Tag Archives: contract mining

Macmahon Holdings books open pit coal and underground gold work

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Macmahon Holdings has added another A$270 million ($201 million) of work to its books with the formal award of preferred contractor status at the Foxleigh coal project and a two-year contract extension for its GBF business at Pantoto Ltd’s gold operation.

After being selected as preferred contractor in October, Macmahon’s work at the Foxleigh joint venture operation (pictured) in Queensland, Australia, will commence on March 1. The contractor will provide equipment hire and maintenance services at the open pit, truck and excavator operation in the Bowen Basin, with the contract expected to generate circa-A$250 million of revenue over a five-year term.

The work with Pantoro will see GBF take on additional work at the Wagtail and Nicolsons underground gold operations near Halls Creek in Western Australia. This contract will extend GBF’s tenure at the project to October 2023, and is worth around A$20 million, it said.

Macmahon CEO and Managing Director, Michael Finnegan, said: “The formal award of the Foxleigh project adds A$250 million to our order book and further diversifies and expands our east coast presence. We are now looking forward to building on the relationship with our new client.

“We are also delighted to continue the strong relationship that GBF has built over many years with Pantoro. The contract extension is another important step in our strategy to further expand in the underground market and we remain very well placed to continue growing our underground business.”

Macmahon contemplates underground shift to battery-electric utility vehicles

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One of Australia’s leading contract miners, Macmahon, says it is considering the use of the battery-electric Bortana EV model for its greater underground operations in the future.

The company made the admission after announcing the arrival of two Agrale Marruá AM200 light utility vehicles for its underground mining contracts (pictured). One of these – the dual cab version – is already in use and on site at BHP’s Leinster nickel operation in Western Australia.

Originally built for the Brazilian army, Macmahon has previously trialled these Tier 4 diesel engine utility vehicles, saying they are equipped to deal with what the underground mining environment throws at them.

“With the body, doors and tray all made from galvanised steel, along with a heavy-duty chassis, these corrosion-resistant vehicles are built to withstand the harsh underground environment,” it said.

Macmahon’s previous vehicles had a lifespan of 3-5 years, and it is expecting an operating life of up to six years minimum with Marrua, predicting these AM200s could last 8-10 years.

“This means, over time, we will have reduced maintenance and run cost due to the heavy-duty driveline components,” it said.

The company added: “Looking to the future, we’re also considering the electric Bortana EV model for our greater underground operations.”

The Bortana EV, which has a chassis of a diesel-powered Agrale Marruá, electric technology from 3ME and Safescape’s design and engineering expertise, has been trialled all over Australia. This includes a stint at Kirkland Lake Gold’s Fosterville mine, in Victoria; a test at Mincor’s Long nickel mine, in Western Australia; and a try-out at IGO’s Nova operation, also in Western Australia.

MACA eyes up Downer’s Open Cut Mining West division

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MACA Ltd, in response to recent media speculation, says it is currently considering the potential purchase of Downer EDI Limited’s Mining West division.

The contractor says such a move for the open-pit mining business is consistent with statements made at its Annual General Meeting in November 2020, which outlined that it continued to explore and pursue growth opportunities that will deliver “value to shareholders on an ongoing basis”. This exploration, it said, may include investments in new businesses or acquisitions where considered appropriate.

MACA added: “The process is ongoing and MACA would only pursue a binding offer to acquire the business if it were to align with its strategy and deliver value for the company’s shareholders.”

Downer has previously announced it is seeking expressions of interest in the various parts of its portfolio of mining businesses.

It has already announced the sale of Downer Blasting Services, the Snowden consulting business and its share of the RTL Mining and Earthworks joint venture, while also stating the company is in active discussions with several interested parties in relation to the rest of its mining portfolio.

Capital to take on open-pit waste mining at Centamin’s Sukari gold mine

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Capital Limited has entered a conditional open-pit waste mining services contract with Sukari Gold Mines and has also expanded and extended its existing drilling contract with Sukari.

Sukari is the operating company for the Sukari gold mine, in Egypt, one of the largest gold mines in Africa and the principal asset of Centamin.

Collectively, the contracts are anticipated to deliver incremental revenues of $235-260 million over a four-year period, commencing January 1, 2021, representing the largest award of new business in the company’s history.

The 120 Mt open-pit waste mining contract at Sukari will see Capital provide load and haul and ancillary services over a period of four years. At the same time, the existing drilling contract at Sukari has been extended to December 31, 2024 (from September 30, 2023) and expanded by nine additional blasthole rigs, bringing the rigs operating at Sukari to 24 in total.

To date, Capital has spent $23.4 million towards equipment and has made strong progress with early works, key personnel hiring and advanced operational planning, it said. It has also signed an OEM facility with Sandvik for $8.5 million and an OEM facility with Epiroc is awaiting final credit approval with documentation in near final form.

Jamie Boyton, Executive Chairman, said: “The winning of the tender for the Sukari open-pit waste mining contract is a significant milestone for Capital – it is the largest contract win for the group since inception, adds substantial scale to our mining services division, as well as providing revenue diversification from our drilling services business.

“We are also pleased to have increased the scope and scale of our existing drilling contract. Having operated at the Sukari mine since 2005, which started commercial gold production over a decade ago, Capital is pleased to be deepening further its strong client relationship with Centamin in assisting with the generation of significant value to Centamin over the medium and longer term as the Sukari mine enters its next phase of gold production.”

Martin Horgan, CEO of Centamin, said: “With the focus on improving operational flexibility at Sukari, introducing contract mining over the next few years for waste stripping in the open pit is cost and time effective. Following a rigorous tender process, Capital was determined to be the best suited to deliver what is needed.

“Capital is a trusted contractor to the company, with a strong understanding of Sukari and the operating environment, including the employment of local workforce and established training programs, consistent with Centamin’s approach to local workforce development.”

As part of this increased open-pit waste stripping program, Centamin continues to use its existing owner operator fleet, which has capacity of 80-90 Mt/y total material moved (ore and waste). The company said it conducted an independent contract mining tender process to assess incremental contract waste stripping costs, and capacity, against the cost to expand the current owner-operator mining fleet.

Centamin added: “It was concluded that the optimal integration of contract mining was to isolate the waste stripping workstream on the East wall of the open pit, thereby limiting the day-to-day interaction with the operations and simplifying operational oversight and planning from a health, safety and logistical standpoint. The East wall waste stripping program will move material to a dedicated waste dump.”

Dynamic Drill and Blast to deploy rigs at iron ore, gold mines in Western Australia

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Dynamic Drill and Blast Holdings says it has entered into a services contract with Pilbara Resources Group (PRG) and been selected as preferred supplier to Carey Mining, resulting in the delivery of work across two separate resource projects (gold and iron ore) in Western Australia.

The services contract with PRG relates to the provision of drilling and blasting services at GWR Group Ltd’s Wiluna West iron ore project, where PRG is also a contractor. It will see DDB provide services from November for Stage 1 of the C4 iron ore deposit, part of Wiluna West.

The C4 iron deposit is 1.4 km long and contains a combined DSO hematite, JORC 2004 mineral resource estimate of 21.6 Mt at 60.7% Fe, comprising 18.5 Mt at 61.2% Fe indicated and 3.1 Mt at 58% Fe inferred. DDB’s contract relates to around 1 Mt of the 21.6 Mt resource, it said.

DDB has also been selected as preferred supplier by Carey for the provision of drilling services at the AngloGold Ashanti-owned Golden Delicious deposit, part of the Sunrise Dam operation.

It is estimated DDB will provide services from late December 2020 for a period of around 24 months, with DDB and the contractor working towards execution of the final form drilling contract.

The combined revenue from both services contracts once executed is estimated to be A$9-11 million ($6.6-8.1 million) and will be based on a fixed and variable pricing structure, DDB said. It will see the recently listed ASX company use up to four drill rigs, as well as around 20 personnel and ancillary equipment to deliver the required services.

As well as the new projects, DDB has deployed equipment and personnel to additional short-term projects, it said.

DDB Managing Director, Mark Davis, said: “We are pleased to be diversifying our client base, adding two longer-term production projects, including one in the precious metals sector. These contracts complement our current operations, which include long-term mining projects and specialised civil works, which will support the sustainable growth of the business.”

Cokal drafts in PT Harmoni Panca Utama for contract mining at BBM coal project

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Cokal Limited has selected PT Harmoni Panca Utama (HPU) as the preferred tenderer to provide contract mining services for the development and mining of Cokal’s BBM coal project in Indonesia.

Aahana Mineral Resources SDN BHD (Cokal’s largest shareholder), through its experience and influence in developing and operating coal assets in Indonesia, significantly contributed to the selection process, Cokal said.

BBM is in the Central Province of Kalimantan, and is Cokal’s most advanced project. It has a mining lease area of 14,980 ha and a remit to produce premium coking coal and pulverised coal injection products for the nearby Asia steel markets.

Through its Indonesian subsidiary, PT Bumi Barito Mineral, Cokal has agreed to contract HPU for a period of five years to provide services such as open-pit overburden removal, provision of the required mining fleet and associated equipment, and coal hauling from in-pit to near-out-of-pit intermediate stockpile facilities.

HPU, one of the largest mining services companies in Indonesia, Cokal says, has agreed to mobilise upon receiving notice from Cokal to do so.

“The appointment of HPU remains subject to finalising formal contracts,” Cokal said. “However, Cokal’s commercial team have negotiated the key commercial terms, which are substantially attractive for Cokal, thus providing the opportunity to achieve favourable profit margins to be enjoyed by Cokal shareholders.”

Cokal Jakarta-based Director, Karan Bangur, said: “The team we have brought together at Cokal have extensive experience in the start-up and logistical solutions for coal mines in Indonesia. They have first-hand experience with major contractors and have ensured this award has been concluded on competitive terms with a strong contractor.

“The use of contract mining enables reduction of upfront capital requirements for commencement of mining and expedites the development of BBM. The company looks forward to working with HPU to maximise value from the production of premium export quality coking coal and PCI products.”

De Beers contracts Redpath for mining services at Venetia diamond mine

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Redpath Australia and Redpath Mining Africa have announced the award of the mining services contract at the Venetia Mine, in South Africa, from De Beers Group.

Venetia is South Africa’s largest producer of diamonds, and is situated close to the town of Alldays in the Limpopo province.

The contract comprises Redpath providing skilled management, operational and maintenance personnel to form part of the Integrated Operations Team at Venetia. The Venetia Underground project involves the transition from an open-pit mine to an underground mine. Open-pit mining at Venetia is likely to run until 2021, with the underground mine set to extend the life of the mine to 2046 and provide an estimated 94 Mct of diamonds.

Redpath Australia Managing Director, Gavin Ramage, said: “We are excited to be working with De Beers Group in transferring our safe and efficient operating processes to the South African workforce. Together with Redpath Mining South Africa, we will utilise the skillsets of both our Australian and African business units.

“Redpath have been successful in doing this at other major projects across the globe so we look forward to providing another successful outcome for De Beers at Venetia.”

Work on-site will commence in February 2021, with recruitment to commence shortly, Redpath said.

NRW Holdings to keep mining Gascoyne’s Dalgaranga gold project

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NRW Holdings says it has reached agreements with Gascoyne Resources to keep providing services at the Dalgaranga gold mine, in Western Australia, following the ASX-listed miner’s successful A$125 million ($89 million) recapitalisation process.

NRW has agreed binding terms with Gascoyne for an extension of both mining and drill & blast services for the full life of mine at Dalgaranga, which increases the overall contract value by circa-A$180 million.

In terms of the recovery of all pre-administration debts owed to NRW, it has received A$7 million in cash, as foreshadowed in Gascoyne’s recapitalisation agreement, and received 24 million Gascoyne shares (post-consolidation) valued at A$12 million at the issue price of Gascoyne’s A$85.2 million equity raising. NRW will also receive a further A$13.7 million linked to ounces produced at Dalgaranga and the gold price.

In addition to this, NRW also exercised its rights as part of the Gascoyne Entitlement Offer and now holds, in total, 36.9 million shares in the gold miner (post-consolidation).

Commenting on the work undertaken with Gascoyne and FTI as administrators, Andrew Walsh, NRW’s CFO, noted: “We have worked closely with the teams in both Gascoyne and FTI to support the recapitalisation plan recognising that a viable Dalgaranga project was critical to the success of that process. Output from the project has been consistently above 6,000 oz/mth for most of this year which has provided the basis for a great solution for both Gascoyne and NRW.

“Recent announcements on potential additional resources will provide opportunities for NRW to provide additional services beyond the current life of mine plan.”

Macmahon banks coal mining work with Foxleigh joint venture

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Macmahon Holdings confirms it has been selected as the preferred tenderer to provide equipment hire and maintenance services at the Foxleigh joint venture operation in Queensland, Australia, from March 1, 2021.

The Foxleigh mine is an open pit, truck and excavator operation in the Bowen Basin, which produces low volatile PCI coal for Asia steel mill customers.

The proposed scope of work for Macmahon involves the hire and maintenance of 21 large capacity dump trucks and other ancillary equipment over a five-year term, together with the maintenance of client-owned equipment.

Macmahon estimates this work will generate around A$250 million ($177 million) in revenue and require capital expenditure of circa-A$50 million. Most of this capital expenditure will be to acquire 220 t dump trucks, which are expected to have a useful life of 10 years, Macmahon says.

Michael Finnegan, CEO and Managing Director of Macmahon, said: “We are very pleased to be selected as the preferred equipment and maintenance provider for the Foxleigh project, and we are looking forward to delivering for a new client in Queensland. This selection highlights our expertise in sourcing and maintaining large scale mining equipment and our ability to offer a range of service models to our clients.”

Foxleigh is jointly owned by QMetco, POSCO Australia and Nippon Steel Australia.

RUC Mining, Barminco keep Panoramic’s Savannah nickel restart plan on track

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Panoramic Resources says underground development at the Savannah nickel project in Western Australia is moving ahead as planned, with both its raisebore contractor and contract miner striving towards the ASX-listed company’s first half 2021 restart goal.

In a progress update, the company said mining contractor, Barminco, had completed the 468 m horizontal underground development drive, connecting with the vertical ventilation shaft to complete Fresh Air Raise (FAR #3) development at Savannah North, in late September.

Since then, specialist raiseboring contractor, RUC Mining, has been setting up the raisebore rig on the surface and installing the reamer head at the 1675 RL, which was developed to intersect into the existing FAR #3 raise.

“This complicated and critical task was completed safely and efficiently as planned,” Panoramic said on October 19. “RUC is tasked with the FAR #3 back-reaming, which commenced over the weekend and expected to be completed in the March 2021 quarter.”

A total of 354 m will be back reamed at a diameter of 3.85 m, according to the company. This is planned to provide sufficient ventilation to support future full-scale mining operations from Savannah North in line with the Mine Plan released in late July.

Managing Director and CEO, Victor Rajasooriar, said: “We now have a firm foundation to recommence underground pre-production development next month, to complete ventilation works for Savannah North and complete areas of capital development to lay further groundwork for a potential restart of operations. This work will be concluded towards the end of the March quarter 2021 and we expect to be in a position where the project is capable of being restarted in the first half of 2021.”

The Savannah Mine Plan outlined a mine life of around 13 years, with the majority of ore sourced from the Savannah North orebody. Average annual production for years 1-12 would be 8,810 t of nickel, 4, 579 t of copper and 659 t of cobalt in concentrate, with all-in costs for these years of $5.27/lb of payable nickel, net of copper and cobalt by-product credits.