Tag Archives: Downer EDI

MACA expands WA presence with Mining West acquisition

MACA Ltd has completed the acquisition of the Mining West business from Downer EDI Ltd, bringing with it four contracts at long-life mining assets in Western Australia.

The Mining West business currently comprises four contracts at Karara (Ansteel), Eliwana (Fortescue Metals Group), Cape Preston (Citic Pacific) and Gruyere (Gold Fields, Gold Road Resources), with each of the four novating successfully to MACA, taking effect from completion, MACA said.

Additionally, in excess of 96% of the Mining West workforce has accepted employment with MACA, the ASX-listed contractor said.

MACA’s CEO and Managing Director, Mike Sutton, said: “Acquisition of the Mining West business will provide MACA with a very meaningful addition of a large-scale mining fleet that is currently engaged across four long-life projects, all with quality customers that are well known to me and other key members of MACA’s management team.”

This fleet comprises 14 excavators and shovels, 65 dump trucks, 11 surface drills and 36 other ancillary machines.

“With the inclusion of Mining West, MACA now has total contracted work in hand of A$3.3 billion ($2.5 billion) at December 31, 2020, that provides a robust revenue base well past financial year 2025. MACA remains very active with its tendering activities and is well placed to pursue a significant number of opportunities across both current and new projects.”

Downer says it will receive over A$200 million in cash proceeds as a result of the sale.

Byrnecut adds Carrapateena to OZ Minerals underground contract mining portfolio

OZ Minerals Ltd has changed underground mining contractor at its Carrapateena copper-gold mine in South Australia following Downer EDI’s move to divest its mining services businesses to MACA.

The company has now signed an agreement with Byrnecut Australia for the delivery of underground mining and associated mining services at Carrapateena. The two companies know each other well, with Byrnecut already carrying out underground mining services at OZ Minerals’ Prominent Hill for the past 10 years.

The five-year alliance-style contract with Byrnecut is valued at circa-A$130 million/y ($101 million/y), OZ Minerals said. Byrnecut has already commenced a seven-week mobilisation to the Carrapateena site and will assume full responsibility for mining services delivery from March 4, 2021.

“OZ Minerals, Byrnecut and Downer will work together during the transition period to ensure continuity of operational performance and development, and employee support and opportunities, with the objective of providing roles for the majority of the incumbent underground workforce,” the company said. “This transition will include the transfer of equipment from Downer to Byrnecut.”

Byrnecut will now provide underground mining services to both the Carrapateena and Prominent Hill mines.

“Byrnecut is a proven top-tier underground mining contractor who has been providing underground mining services to Prominent Hill for the past 10 years, with their Prominent Hill contract having been renewed in 2020,” OZ Minerals said.

The scope of work comprises all underground mining activity for the duration of the contract including production and development mining and associated mining services; and bedding in steady-state operations at nameplate site capacity.

MACA increases open-pit scale by acquiring Downer EDI’s Mining West business

MACA has entered into a binding agreement to acquire Downer EDI Limited’s Mining West business in a deal that could involve a consideration of A$175 million ($132 million).

Just last week, MACA said it was considering the potential purchase of Downer EDI Limited’s Mining West division as part of a stated plan to explore and pursue growth opportunities that will deliver “value to shareholders on an ongoing basis”.

The Mining West business currently comprises four large contracts at the long-life assets of Karara (Ansteel), Eliwana (Fortescue Metals Group), Cape Preston (CITIC Pacific) and Gruyere (Gold Fields, Gold Road Resources).

MACA’s CEO and Managing Director, Mike Sutton, said the acquisition provided MACA with a very meaningful addition of a large-scale mining fleet currently engaged across these projects. This comprises 14 excavators and shovels, 65 dump trucks, 11 surface drills and 36 other ancillary machines.

The fleet being acquired is currently fully utilised, or in the process of being deployed to projects, with the equipment having mixed life (with machines being on average mid-life). MACA says its due diligence has confirmed the machines are in good working order, having been well maintained by Mining West’s internal plant department.

With the inclusion of Mining West, MACA now has total contracted work in hand of over A$3.4 billion, which provides a robust revenue base well past its 2025 financial year, Sutton added.

MACA eyes up Downer’s Open Cut Mining West division

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.

Downer suspends mining business review on market volatility

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.

Downer EDI to continue work at Stanwell’s Meandu coal mine

Downer EDI has been awarded a five-year contract extension, valued at around A$600 million ($412 million), to provide mining and related services at the Meandu coal mine, in Queensland, Australia.

The mine is owned by Stanwell Corp, has a 7.6 Mt/y thermal coal capability and is in Queensland’s South Burnett Region.

Under the contract, Downer will carry out full mining services, including operation of the coal handling and preparation plant (CHPP). The new contract extends Downer’s current remit at the mine, which commenced in 2013 and expires on June 30, 2020. The new contract will commence on July 1.

Grant Fenn, CEO of Downer, said: “Downer has worked closely with Stanwell since 2013 and we look forward to continuing to provide safe and productive services at Meandu mine.”

Downer’s Queensland operations include the Blackwater, Commodore, Goonyella and Meandu coal mines.

Downer receives two-year extension at BMA’s Goonyella Riverside coal mine

Downer EDI says it has been awarded a A$200 million ($134 million) contract extension to provide mining and related services at BHP Billiton Mitsubishi Alliance’s (BMA) Goonyella Riverside coal mine, in Queensland, Australia.

The two-year contract commences today and replaces an existing agreement that commenced in 2016 and expired on September 30, 2019. It also has provisions for it to be extended for up to a further three years.

The scope of work to be carried out by Downer under the contract is pre-strip overburden removal, with Downer intended to use existing capital equipment to carry out this task.

Chief Executive Officer of Downer, Grant Fenn, said: “Downer has been working closely with BMA at a number of mine sites for many years and we look forward to continuing to provide safe and productive services at the Goonyella Riverside coal mine.”

Downer is providing similar services in Queensland at the likes of Blackwater, Goonyella, Commodore and Meandu mines.

Gold Road and Gold Fields Gruyere JV on track for June quarter pour

Gold Road Resources and Gold Fields’ jointly-owned Gruyere gold project in Western Australia is on track to pour first gold in the June quarter, the companies said in a construction and commissioning update this week.

Construction of the project, around 200 km east of Laverton in WA, was 91.2% complete as of January 18, 2019, with first ore mined on schedule this month. Downer, the mining contractor, has commenced double‐shift operations as part of the production ramp‐up, the companies said.

Gruyere is expected to produce 85,000-120,000 oz of gold in 2019. Once steady state production is achieved, the average annual production is forecast at 300,000 oz.

To de‐risk the project start‐up, a significant amount of ore is expected to be stockpiled in advance of first gold production, the companies noted, adding that construction works in the primary crusher area were substantially complete. Ore commissioning of the primary crusher to coarse ore stockpile circuit is in progress, they said.

The remaining process plant construction works are concentrated in the milling, carbon-in-leach and elution areas, and include piping, electrical and instrumentation installations and progressive commissioning of systems and equipment through these areas.

The project team at Gruyere includes a joint venture EPC contractor, Amec Foster Wheeler Civmec Joint Venture, MACA Ltd, which is carrying out bulk earthworks at Gruyere, and Downer EDI, which was previously awarded a five-year mining services contract.

Gold Road and Gold Fields said the project remained on schedule for first gold production in the June quarter and within previously announced forecast total cost estimates of A$621 million ($445 million).

Downer EDI to maintain BHP’s Port Hedland iron ore export facilities

Downer EDI has been granted a three-year maintenance contract by BHP’s iron ore division as the world’s biggest miner by market capitalisation looks to shore up its export facilities in Port Hedland, Western Australia.

Downer’s scope of works spans the maintenance of the Port Hedland export operations across the Finucane Island and Nelson Point facilities. This will include the provision of mechanical, electrical, heating, ventilating and air conditioning, minor civils, rope access services and integration with the BHP maintenance team in planning and executing the services, Downer said.

This is the second such maintenance contract BHP’s iron ore divison has awarded in recent days.  The company, this week, signed a similar agreement with Monadelphous that covered five of its iron ore mines.

Grant Fenn, Chief Executive Officer of Downer, said the contract win demonstrated Downer’s leading position in the delivery of major maintenance and industrial services to customers in the resources and energy sectors.

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

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.