Tag Archives: contract mining

CIMIC eyes more coal work as Q1 financials hold up

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Australia-based engineering-led group, CIMIC, posted “robust” operating profit margins in its March quarter results, remarking that the mining market is proving resilient throughout the turbulence caused by the fallout of the COVID-19 pandemic.

Revenue came in at A$3.3 billion ($2.1 billion) for the three-month period, slightly down on last year’s A$3.4 billion, while net profit after tax was A$166 million, compared with A$181.1 million in the March quarter of 2019.

Its operating profit margin was 8.4% for the period.

Throughout the quarter, the company said it had witnessed stable investment in capital expenditure to sustain mining operations. Its UGL subsidiary secured contracts to provide maintenance, shutdown and project services for clients in the mining sector, and its Thiess and Sedgman subsidiaries secured framework agreements with Rio Tinto Iron Ore, in Western Australia, and variations to operations contracts in New South Wales, respectively.

The future prospects for the company look good with, as at March 31, around A$90 billion of tenders relevant to CIMIC expected to be bid and/or awarded for the remainder of 2020, and around A$400 billion of projects coming to the market in 2021 and beyond, it said.

Some major projects the company is currently bidding on include the Lake Vermont mining extension contract in Queensland, Australia. CIMIC’s Thiess is currently working on this Jellinbah Group-owned coal asset through a schedule of rates contract that sees it carry out coal mining, clearing and grubbing, topsoil removal, drill and blast, overburden removal and rehabilitation of final landforms. It also provides all mobile plant and equipment and operates and maintains the client’s coal handling and preparation plant at the site, according to Thiess.

Another contract the company is eying up for more work is the Kaltim Prima Coal (KPC) mining extension in Indonesia. Again, Thiess has a schedule of rates contract in place at the 11 Mt/y Sangatta coal operation and the company hopes it can continue its relationship with the mine with a 2022 contract extension.

Redpath Australia to work on Silver Lake’s Rothsay gold project

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Redpath Australia says it has been awarded a contract to carry out underground mining services at Silver Lake Resources’ Rothsay gold project, in Western Australia.

The contract includes portal and decline development, which is due to commence in the September quarter of 2020, according to the company.

Rothsay is within the Warriedar Greenstone gold belt of the Yalgoo Goldfield in the Southern Murchison Region of Western Australia. The current project plan would see mineralised ore extracted from narrow sub-vertical structures, according to Redpath.

“Rothsay has a rich mining history dating back to the discovery of gold in 1894 and including several phases of mining, most recently by Metana Minerals in the early 1990s,” it said.

Redpath Managing Director, Gavin Ramage, said: “We are looking forward to working with the Silver Lake Resources team in increasing value for their shareholders through safe and efficient delivery of underground mining services.”

In its March quarter results, Silver Lake Resources said pre-development activities had continued at Rothsay, including the commencement of the tendering process for key construction and operational contracts.

It said it expected Rothsay ore to form part of the Deflector mine feed from the September quarter of 2022, “in parallel with the Deflector plant upgrade”.

When the company announced plans to acquire Egan Street Resources – thereby adding Rothsay to its books – last year, it said Rothsay would bring an additional 454,000 oz of gold JORC resources and 200,000 oz of gold reserves to its portfolio.

It also said the addition of Rothsay provided it with a near-term development opportunity to introduce a new high-grade ore source to an upgraded Deflector processing facility.

The Deflector gold-copper mine is around 85 km from Rothsay, and produced first gold in May 2016.

A shallow narrow vein, high-grade gold and copper underground mine, Deflector also has a fit-for-purpose processing facility to enable recovery of gold from a gravity circuit, prior to the production of a copper-gold concentrate via flotation.

Macmahon confirms extended stay at Silver Lake’s Mount Monger ops

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Macmahon Holdings says its GBF underground mining services business has now finalised and signed contracts with Silver Lake Resources for additional work at the miner’s Mount Monger gold operations, in Western Australia.

The contractor announced back in February that a conditional letter of intent had been received by GBF, which Macmahon acquired in 2019.

Macmahon said: “These contracts will extend GBF’s tenure at Mount Monger to March 2023, and will add approximately A$200 million ($121 million) to its order book.”

GBF has been operating at Mount Monger since 2014, providing mining services to the Daisy Complex, Cock-eyed Bob and Maxwells mines, which form part of this operation.

The new contract sees GBF add the development of Silver Lake’s new Santa mine, which has an underground reserve of 257,000 t at 3.5 g/t Au for 29,000 oz of gold, to the remit. The first firing of the portal at Santa (pictured here) took place on March 1, according to the miner.

PYBAR encourages next generation of miners with scholarship program

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PYBAR says it has introduced a new scholarship in partnership with the Curtin University Western Australian School of Mines (WASM) to support a full-time student doing a resource-related undergraduate degree.

The PYBAR Scholarship for Engineering Excellence will be offered to an eligible second-year student studying either a Bachelor of Engineering (Mining Engineering) or Bachelor of Science (Mining) delivered at the WASM campus in Kalgoorlie.

The scholarship is worth A$10,000/y ($5,761/y) over a maximum period of three years and will be awarded to a suitable applicant this year, the contract miner said.

The scholarship furthers PYBAR’s commitment to facilitating skills development and training in the mining sector, which has experienced a decline in the number of engineering students or graduates in recent years, it said. PYBAR has sponsored the WASM Graduates Association for the past four years, prior to converting to this new scholarship arrangement.

PYBAR Chief Executive Officer, Brendan Rouse, said: “This new scholarship forms part of our efforts to contribute to the long-term future of the mining industry in Australia.

“We believe we have a responsibility to nurture future generations of mining professionals and we take this very seriously. WASM has a strong reputation for excellence with many of its graduates employed in the Australian mining sector. We would like to give a deserving student a similar opportunity.”

PYBAR has several other skill development initiatives in place, including an active graduate program and annual vacation work opportunities for students at its various sites, it said. The new WASM scholarship enhances and supports these activities.

In 2019, PYBAR established the Australian Institute of Mining (AIM), a Registered Training Organisation (RTO) providing nationally-accredited training to support people and services improvement across the underground mining sector.

Downer suspends mining business review on market volatility

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Downer EDI Ltd says it will suspend the review process relating to its mining business due to the “extraordinary market volatility caused by the COVID-19 pandemic”.

The company announced back in August that it was undertaking a review of its portfolio and that its Mining business would be an important area of focus, explaining that the process would include evaluation of a potential sale.

Grant Fenn, Chief Executive Officer of Downer, said its Mining business was currently performing well.

“As we said when we announced the portfolio review, Downer’s Mining business is a leader in Australia with a proven track record and it is well positioned to build on its strong market position and pipeline of work,” he said.

Contract wins since the company announced the review process include a five-year contract extension at the Meandu coal mine in Queensland, circa-A$165 million ($102 million) in contracts from Alinta Energy related to the solar project at Fortescue Metals Group’s Chichester Hub iron ore operations in Western Australia, and a two-year extension at BHP Billiton Mitsubishi Alliance’s Goonyella Riverside coal mine in Queensland.

Perenti, which advised the ASX on February 5 that it “was considering a potential acquisition of Downer Mining”, also said it had “suspended participation in the sale process” conducted by Downer due to current market conditions.

MACA to mobilise to Okvau gold project in August

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More than a year after signing a memorandum of understanding (MoU) with a subsidiary of Emerald Resources to supply equipment and contract mining services at the Okvau gold project in Cambodia, MACA has been confirmed as the mining contractor.

As part of the new agreement, ASX-listed MACA is to supply earthmoving equipment and conduct contract mining services at Okvau.

Emerald said: “The signing of the mining contract follows extensive work with MACA around scheduling of pre-production and production mining.”

The company added: “It represents a positive step in the development of the Okvau gold project by adding a high level of confidence in the execution of the mining schedule with the highly experienced MACA earthmoving team.”

The contract provides for the use of new fit for purpose earthmoving equipment with an onsite expatriate management team experienced in similar international operations, according to Emerald.

MACA’s proposed scope of work includes site preparation, drill and blast, load and haul and maintenance works. This equates to around $230 million in revenue over the seven-year term.

Mobilisation activities are expected to commence in August ahead of pre-production mining in October 2020. First gold is expected in the June quarter of 2021.

Last month, Outotec booked a €13 million ($14.2 million) order from the project, with the Finland-based company set to deliver an Outotec HIGmill® high intensity grinding mill, a SAG mill, TankCell® flotation cells, an OKTOP® Conditioner, thickeners and spare parts to the project.

Emerald Managing Director, Morgan Hart, said: “We are extremely pleased to have appointed MACA as the mining contractor for the Okvau gold project operations which continues the existing relationship between the Emerald and MACA management teams. The signing of the Mining Contract follows a thorough and collaborative process with both teams in finalising the mining schedule for the development and operations of the Okvau gold project.”

He said the sealing of this contract gave the company “greater confidence” to achieve its goal of becoming the first modern large-scale Cambodian gold producer by the June quarter of 2021.

A definitive feasibility study on the project displayed an ore reserve of 14.3 Mt at 2 g/t Au for 900,000 oz of gold in a single open pit with a waste:ore ratio of 5.8:1. The life of mine average annual production came in at 106,000 oz with an all-in sustaining cost of $754/oz.

Barrick tasks Barminco with turning Hemlo into Tier Two UG gold mine

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More than four months after Barrick Gold announced it intended to phase out open-pit mining and move to an underground contract mining model at its Hemlo operations in Ontario, Canada, a contract miner has been named.

Perenti confirmed its underground hard-rock contract mining subsidiary, Barminco, had received the nod from the gold miner, being issued a letter of intent to provide underground contract mining services at the mine, which has produced more than 21 Moz of gold over 30 years of operation.

Under the proposed three-year, circa-A$200 million ($131 million) mining services contract, Barminco will “bring industry-leading technology and productivity to Hemlo in support of Barrick’s goal to modernise and improve the performance of the mine and establish it as a Tier Two asset within its group”, ASX-listed Perenti said.

Barrick previously said the modernisation and refocusing plan at Hemlo was designed to turn it into a Tier Two asset with a life of mine well into the future.

Barminco’s scope includes undertaking mine development, production and haulage, using mining equipment provided by Barrick. Up until recently there was a significant degree of autonomy in the Hemlo fleet including trucks and LHDs from Sandvik and Epiroc.

Barminco said it anticipates employing more than 300 people at the operation, with works commencing in April.

Perenti Group Managing Director, Mark Norwell, said the contract award was another significant step in the group’s international growth strategy to enter attractive and stable mining jurisdictions.

“This is Barminco and Perenti’s first significant contract in North America and builds on our regional growth capabilities, after expanding into Botswana last year with an A$800 million contract. We look forward to supporting Barrick to deliver outstanding results at Hemlo,” he said.

Underground Chief Executive Officer, Paul Muller, said: “We are thrilled to be in a position to support Barrick to improve the performance of the Hemlo mine. We intend to work very closely with Barrick and all key stakeholders, including the incumbent workforce at Hemlo, the Pic River and Pic Mobert First Nations people and the Marathon community more generally to deliver a sustainable improvement in performance, thereby assuring the future of Hemlo.”

Wenco fleet management solution to monitor, control production at Antofagasta’s Centinela

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Thiess has chosen the Wenco Mine Performance Suite to run its operations at Antofagasta’s Centinela copper mine in northern Chile.

Centinela sits 1,350 km north of Santiago in the Antofagasta Region of Chile. Antofagasta Minerals has contracted Thiess, the world’s largest mining contractor, to develop the Encuentro Oxides pit, which will contribute to the mine’s production of 50,000 t/y of copper cathode for a planned lifespan of 15 years.

To monitor and control this production, Thiess is leveraging the Wencomine fleet management system. The system will optimise productivity and efficiency across the pit’s 56 active units, including 12 high-precision loading units and five high-precision drill rigs, according to Wenco.

Wenco’s data solutions are designed to boost productivity, decrease operating costs, extend equipment life, and give mining companies actionable insights into their operations. Its Mine Performance Suite consists of systems for fleet management, high-precision machine guidance, predictive maintenance, collision avoidance, and mining business intelligence.

Unlike other solution providers, Wenco, a Hitachi Group Company since 2009, has designed its systems with an “open systems philosophy” that, it says, “empowers customers to freely integrate systems to support their unique business processes, data requirements, and reporting needs”.

Thiess chose Wenco for its reputation in delivering strong production functionality and a streamlined implementation process with minimal impact on day-to-day mine operations, it said.

Wenco said: “Expanding the business relationship with Thiess in South America is strategically important for Wenco as well. Contractor-operated sites are common throughout the region and they stand as a significant growth market for the company. Likewise, contractor partnerships form a key part of the open and interoperable ecosystem of partners pushed by Wenco and its parent company, Hitachi Construction Machinery.”

Wenco Regional Manager — Latin America, José Eugenio Saravia, said: “We’re very pleased to implement the Wenco Mine Performance Suite at the Encuentro Oxides development.

“Wenco has worked with Thiess at various mining developments around the world and our solutions are ideal for the productivity improvements and ease of deployment they require. We’re looking forward to a long and profitable business together.”

This sale is another boon to Wenco in the region, following recent sales to Chinchillas and Pucamarca mines and a new partnership with Brazil mining solutions provider Tecwise.

“Contractors like Thiess are a major growth area for Wenco and the industry as a whole. We’re seeing a great many more opportunities of this sort throughout Latin America,” Saravia says.

“As well, we’re seeing more and more customers excited to partner with a Hitachi-owned company like Wenco, who can deliver the reliability and support only available from a major OEM and global mining leader.”

Bassari drafts in Junction Contract Mining for Makabingui gold project

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Bassari Resources says it has appointed Senegal-registered Junction Contract Mining SARL (JCM) as the contract miner for its Makabingui gold project.

JCM, which is headquartered in Perth, West Australia, has a long and successful history of contract mining in West Africa, according to the ASX-listed company.

A feasibility study on Makabingui, in Senegal, showed plans for an initial 1 Mt open-pit project mining at 5.7g/t Au for 174,000 oz of production inventory. This came with a $90 million “pre-capex” bill.

Bassari said the contract miner has already arranged for the supply and immediate import to Senegal of the necessary mining equipment, including excavators, trucks, loaders, drilling rigs, grader, bulldozer, compactor, telehander, etc.

The appointment provides significant capital savings to the project, Bassari said, adding that the new equipment, sourced in Europe, facilitates mining commencing in the near term, following the arrival of the equipment into Dakar.

JCM work will include, but not be confined to the following:

  • Planning and management of the mining work;
  • Mobilisation and establishment;
  • Maintenance of mining plant and equipment;
  • Clearing and grubbing of the mine site;
  • Construct and manage all in-pit drainage;
  • Drill and blast ore and waste material;
  • Provide all explosives and blasting agents;
  • Excavation and haulage of all waste rock;
  • Selective mining and haulage of all ores to stockpiles and processing plant;
  • Construct and maintain all on-site access and haul roads;
  • Management of stockpiling and dumping areas;
  • Provide grade control samples from RC and blasthole drilling;
  • Carry out secondary crushing of ore at mine site; and
  • Provision of management, safety, environmental and quality assurance plans.

Perenti’s surface division awarded with A$155.5 million of new contracts

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Perenti reports its Surface Mining Industry Sector Group (ISG) has been awarded A$155.5 million ($103 million) in new and extended contracts.

The new work, extensions, and expansion of scope is across 10 projects, with highlights including:

  • A three-year contract (with options to extend) for production drilling services with Boggabri Coal Operations (a part of Idemitsu Australia Resources Group) at its Boggabri coal mine in New South Wales, Australia;
  • A three-year contract extension with a major iron ore producer for reverse circulation (RC) and grade control drilling at its Western Australian operations;
  • A 12-month contract extension with Consolidated Minerals to support current mining operations and regional expansion projects (which has mining operations in Australia and Ghana);
  • Expansion of services for a major mining contractor in Queensland, which will double the contract value across the current three-year contract duration;
  • A 12-month extension to existing works at Gold Fields’ St Ives and Granny Smith gold projects, in Western Australia, which involves land and lake rigs for air core, RC and diamond drilling; and
  • An equipment hire agreement with E&P at Gold Fields’ Damang gold mine in Ghana.

Perenti Group Managing Director, Mark Norwell, said: “We have been targeting a strong pipeline of surface and underground work and I am pleased we continue to convert these opportunities into secured contracts across a range of different projects in both Australia and Africa.

“These latest awards add to $165 million in surface work we announced in December 2019 and the A$200 million contract we recently announced for our Underground ISG.”