Tag Archives: contract mining

Equinox Gold and U&M start mining at Santa Luz in Brazil

Equinox Gold Corp says mining activities are underway at its new Santa Luz gold mine in Brazil, with commissioning on track for the December quarter ahead of first gold pour in the March quarter of 2022.

The company expects to produce 110,000 oz/y of gold for the first five years of operations.

The mining contractor, U&M Mineração e Construção S/A, mobilised to site in May and mining commenced in mid-June. Mining activities are currently focused on removing waste from two locations and developing access roads, ramps, dumps and ore storage areas in preparation for a pre-stripping campaign prior to mining ore in late 2021. To make room for mine expansion, U&M is also relocating an existing ore stockpile with an average grade of 0.9 g/t Au, which will be used for commissioning activities in the December quarter.

Construction is on schedule and on budget, with approximately $31 million of the $103 million construction budget spent and $70 million committed at the end of June 2021.

As a brownfield past-producing mine, the majority of site services and infrastructure is already in place at Santa Luz, Equinox said. Restart activities are focused on refurbishing existing infrastructure, retrofitting the plant to incorporate resin-in-leach processing, installation of additional grinding infrastructure and increasing the storage capacities of the existing tailings and water storage facilities. A significant construction milestone was achieved on June 25 with installation of the first segment of the ball mill.

Construction highlights include:

  • Overall project is 41% complete;
  • Engineering and procurement activities are 96% complete;
  • Plant construction and refurbishment is 46% complete;
  • Refurbishment of existing SAG mill is progressing well;
  • Primary grinding is 75% complete;
  • Secondary grinding is 52% complete: concrete foundations and pedestals for the new ball mill are 100% complete, ball mill installation is underway;
  • Pre-conditioning, leach and detoxification circuit is 46% complete: concrete bases are complete, steel structures are being pre-assembled and tank installation is underway, with four tanks out of 10 fully erected and four more partially erected;
  • Earthworks for primary crushing area are underway;
  • Electrical and substation upgrades are 90% complete;
  • Electrowinning cells have been installed in the gold room;
  • Completion of refurbishment of existing plant areas is scheduled for the September quarter; and
  • Tailings and water storage facility expansions are underway with completion targeted for the December quarter.

Red 5 formalises KOTH contract mining pact with Macmahon

Red 5 Ltd has awarded the King of the Hills (KOTH) mining services contract to Macmahon Contractors Pty Ltd, a subsidiary of civil and mining contractor Macmahon Holdings.

The contract award follows the completion of a thorough competitive tender process in late 2020 for the open-pit and underground mine contracts and encompasses the combined mining operations at KOTH, in Western Australia, Red 5 said.

Red 5 signed a Letter of Intent with Macmahon for the mining contract in March and, following the finalisation of contract terms, has now formally awarded the contract. The contractual terms are in line with the mining unit costs outlined in the KOTH Final Feasibility Study (FFS).

This study outlined a 16-year life of mine plan from open-pit and underground mining, whereby the company would produce 176,000 oz/y of gold over the first six years, with an initial five years of underground mining. First gold is scheduled in the June quarter of 2022.

The mining services contract is for an initial five-year period, with industry-standard incentives and penalties for mining contractor performance.

Red 5 Managing Director, Mark Williams, said the formal award of the contract to Macmahon is a significant milestone for the project.

“We’re pleased to have finalised agreed contract terms with Macmahon and formally appointed them as our open-pit and underground mining contractor,” he said. “Macmahon is one of the strongest mining contractors in the market, and we are looking forward to partnering with them to deliver Australia’s next significant new gold mine.

“Importantly, the contract terms are in line with the mining unit costs outlined in the KOTH FFS. Operational efficiencies and cost benefits have been realised in having both mining operations managed by a single contractor.

“Given the current tightness in the labour market in Western Australia’s mining sector, we believe Macmahon is well placed to secure the skilled resources required to operate the underground and open pit mines at KOTH.”

NRW in line for A$702 million Karara Mining iron ore gig

NRW has received a letter of intent from Karara Mining Ltd to carry out mining services works at the Karara iron ore mine in the Gascoyne region of Western Australia.

Subject to reaching agreement with Karara, the anticipated value of the contract is around A$702 million ($529 million) over a five-year duration with a project workforce averaging circa-250 personnel.

MACA, through its recently acquired Mining West business, currently holds the contract mining agreement at Karara.

The works to be performed include load and haul, drill and blast, and run of mine re-handling. The drill and blast component will be undertaken by NRW’s wholly-owned subsidiary, Action Drill & Blast Pty Ltd. In addition, the work includes train loading and re-handling of the product stockpiles together with “miscellaneous day works” at the mine site, camp and access roads.

Karara is the largest mining operation and the first major magnetite mine in the Mid West region. It produces a premium, high-grade concentrate that it exports to steelmakers.

“With an expected mine life of 30-plus years, Karara’s operation includes a large open-pit mine, complex ore processing and beneficiation plant and significant infrastructure and logistics networks,” NRW said.

NRW estimates an equipment capital expenditure of around A$170 million to be progressively spent over the term, which will include the purchase of three 600 t face shovel excavators and a fleet of 220 t trucks.

NRW CEO, Jules Pemberton, said: “With a strong local presence in the area through our Geraldton-based DIAB Engineering business and our mining contract with Gascoyne Resources at the Dalgaranga mine site, we look forward to continuing to support the existing and highly experienced workforce on site through this transition, as well as creating employment opportunities for the Gascoyne region community.”

Karara CEO, Changjiang Zhu, said: “NRW is an established Western Australia-based mining and civil contractor with extensive open-cut mining experience gained through a number of successful mining operations in the state. Offering new prime equipment, NRW has the capability to undertake the entire Karara scope of work comprising a broad range of mining, construction and engineering services.

“We look forward to negotiation of an agreement with NRW and commencement of mining services early next year.”

Mota-Engil and Mali-owned IMS to tackle Morila satellites and Super Pit

Mining contractor, Mota-Engil, and Mali-owned and operated contractor, Inter-Mining Services (IMS), are to carry out open-pit mining services at the Morila gold mine in Mali, following a contract award from Firefinch Ltd.

The two companies have entered a joint venture to carry out this contract, which will see them mine the satellite pits, Viper and N’tiola, as well as phase 1 mining of the Morila Super Pit.

The contract has an estimated value of some $360 million and includes site preparation and mining operations at the Viper and N’tiola satellite pits, and the Morila Super Pit. The scope of works also includes run of mine stockpile management at the Morila plant.

Mota-Engil have over 75 years of experience operating in Africa, and a demonstrated track record of operating at the scale required to pre-strip and mine the Morila Super Pit, Firefinch said. IMS, meanwhile, has extensive experience operating in the Malian mining sector.

“The combined expertise and capability offered by the joint venture allows for operating at scale, while combining strong local knowledge and content,” Firefinch said.

Work under the JV is scheduled to commence at the satellite pit of Viper and N’tiola in August 2021, with mining at the Morila Super Pit scheduled for the March quarter of 2022.

Firefinch’s Managing Director, Dr Michael Anderson, said: “The joint venture will bring together the capability to operate at scale, and a well-established locally owned and operated business that will maximise local content. It was great to have spent time at Morila and in Bamako this month, where we executed this important milestone. We have identified a solution that brings both local content and the technical capability required to undertake our open pit mining for future years.”

Firefinch has an 80% interest in the Morila gold mine, which has produced 7.5 Moz of gold since 2000. The ASX-listed company acquired the mine in November 2020 with the view to increase production at the 4.5 Mt/y mill from a current annual production profile of 40,000 oz/y of gold from tailings treatment, towards a target of 70,000-90,000 oz/y of gold through mining of small open pits, stocks and tailings from mid-2021. In 2022, Firefinch plans to increase production to 150,000-200,000 oz/y by re-commencing mining from the main Morila pit.

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.”