Tag Archives: contract mining

Nordic Gold cuts ties with Tallqvist Oy, puts Laiva on care and maintenance

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Nordic Gold has terminated its agreement with mining contractor Tallqvist Oy and decided to place the Laiva gold mine, in Finland, on care and maintenance, months after pouring first gold.

The contractor decision follows continued underperformance, resulting in a shortfall in tonnes and grade to the mill, Nordic Gold said. “Despite written warnings, only slight improvements have been made and the contract with the current mining contractor has now been terminated in order to reduce the outflow of cash,” the company said.

To further conserve cash, the Laiva mine will be placed on care and maintenance while an alternative contractor is engaged and additional financing is found, Nordic Gold said. Care and maintenance is expected to last for around three to four months, according to the company.

Nordic Gold said: “The process of engaging another contractor has begun. A scope of work has been issued and several competitively priced proposals have been received.”

Jett Capital Advisors, of New York, has been engaged to help Nordic secure $35 million in debt financing. This money will be used to restart the mine and mill and replace its current lender, according to the company. The company is currently in discussion with several parties interested in providing this capital.

In addition to replacing the current lender, these funds will provide working capital for ongoing operations and provide funds for drilling to expand the resource.

Since the first gold pour on November 30, Laiva has produced 6,920 oz of gold and received $8.8 million from gold sales.

BGC considering sale of contract mining business

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The BGC Pty Ltd Board has advised it is exploring options for the group’s national contract mining, maintenance and civil construction business, BGC Contracting.

BGC Chairman Neil Hamilton said the process will be led by its corporate advisor, Macquarie Capital, which, in conjunction with the group’s management, has commenced exploring several strategic options for BGC Contracting including a possible sale, divestment of parts of the business and/or alternate operating models or structures.

Hamilton said: “While this review is ongoing, it will be business as usual for our customers and our staff, and the focus of BGC Contracting will continue to be on delivering excellent services for our customers.”

Plans to divest BGC’s core building materials and construction businesses have been deferred for the foreseeable future, BGC said.

As part of this strategic review process, the BGC board has decided to introduce an independent executive structure for BGC, with the appointment of a CEO to manage the ongoing operations of the group, according to Hamilton.

This will see, with immediate effect, Alan Tate, Group CFO, assume the role of acting CEO, with Sam and Andrew Buckeridge and Julian Ambrose relinquishing their respective day-to-day executive responsibilities.

The board has also initiated a search for a permanent CEO and will announce this appointment in due course.

Just a week before this announcement, BGC Contracting announced it had recently been awarded the earthworks construction contract for Albemarle Group’s Kemerton lithium project.

Basil Read subsidiary to sell out of Majwe Mining JV in Botswana

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Basil Read Mining Botswana (BRMB), a wholly owned subsidiary of Basil Read Mining, has entered into an agreement with Thiess Botswana and Bothakga Burrow Botswana (BBB) to sell its 28% interest in the Majwe Mining joint venture to the two firms.

BRMB will sell 28 ordinary shares constituting 28% of the issued shares of Majwe for an amount of BWP85 million ($8.1 million) of which Thiess will acquire 10 ordinary shares and BBB will purchase 18 ordinary shares of the joint venture.

The joint venture dates to 2011 when entered into a pact with Leighton Botswana (later named Thiess Botswana) and BBB to bid for, and if successful, carry out the surface mining works project at Debswana’s Jwaneng diamond mine (pictured) Cut 8 contract mining project. On being awarded the contract in May 2011, the MMJV was incorporated.

The Cut 8 project was for a 66-month period ending in November 2016, but was extended through the addition of Cut 8.3, which ended on November 23, 2018.

In 2017, Debswana issued an expression of interest for the mining works project for the next stage of the Jwaneng mine development, known as the Cut 9 contract mining project. Majwe JV responded to this and was subsequently invited to submit a tender bid in February 2018.

Basil Read said the negotiations are still ongoing and at an advanced stage, with the project expected to commence this year.

The company said: “BRMB’s participation in the Cut 9 project would mean that BRMB continues being restricted from competing in Botswana as an independent entity, and thus limit its ability to unlock capital by growing and expanding its current business in Botswana.

“Participation in the Cut 9 project also requires the provision of both parent company and on-demand financial guarantees, further adding onerous obligations on BRMB. A call made on the guarantees would offset any returns from the project.

“Moreover, the shareholders of Majwe JV have been engaged in negotiations to increase the local citizen economic empowerment levels from the current 12% held by BBB up to 30% as per the tender requirement for the Cut 9 project. This will result in BRMB’s shareholding being diluted significantly.”

The company concluded: “Thus, the Basil Read group is of the view that the Majwe JV shareholding is a non-core asset. In our view, the required capital outlay can be used far more beneficially by funding the required plant and equipment replacements to pursue other opportunities for our mining business both in Botswana and elsewhere.”

Thiess extends mining services at BMA’s Caval Ridge coal operation

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Thiess has secured a A$150 million ($108 million) contract extension with BHP Billiton Mitsubishi Alliance’s (BMA) Caval Ridge coal mine in the Bowen Basin of Queensland, Australia.

The variation will see Thiess mine additional overburden through 2020 as per the terms of the contract, after commencing work at Caval Ridge in November 2017.

Thiess will continue to provide mining services for specific components of work including the services required for Caval Ridge Southern Circuit (CRSC).

CRSC is an 11 km overland conveyor system which will transport coal from the Peak Downs mine to the coal handling preparation plant (CHPP) at Caval Ridge. It will result in the CHPP increasing its throughput to reach its 10 Mt/y capacity.

Construction of the project was scheduled to commence in mid-2017 and take 18 months to complete. In addition to the new conveyor and associated tie-ins, the project will also mean a new stockpile pad and run-of-mine station at Peak Downs and, at Caval Ridge, the existing CHPP and stockyard will be upgraded. BMA will also invest in a new mining fleet, including excavators and trucks.

BMA is Australia’s largest coal producer and supplier of seaborne metallurgical coal. It is owned 50:50 by BHP and Mitsubishi Development, operates seven Bowen Basin mines (Goonyella Riverside, Broadmeadow, Daunia, Peak Downs, Saraji, Blackwater and Caval Ridge) and owns and operates the Hay Point Coal Terminal, near Mackay.

MACA set for open-pit mining and process plant work at Echo’s Yandal gold project

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Two of MACA Limited’s subsidiaries look set to carry out open-pit mining and refurbish the mill at Echo Resources’ Yandal gold project in Western Australia.

MACA said a letter of intent (LoI) had been signed that could see MACA Mining awarded an open-pit mining services contract and MACA Interquip receive a mill refurbishment contract.

These two contracts hinge on the Echo Board of Directors proceeding with an investment to develop Yandal and the project receiving all statutory approvals.

The scope of work to be undertaken under the mining contract will include load and haul, and drill and blast, with the pricing of the agreement to be updated (using the same inputs as tendered, adjusted for rise and fall) based on the final Yandal mine plans from a bankable feasibility study (BFS).

The mill contract is to include refurbishment and commissioning. MACA said: “While final pricing is to be determined under the aforementioned methodology, the previously released BFS for Stage 1 estimated mining costs at A$172 million ($124 million).”

Yandal, located 83 km northeast of Leinster in Western Australia, will treat ore through the 2 Mt/y Bronzewing processing plant (pictured), which is currently on care and maintenance. The project has existing mineral resources of 1.7 Moz of gold and ore reserves of 856,000 oz. The previously released BFS for Stage 1 envisaged the development of an 1.8 Mt/y operation able to produce 746,000 oz of gold over an eight-and-a-half-year life.

In addition to this LoI, MACA said, following mobilisation and early site establishment activities at the Bluff coal project in Queensland, Australia, mining of overburden would commence on or around December 10. MACA was previously awarded a A$700 million life of mine contract at Bluff from Wealth Mining.

MC Mining looks to China for Makhado coal project construction and capital

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MC Mining has signed heads of agreements with Chinese construction enterprise China Railway International Group Co Ltd that could see the firm finance and carry out the construction of the coal handling and processing plant for the Makhado project in the Limpopo Province of South Africa.

Under the terms of the HOAs, MC Mining and CRIG have agreed to negotiate a package that comprises the engineering, procurement and construction (EPC) for Makhado’s plant, financing for 85% of the EPC costs, and contract mining operations.

Makhado is envisaged as 12.6 Mt/y run of mine open-pit coal mine yielding 2.3 Mt/y of hard coking coal and 3.2 Mt/y of thermal coal for domestic or export markets. In the company’s latest interim results presentation, MC Mining pegged the construction capital and period at $79 million and 12 months, respectively,

The HOA agreements with CRIG are conditional upon the final terms and conditions being signed by June 2019. This includes completion of the Makhado front end engineering and design study and agreement on the EPC contract price by both parties, as well as appropriate funding provided on acceptable terms.

“The development of the Makhado project is expected to facilitate economic growth in the Limpopo province and the company will keep the market appraised on further progress with regards to the ongoing discussions with CRIG,” MC Mining said.

Offtake discussions for hard coking and export thermal coal production from Makhado are currently ongoing with various parties, it added.

The agreements follow swiftly on the heels of MC Mining receiving a positive ruling from local and national regulators in relation to the project’s Environmental Authorisation.

Downer receives five-year extension at Commodore open-pit coal mine

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Downer EDI Limited and Millmerran Power Partners are to continue their partnership at the Commodore open-pit coal operation in southeast Queensland, Australia, after agreeing a five-year extension of contract mining services.

The contract extension is valued at A$286 million ($204 million), according to Downer, and will see the company carry out operations at Commodore until the end of August 2024. Downer has been providing a “total mining service” at Commodore since 2001 to deliver coal to the adjacent power station.

The scope of works includes operating and managing the mine and associated activities, including mine planning and design, drill and blast, overburden removal, coal mining and rehabilitation. Downer also holds statutory responsibility for the mine site.

Downer CEO Grant Fenn said the contract extension was a clear demonstration of Downer’s ability to deliver value for its customers.

“Downer has a strong record of providing mining services to Millmerran Power Partners and helping it to drive efficiencies across its operations. We look forward to extending our working relationship and continuing to deliver efficient solutions for the Commodore mine,” he said.

The contract builds on Downer’s recent successes in the mining, energy and resources and industrial sectors with the award of a A$120 million mining services contract at the CSA mine in New South Wales, a five-year maintenance and support services contract at the Chevron-operated Gorgon and Wheatstone facilities in Western Australia, and a A$660 million underground mining services contract at the Carrapateena copper-gold mine in South Australia.

MACA wins contract mining job at Blackwater coal project in Queensland

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MACA is about to start work on Wealth Mining’s Bluff coal project in the Bowen Basin of Queensland after being chosen as the main contract miner.

The contractor will carry out all open-pit mining activities including planning, procurement, management and supervision, load and haul, drill and blast, and water management at the project, with the agreement expected to generate some A$700 million ($507 million) in revenue over the 10-year mine life.

MACA said the project will broaden its commodity exposure and geographical footprint, while allowing it to use larger fleet classes including 350 t excavators and 220 t and 180 t dump trucks. The fleet is expected to be a mix of acquired and hired equipment with MACA estimating capital expenditure of A$45 million.

Bluff, which was acquired by current owner Wealth Mining via its takeover of Carabella Resources in February 2014, will produce around 12 Mt/y of pulverised coal injection product. Coal will be processed with existing infrastructure at the Cook colliery (pictured), which was recently acquired and recommissioned by the Bounty Mining Group and has readily available port and rail access.

The project has a granted mining lease in place together with environmental authority approval.

Contract works will start in the December quarter with first coal expected to be produced in the March quarter of 2019.

“The project will be an ‘Alliance’ style contract aimed at delivering the lowest possible cost to our client,” MACA said. Employee numbers are expected to total 140 people.

MACA will finance the drop cut to first coal and other minor project works via a secured working capital facility of A$25 million. The contract takes the company’s work in hand position to A$1.982 billion and leaves it on track to hit revenue guidance of A$620 million for the full financial year to end-June 2019.

Trollope to take over mining at Lucara’s Karowe diamond operation

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Aveng Moolmans and Lucara Diamond Corp have agreed to cut short a six-year mining contract at the Karowe mine, in Botswana, following equipment availability issues and difficulties with waste mining, the diamond miner said.

Moolman Mining Botswana, an Aveng subisidiary, was awarded the contract to deliver the full suite of mining services at the Karowe mine, including all drill, blast, load and haul functions for both ore and waste, in January 2017.

In Lucara’s June quarter results, it said the two companies had continued to work to “find a solution” to the problems experienced during the March quarter of 2018 and, following extensive discussions in May and June, both parties had agreed to terminate the contract at the end of 2018.

In the March quarter, ore mined volumes and carats recovered were as expected, but waste mining was lower than forecast at just under 4 Mt.

Lucara said performance stepped up “considerably” during the June quarter – with 4.4 Mt of waste mined – and continued through the month of July, the first full month of transition between Moolmans and new contractor Trollope Mining Services.

As a result of this, waste mining was still expected to be within guidance (13-16 Mt) for the year, while diamonds recovered were expected to total 270,000-290,000 ct.

Lucara said of the contractor transition: “The addendum provides for a transition period of up to six months to allow for a new mining contractor, Trollope, to gradually assume responsibility for both ore and waste mining from Moolmans, with full responsibility for all mining activities to be the responsibility of Trollope as of January 1, 2019.”

Trollope, based in Johannesburg, South Africa, has previously worked with companies such as Exxaro, Anglo American, Harmony Gold and BHP.

Aveng Moolmans took over from former contractor Eqstra Botswana in 2017, which also had its contract cut short.