FEL claims.

FEL says it has revisited the JWD geological model and mine plan, with opportunities identified for a reduction in the strip ratio and an improved average iron ore head grade. If successfully implemented, this would have a positive impact on its margins through reduced mining costs and improved pricing as a result of higher-grade products than initially expected, it said.

FEL Executive Chairman, Tony Sage, said: “With mining at Wiluna close to commencing, we are pleased to have advised Big Yellow of our intention to appoint them as our mining contractor. We are well advanced with the final approvals and other key contracts and would anticipate being able to update shareholders on these shortly.”

In September, FEL acquired a 51% interest (including operatorship) in the Gold Valley Iron Ore Mining Rights Agreement over the Wiluna West JWD deposit. The JWD project is part of the wider Wiluna West project, owned by GWR Group. It came with a 10.7 Mt resource grading 63.7% Fe using a 55% Fe cutoff.

FEL classes the project as a low capex, direct shipping ore development, which will produce a high-grade (resource average circa-63.7% Fe), low impurity iron ore. A January 2021 presentation claimed the mining and transport of the first 300,000 t of iron ore is required by September under the iron rights agreement.

Byrnecut and Wiluna Mining strengthen ties with five-year alliance

Wiluna Mining says it has formally agreed to enter a five-year alliance with contractor Byrnecut Australia Limited for the performance of underground development and production mining services at the Wiluna Mining Complex in Western Australia.

Wiluna Mining has commenced a three-year, staged development plan that will see it capable of treating all ore types at Wiluna through four processes including an existing 2.1 Mt/y carbon-in-leach process plant; a 750,000 t/y flotation and concentrator, commencing construction this month with commissioning due in October, scaling up to 1.5 Mt/y capacity by the 2024 financial year; gravity circuit; and tailings retreatment plant.

On conclusion of the staged development plan, which is being developed to match the rate of the underground mining development, Wiluna Mining says it will be capable of processing all its ore at the Wiluna Mining Operations and will be producing some 250,000 oz/y. Most of the gold at this stage will be produced as a concentrate, however gold doré produced on site in parallel to concentrate sales will be continued to improve and optimise operating margins.

Wiluna said back in October that Murray Engineering had been contracted to supply and maintain mine fleet for current production, associated development and stoping at the operation, while Byrnecut would provide equipment and personnel for existing development rehabilitation and new development for resource-reserve drill out programs and production from new mine areas.

Byrnecut, following the most recent agreement, will be responsible for development and eventually the mining of the underground mine at the Wiluna Mining Centre, Wiluna Mining said.

The Byrnecut pact will also allow Wiluna Mining to amortise significant agreed mine capital and establishment costs over the five-year alliance period and provides the framework and certainty to a long-term seamless integrated approach to both mine planning and mining services execution to ensure the best outcomes and risk mitigation, it said.

Milan Jerkovic, Wiluna Mining’s Executive Chair, said: “We are pleased to enter into the five-year alliance with a world-class mining contractor in Byrnecut. We see great synergies and efficiencies as well as cost and capital benefits through the alliance. It provides, with a great degree of confidence, that the underground development and ongoing mining will be executed with the highest standard of efficiency, safety, timeliness, and profitability.

“We look forward to working with Byrnecut to transitioning the Wiluna Mine, once again, into one of Australia’s biggest and most profitable gold mines.”

This agreement is conditional on the completion of the final contract documentation, which is underway, and respective board approvals.

MACA extends contract mining relationship with Ramelius Resources

MACA says it has been awarded an open-pit mining contract from Ramelius Resources for load and haul, and drill and blast services at the Tampia gold project in Western Australia.

Tampia is near Narembeen, 250 km east of Perth, and 148 km by sealed roads from Ramelius’ Edna May gold mine where MACA currently provides contract mining services.

The contract is expected to generate A$95 million ($74 million) in revenue for MACA over a 28-month term, commencing in the June quarter, and will employ around 115 people. MACA says its work in hand position as of February 21 now stands at A$3.4 billion.

MACA’s CEO, Mike Sutton, said: “MACA is very pleased to be awarded this contract at the Tampia gold project, and values the long-standing relationship that we have established with Ramelius since commencing works on the Mt Magnet gold project in 2017, and then the Edna May gold project in 2020.”

The Tampia gold project, which Ramelius consolidated 100% ownership of earlier this year, was the subject of a feasibility study in April 2020. This study focused on the option to haul ore to Ramelius’ Edna May processing facility for production of 186,000 oz of gold from the processing of 2.5 Mt of ore.

Perenti plants roots in USA on North America contract mining potential

Perenti Group has targeted the North America market for further contract mining growth, establishing a US office in the first half of its 2021 financial year.

The office, thought to be in Denver, Colorado, will help the company make the most of the substantial pipeline it has identified in North America.

The news came during the company’s first half results to the end of December 2020, which showed off revenue of A$1.01 billion ($799 million) and EBITDA of A$201 million.

Noting strong growth in its underground business and a contraction in its Africa surface business (most of which is tied to its AMS subsidiary), the company said it had won A$1.1 billion of new work and extensions since July 1, 2020, while its orderbook was around A$5.5 billion and its pipeline was circa-A$9.2 billion.

Within this global pipeline, A$2.1 billion was in the North America region, Perenti said. This was made up of 14 projects, three of which were at the tendering stage. Overall, 14% of the pipeline was from the US and 9% was in Canada.

The company, through its Barminco subsidiary, won its first “significant” North America contract last year when it signed on to an underground contract mining agreement at Barrick Gold’s Hemlo mine in Ontario, Canada (pictured).

In other news, the company said increased demand for its MinAnalytical mineral sample processing had been registered in the six months to the end of December, with record PhotonAssay processing recorded in December 2020.

The company also said it was “progressing alternative service offerings” during 2021.