Tag Archives: contract mining

Barminco to take on Odysseus nickel mining gig for Western Areas

Base metals, Mineral project development, Mining services, , , , , , , , ,

Perenti’s hard-rock underground miner Barminco has been awarded a development and production contract at Western Areas’ Odysseus mine, in Western Australia.

The contract at Odysseus, part of the Cosmos nickel operation, is valued at around A$200 million ($146 million) over five years and follows on from the earlier rehabilitation works completed by Barminco at the mine.

Western Areas acquired Cosmos in October 2015 and commenced the redevelopment of Odysseus in January 2019. Once in production, Odysseus is expected to produce 14,000-15,000 t/y of nickel concentrate, becoming Western Areas third nickel mine in Western Australia.

Western Areas Managing Director, Dan Lougher, said today (September 8) that excellent progress had been made on the underground and surface infrastructure works at Odysseus, with minimal COVID-19 impacts.

“We have reached a critical milestone with the firing of the full-face development of the Odysseus decline, which is now heading across to the orebody,” he said. “A significant amount of preparation and support work has been delivered across the site to reach this milestone.

“We now have our eye on the delivery of the first ore tonnes mined from underground in the first quarter of financial year 2022.”

Barminco’s Chief Executive Officer, Paul Muller, said the company was excited to continue its relationship with the Western Areas team, which began in 2005 at the Forrestania mine and has now grown to include the Cosmos nickel operation.

“Odysseus is a significant project to bring on-stream, and the five-year term demonstrates the trust and confidence Western Areas has in Barminco to continuously improve and deliver for them,” he said.

Longhau pact sets up hard-rock mining at Xtract’s Manica operation

Mineral project development, Mining project news, Mining services, Precious metals, , , , , , , , , ,

Xtract Resources’ wholly-owned Mozambique subsidiary, Explorator Limitada, has concluded a mining contractor agreement with Longhau Tianci Mining Co Ltd for the exploitation of the Guy Fawkes hard-rock gold deposit at its Manica mining concession in Mozambique.

The pact will see Longhau mine the Guy Fawkes deposit for six years or until the orebody is depleted or no longer viable, Xtract says.

Guy Fawkes was mined historically since 1893 and was one of the largest of a series of hard-rock gold mines in the district, with total production of almost 16,000 oz Au reported, Xtract said. A previously reported SAMREC-compliant indicated and inferred resource at Guy Fawkes came out at 1.13 Mt at 1.91 g/t Au with potential for additional upside in several dimensions.

Subject to a number of pre-conditions including the contract miner obtaining a gold trading licence and Explorator securing a mining licence and environmental licence, the agreement includes performance targets whereby Longhau will be required to commission a plant with a minimum throughput of 60 t/d within two months from the date of signing. The throughput tonnage will be increased to 120 t/d within three months of commencing operations, Xtract said.

Explorator will be responsible for recording the gold concentrate produced from the permitted area on a daily basis, while the contract miner will be responsible for the smelting of the gold concentrate and delivery of gold doré bars.

Longhau, as the contract miner, will retain 74% in gold for services provided, and Explorator will retain 26% of all gold production, amounting to 20% after payment by Explorator of the applicable Mining Production Tax of 6%.

After deduction of applicable expenses and costs and tax incurred by Explorator, Xtract has agreed with Mutapa Mining and Processing LDA (MMP), Explorator’s existing hard-rock collaboration partner, to split the net cash flow 65% in Explorator’s favour (with 35% due to MMP).

Xtract Resources, back in 2019, signed up to a collaboration agreement with MMP that could see the building of a carbon in leach plant and the subsequent processing of hard-rock ore from Manica.

Longhau is to commence adit mining and initial underground development during the processing build phase, Xtract said.

Colin Bird, Xtract Executive Chairman, said: “We are pleased to report the signing of this agreement, which should provide the opportunity for incremental cash flow during MMP’s Fair Bride construction and building phase.

“The Guy Fawkes deposit shows considerable variation both in mining width and grade, demonstrating propensity for selective higher-grade mining. Longhau intends to work a portion of the deposit by open-cast methods where drilling indicates that suitable grades locally can run close to surface. Underground mining will be selective.

“We are currently in discussions in respect of the Boa Esperanza deposit and look forward to updating shareholders shortly.”

Macmahon and Redsands looking at rehab, contract mining opportunities in WA

Environmental, Mining industry recognition, Mining services, Sustainable mining, , , , , ,

Macmahon has signed an agreement with Redsands Rehabilitation to jointly pursue rehabilitation and contract mining opportunities in the northern Goldfields region of Western Australia.

Redsands is an Indigenous-owned business focused on the rehabilitation and revegetation of land disturbed by mining. The company was founded by Dennis Sceghi, who has worked in the mining industry as an equipment operator and contractor for over 30 years and is also an elder of the Kultju native title group.

Macmahon CEO and Managing Director, Michael Finnegan, noted that by working together, Macmahon and Red Sands will have an enhanced ability to identify work, offer economic opportunities to Indigenous people and improve the sustainability of the mining industry.

“Redsands is a regional business with very specialised environmental expertise, drawing on the skills of traditional owners,” he said. “With this agreement we will be able to target new opportunities which may not have been available to us individually. We also hope to be able to create additional Indigenous employment and expand our rehabilitation services in Western Australia.”

MACA wins three-year contract extension at Ramelius’ Mt Magnet gold mine

Mine operation news, Mining equipment, Mining services, Precious metals, , , , , , , ,

Contract miner MACA has been given an extension to its contract at Ramelius Resources’ Mt Magnet gold mine, with the ASX-listed company set to continue providing mining services at the Western Australia operation for another three years.

The project extension will consist of open-pit mining services including drilling and blasting, and loading and hauling, MACA said.

It is expected the project extension will generate approximately A$130 million ($93 million) in revenue for MACA over the three-year term.

MACA says its total work in hand position now stands at a healthy A$2.3 billion.

Mike Sutton, MACA CEO and Managing Director, said: “We are pleased to continue our relationship with Ramelius Resources at Mt Magnet for a further three years. The services we provide at Mt Magnet and Edna May for Ramelius make up an important part of MACA’s work in hand in the gold sector.”

Theta Gold Mines gears up for trial mining at starter project with Digmin appointment

Mineral project development, Mining services, Precious metals, , , , , ,

Theta Gold Mines has selected Digmin Group as the mining contractor for trial mining activities at the Starter Theta project, in South Africa.

The appointment, which came after a competitive tendering process, will see Africa-focused Digmin mine two box cuts in the future Iota and Browns Hill pits during which final mining equipment and grade control practices will be selected.

Following the trial mining phase, it is anticipated Digmin will also do some of the bulk earthworks and civils as part of the project infrastructure establishment.

These operations are expected to commence once final permitting has been achieved (environmental authorisation for open-pit mining on Theta’s existing underground mining right). This authorisation is expected to be received in the December quarter, Theta said.

Theta Chairman, Bill Guy, stated: “The company has delivered another key milestone in the development of the Theta project with Digmin selected as our preferred mining contractor. They have intimate knowledge of the Theta open-pit project having spent many months with our mining team in order to deliver a well costed schedule of works, which presently remain in line with our May 2019 feasibility study costs.

“Having a reputable, experienced mining contractor on board adds significant credibility and will assist in financing the project development as it provides potential project financiers, of which there are several still under consideration, comfort in terms of execution and cost management.”

Guy said the Digmin team has in-depth knowledge of the Pilgrim’s Rest area with their founder living only 40 km from the Theta project.

“Digmin’s broad range of capabilities, including mining, rehabilitation, civil and road works, and open pit and underground drilling, give Theta’s project development team the flexibility to now focus on the successful build and operation of the Theta open-pit project,” he added.

On April 20, 2020, the company, which owns 74% of the project through Transvaal Gold Mining Estates Ltd, announced a final optimised feasibility study on the project, focused on Mining Right 83 (MR83), which, compared with the May 2019 original feasibility study, had a new mining schedule with a reduced environmental footprint, reflecting an increase in the production rate from 500,000 t/y to 600,000 t/y, including the mining of several old mine waste rock dumps.

Post permitting of MR83 and trial mining, the final mining contract is expected to be negotiated with Digmin. Synergies between different engineering procurement and construction contractors will also be explored, which potentially could reduce the overall and already low capital cost of the project, the company said.

Theta said it has also made good progress with the first stage 600,000 t/y gold plant construction tender process, based on a lump sum turnkey contract, with an announcement expected to be made in the September quarter.

Rio2 and STRACON establish mining and construction alliance for Fenix gold project

Mineral project development, Mining services, Precious metals, , , , , , , , , , , ,

Rio2 Ltd says it has taken another key step towards the development of its Fenix gold project, in Chile, by selecting STRACON SA as the lead mining services contractor for the project.

Both companies have executed an early contractor involvement (ECI) agreement for early works associated with contract mining services. Under the ECI agreement, the parties will work exclusively over the coming months to further optimise the mining and civil construction aspects of the project and conclude contract documentation.

The scope of the mining services contract will include mining of ore at the rate of 7.3 Mt/y (20,000 t/d), waste mining, drilling, blasting, hauling, supply of operating personnel and mining equipment, supervision and management, dust suppression and road maintenance. The scope also includes water transportation from Copiapó to the mine site and maintenance of the entire mobile fleet of equipment plus all pre-mining and civil construction activities including the construction of platforms, leach pad, ponds, access roads and waste material deposits.

The financial terms of the mining contract will use an alliancing-style commercial framework based on the mine plan, methodologies and productivity estimate assumptions contained in the prefeasibility study, which outlined a heap leach gold mine producing an average of 93,000 oz/y during the first 13 years and 50,000 oz/y during the final three years of production as stockpiled ore is being crushed and leached.

The environmental baseline study for the Environmental Impact Assessment (EIA) of the Fenix gold project has been progressing since November 2018. During 2019, engineering works and studies were completed for inclusion in the EIA. In January 2020, the information gathering stage for the baseline study was finalised, with the EIA completed and filed with the Environmental Impact Assessment System in the March quarter. Environmental approval is expected in the June quarter of 2021.

The preparation of sectorial permit applications is currently in process and will be submitted in conjunction with the filing of the EIA. The approval of sectorial permits is expected in the September quarter of 2021 and the start of earthworks for construction of the project is targeted for the December quarter of 2021.

The basis for Rio2 establishing a mining and construction alliance with STRACON at the Fenix gold project is a best for project business strategy, the company said. Together with STRACON, the Rio2 management team collaborated, implemented and executed with this same approach when they built and operated the La Arena and Shahuindo gold mines in Peru with Rio Alto Mining.

At Fenix, Rio2 and STRACON will work together as an integrated team, dedicated to exceeding goals, controlling budgets and adding value through exceptional performance while working in a safe and environmentally sustainable manner focused on every detail of the mining and construction process, Rio2 said.

“The alliance will implement an inclusive social policy as a priority based on the hiring of local personnel and service companies from Copiapó and the Atacama Region,” it added.

The payment model of an alliance includes reimbursement of 100% of contractor project costs plus a fee (corporate overheads and profit); a key performance indicator-based regime that rewards for outstanding performance and punishes poor performance; and unanimous, best for project, management and decision making and the selection of an integrated owner/contractor team on the basis of best person for each position and avoiding duplication of roles, Rio 2 said.

Alex Black, President and CEO of Rio2, said: “The signing of this ECI agreement with STRACON, a leading mining and civil construction contractor in Latin America, forms a key part of Rio2’s strategy to prepare for next year’s construction phase of our Fenix gold project.

“The Rio2 management team is pleased to work again with STRACON, this time in Chile, and look forward to further optimising the mining and construction solution for the project and finalising contract documentation in readiness for next year’s work program.”

Steve Dixon, Chief Executive Officer of STRACON, said: “The project will be delivered under a collaborative alliance agreement, a framework which has been successfully utilised over the past 10 years at several of STRACON’s projects throughout Latin America.”

MACA to become contract miner at Atlas Iron’s Corunna Downs mine

Mineral project development, Mining services, Steel and iron ore, , , , , , , ,

MACA is to carry out open-pit mining at the Corunna Downs iron ore project in the Pilbara of Western Australia following a contract award from owner Atlas Iron.

The contract follows an agreement between the two to upgrade an existing public road and develop an access road at Corunna Downs, announced earlier this year.

The project, some 33 km south of Marble Bar in the Pilbara, will see Atlas develop five open pits using conventional drill and blast, and load and haul methods. Some 23.3 Mt of iron ore will be mined above the water table over an approximate timeframe of six years, according to a filing with the Environmental Protection Authority.

MACA will carry out the drilling and blasting, and loading and hauling as part of the new pact, which is expected to generate around A$230 million ($159 million) in revenue for MACA over the 62-month term.

MACA says it has a long-standing working relationship with Atlas having previously provided services at the Pardoo, Mt Dove, Abydos and Wodgina iron ore operations. It is also currently providing crushing services for Atlas at its Mount Webber iron ore mine on top of the civil works at Corunna Downs.

The contractor’s total work in hand position now stands at A$2.2 billion, it said.

MACA CEO, Mike Sutton, said: “We are pleased to have been selected as the contract miner for Atlas building on our workload in the iron ore sector with an existing client. We look forward to being part of the successful development of this project.”

Macmahon extends stay at expanding Byerwen coking coal mine

Coal technology, Mine operation news, Mining services, Steel and iron ore, , , , , , , , ,

Macmahon Holdings is to help increase production at the Byerwen mine in Queensland’s Bowen Basin after securing an expansion and three-year extension of its work at the coking coal operation.

Macmahon has been providing open-pit mining services at Byerwen since the establishment of the mine in November 2017 and employs more than 430 people on site. The mine is owned by Byerwen Coal Pty Ltd, a joint venture between QCoal Group and Japanese steel manufacturer, JFE Steel.

The new contract significantly expands production to 10 Mt/y of hard coking coal, and applies from June 1, 2020, until November 1, 2023. The expected revenue over the contract period will be A$700 million ($483 million), with full capacity expected from July 2020, Macmahon said.

There is also an option to extend the contract for a further two years after this period. If this option is exercised, revenue from the contract could exceed A$1 billion, according to the company.

The expansion will involve capital expenditure by Macmahon of A$16 million on ancillary equipment. The contractor has also procured two additional 800 t hydraulic excavators for the project worth A$37 million, it said.

Macmahon CEO and MD, Michael Finnegan, said: “We are very pleased to have secured this expansion and extension at Byerwen, which is one of our cornerstone projects in Australia. Byerwen Coal is an excellent partner and the project has been very successful since its inception. We look forward to continuing to work with our client on the development of this premium asset.”

QCoal Group Managing Director, Christopher Wallin, said the production increase at Byerwen was testament to the favourable economics of the project and the work of the QCoal staff and contract partners involved in developing the mine over several years.

“The development of the Byerwen project is a great success story for the industry, with the mine now emerging as a very low-cost producer of hard coking coal,” he said. “I am very proud that this expansion will enable us to further contribute to the Queensland economy with additional local employment and opportunities for regional communities.”

SPH Kundalila adopts COVID-19-safe practices to keep contract mining services going

Mining safety, Mining services, , , , , ,

Management commitment to health and safety standards, combined with good planning and ongoing auditing, has allowed South Africa-based open-pit mining contractor SPH Kundalila to sustain operations, wherever permitted, the company says.

“The cost and the disruption have been significant, but we acted early to put resources and systems in place,” Graeme Campbell, Group Commercial and Operations Manager at SPH Kundalila, said. “It has been particularly important to constantly review our performance. Learning from the experience of our different sites has also helped keep safety standards high.”

Most of the company’s work sites in South Africa were required to close at the start of the lockdown, requiring shutdown procedures at each site. This included planning for the movement of staff and equipment, while updating access control measures.

It also meant collaborating closely with mines to ensure clients’ requirements were also observed. Limited operations continued at SPH Kundalila’s own dolomite and lime mine, designated as an essential service due to its product’s importance to farming.

According to SPH Kundalila Safety Manager, Quintin van der Merwe, an important aspect of the response has been the drafting of a revised safety, health, environment, and quality (SHEQ) policy.

“Our COVID-19 policy is the highest level of commitment from senior management to address the risks that were emerging from the lockdown,” van der Merwe said. “This covers a range of issues from financial provision and the supply of protective equipment, to respect and care for employees.”

Based on a COVID-19 management plan, SPH Kundalila is continually assessing the risks facing employees and operations. Attention is also placed on education and awareness-raising, as well as continuous improvement while observing COVID-19 regulations as they evolve.

“Being quick off the mark was key to our response – which included securing 1,000 litres of hand sanitiser and 1,000 cloth masks even before the lockdown,” he says. “The focus then moved to risk assessment and mitigation, such as the risk of infection from employees’ movements and sharing of equipment and office space.”

Results have been positive, Campbell said. With about 1,000 employees spread over 10 branches and half a dozen mining sites countrywide, the company was already 90% operational by the end of May. The high standards followed by SPH Kundalila align with those of the Raubex Group, as well as the Aggregate and Sand Producers Association.

“This has ensured that our internal audits – and those by our clients and the Department of Mineral Resources and Energy – have made no adverse findings during the lockdown to date,” he said. “As a caring company, we have seen employees responding well to the changing demands. This translates into sustaining a high level of service across our operations.”

Pit N Portal to help revive Mincor’s Kambalda nickel operation

Base metals, Equipment maintenance, Mineral project development, Mining equipment, Mining services, , , , , , , , , , , , ,

Mincor Resources has awarded underground mining services and equipment hire group Pit N Portal with the underground mining contract for its 100%-owned Kambalda nickel operations in Western Australia.

The contract encompasses a five-year pact for the new Cassini nickel mine, where early surface works were recently completed, and a three-year contract (plus one two-year option) at the Northern Operations (the brownfields Durkin North and Long nickel mines – both of which are on care and maintenance having previously operated). These two assets (Cassini and Northern Operations) make up the planned nickel operation.

Pit N Portal was awarded the contract following the completion of a competitive tender process and a due diligence process led by Mincor’s Chief Operating Officer, Dean Will, examining safety, Kambalda underground experience and performance, capabilities, equipment availability and cost, the company said.

All key components of the contract are in line with the parameters set out in the Nickel Restart Definitive Feasibility Study (DFS) completed in March 2020. This was based on an initial five-year operation from two production centres with all ore processed at BHP Nickel West’s Kambalda nickel concentrator and the resulting nickel concentrate sold to BHP. The DFS envisaged 63,000 t of recovered nickel-in-concentrate output for an estimated pre-production capital expenditure of A$68 million ($41 million at the time).

Mincor has executed a binding contract with Pit N Portal subject to a Notice to Proceed being issued by Mincor before March 31, 2021.

The development company says it is targeting the commencement of mining operations at Kambalda in the second half of 2020, subject to board approval and a final investment decision on its Nickel restart plan. It said previously first nickel-in-concentrate production could be achieved in the second half of 2021, subject to COVID-19-related restrictions.

Established in Kalgoorlie in 2002, Pit N Portal has expanded its capacity and capability to encompass total, whole-of-mine solutions across Australia, and has significant underground mining contracts in Western Australia and Queensland. It was acquired by Emeco Holdings earlier this year.

Mincor’s Managing Director, David Southam, said the award of the contract to a Kalgoorlie-based business was consistent with the company’s commitment to maximise local content, to support local businesses and communities, and to create opportunities for a residential workforce wherever possible.

“We selected Pit N Portal based on a wide range of criteria including safety, performance, contract cost, experience and capability, ability to meet our mobilisation timelines and the size and quality of their contract fleet.

“Their equipment fleet suits our proposed style of mining and, as one of Australia’s largest hard-rock underground mining equipment solutions providers, we will have access to a large range of equipment options and high-class maintenance and rebuild capacity – giving us significant operational and strategic flexibility, which is important when operating a number of underground mines.

“This includes having access to the Emeco operating system, which could add significant value to future operations, as well as having a contracting partner that is willing to embrace the very latest in mining technology and data management and usage, including the proposed use of underground electric vehicles, which we have already trialled.”

Mincor has also completed – on time and budget – all works associated with the Early Works Contract at Cassini project. This work, carried out by Hampton Mining and Civil Services, included clearing of the Cassini site area, excavation of the box-cut (pictured), construction of the site office pad, magazine and waste areas and construction of the surface settling dams and haul road.