Tag Archives: Joe Lambert

NACG’s MacKellar Group banks five-year met coal contract in Queensland

Coal technology, Mine operation news, Mining equipment, Mining services, , , , ,

North American Construction Group Ltd says the MacKellar Group has been awarded a five-year contract extension by a major metallurgical coal producer in relation to a mine in Queensland, Australia.

The contract contemplates the provision of fully maintained equipment and related services at the site operated by the producer.

The award extends the expiry date from June 6, 2025, to June 30, 2030, and qualifies as contractual backlog given minimum hour commitments in the agreement, NACG says. Rental scopes are estimated at C$100 million ($74 million) per year resulting in a total value from this extension of C$500 million, the company added.

The contract requires the addition of two loading units and one service truck, for between C$20 and C$25 million, which will be purchased by the end of the year and bring the total dedicated fleet at this site to approximately 70 heavy equipment units.

NACG acquired MacKellar in July 2023 for C$395 million.

Joe Lambert, President and CEO of NACG, said: “We are excited about this extension and look forward to continuing the relationship we have with our customer at this site. This is the first material contract we have signed in Australia since the acquisition of MacKellar and are very proud of how well the first five months have gone.

“MacKellar has provided an excellent platform to grow our business in Australia as we leverage our operational and maintenance expertise in the region. We believe this ‘locking in’ of fleet is indicative of the strong demand for heavy equipment in the Australian mining sector. In light of this demand, and bolstered by long-term contracts, we have begun to take steps towards prudently increasing fleet size in Australia, including potentially transferring underutilised Canadian fleet into that market with the goal of maximising overall utilisation.”

North American Construction to increase Australia contract mining exposure with MacKellar buy

Equipment maintenance, Mining equipment, Mining services, , , ,

North American Construction Group says it has entered into a definitive purchase and sale agreement to acquire MacKellar Group for an estimated C$395 million ($300 million).

MacKellar Group, with its heavy construction equipment fleet, is an Australia-based provider of heavy earthworks solutions to the mining and civil sectors, with a reputation derived from decades of reliable performance, NACG says. The transaction will significantly expand NACG’s capability and allow the company to serve a highly valuable and diversified base of customers globally, it added.

The transaction emerged through continued dialogue with MacKellar over the past two years, following NACG’s entry into Australia through the acquisition of DGI Trading Pty Limited in 2021. The acquisition of MacKellar is highly complementary to, and a natural strategic fit with, NACG given shared cultural alignment, focus on safety and operational similarities, NACG says. MacKellar will continue to operate and execute on its growth strategy, while delivering on its commitment of service to all its customers and partners.

MacKellar clients include Anglo American Australia at Dawson in Queensland and Bravus Mining and Resources, also in Queensland.

Joe Lambert, Chief Executive Officer of NACG, said: “NACG has built a strong relationship with MacKellar over the past two-plus years. Given the operational and cultural similarities that our companies share, this acquisition is a rare and attractive opportunity. Over the years, we have worked extremely hard to be part of the solution to help lower the operating costs of our customers through safe, efficient operation and maintenance of our equipment fleet. We are excited about partnering with MacKellar to serve our expanded customer base with the same innovations at a time when commodity producers are striving to maximise production and efficiency.”

Duncan MacKellar, Chairman of MacKellar Group, said: “Joining NACG offers a significant opportunity for both companies to share best practices and execute on our growth strategy. Our shared culture, highly skilled maintenance and operations teams, and now global operations will position us as a leader in heavy equipment fleet, allowing us to better serve customers across Australia.”

MacKellar Group adds approximately 450 mobile heavy equipment assets; 1,000 employees, including over 375 maintenance personnel; and 15 operating projects across a variety of service offerings including contract mining, civil earthworks, dry and maintained equipment rentals and component rebuilds to NACG. Its asset base is comprised of a well-maintained fleet operating at effective utilisation levels, it added.

NACG says MacKellar has strong growth prospects and a strong backlog, with operations in Western Australia and Queensland serving as a growth pillar given the large and diverse resource markets combined with a mining friendly jurisdiction. The combined company is expected to have over C$4 billion in contractual backlog by December 31, 2023, which will be the foundation to drive significant growth.

North American Construction Group bolsters vertical integration with DGI Trading

Equipment maintenance, Mining consumables, Mining equipment, Mining maintenance, Mining mergers and acquisitions, Mining services, , , , ,

North American Construction Group has entered into a definitive agreement to acquire Australia-based DGI Trading Pty Ltd for an estimated purchase price of $23.5 million.

DGI, based in Kempsey, New South Wales, supplies production-critical components to the mining industry through business relationships and a complex logistical network, NACG explained. With partners in over 10 key countries, DGI maintains a network of suppliers and partner facilities which enable the connectivity to be both agile and economical, it added.

The acquisition is another strategic step in the company’s efforts to both vertically integrate its capital maintenance program as well as to diversify its service offerings, NACG said.

“The aggregate estimated purchase price represents an EBITDA multiple of three times on a next twelve-month basis based on our belief that current worldwide demand for mining components has recovered to, and will remain stable at or potentially exceed, pre-COVID 19 levels for the next 12 months,” NACG said.

The transaction is expected to close on July 1, 2021, and will be funded through existing debt facilities.

Joe Lambert, President & Chief Executive Officer, said: “NACG has worked with David and his team at DGI for many years and have great respect for their skills and the integrity with which they conduct business. We welcome the DGI team into our NACG family and are very excited to work together to grow and expand the services provided both externally and internally.”

David Griffin, Managing Director of DGI, said: “This is a major opportunity for us to work together to expand on what both businesses do best, providing competitive solutions to the global mining market. We look forward to entering the next chapter of our growth aligned with NACG and welcoming their team into our organisation.”

Key benefits of the transaction for NACG include:

  • Low risk accretive purchase of a well-known and well-run key supplier;
  • Increases vertical integration of component supply process (75% of capital spending); and
  • Provides exposure to new jurisdictions through DGI’s network and experience.

DGI is expected to operate as a wholly owned subsidiary of the company and will retain its brand identity and personnel, NACG said.