Tag Archives: mining contractor

Rio2 and STRACON establish mining and construction alliance for Fenix gold project

Rio2 Ltd says it has taken another key step towards the development of its Fenix gold project, in Chile, by selecting STRACON SA as the lead mining services contractor for the project.

Both companies have executed an early contractor involvement (ECI) agreement for early works associated with contract mining services. Under the ECI agreement, the parties will work exclusively over the coming months to further optimise the mining and civil construction aspects of the project and conclude contract documentation.

The scope of the mining services contract will include mining of ore at the rate of 7.3 Mt/y (20,000 t/d), waste mining, drilling, blasting, hauling, supply of operating personnel and mining equipment, supervision and management, dust suppression and road maintenance. The scope also includes water transportation from Copiapó to the mine site and maintenance of the entire mobile fleet of equipment plus all pre-mining and civil construction activities including the construction of platforms, leach pad, ponds, access roads and waste material deposits.

The financial terms of the mining contract will use an alliancing-style commercial framework based on the mine plan, methodologies and productivity estimate assumptions contained in the prefeasibility study, which outlined a heap leach gold mine producing an average of 93,000 oz/y during the first 13 years and 50,000 oz/y during the final three years of production as stockpiled ore is being crushed and leached.

The environmental baseline study for the Environmental Impact Assessment (EIA) of the Fenix gold project has been progressing since November 2018. During 2019, engineering works and studies were completed for inclusion in the EIA. In January 2020, the information gathering stage for the baseline study was finalised, with the EIA completed and filed with the Environmental Impact Assessment System in the March quarter. Environmental approval is expected in the June quarter of 2021.

The preparation of sectorial permit applications is currently in process and will be submitted in conjunction with the filing of the EIA. The approval of sectorial permits is expected in the September quarter of 2021 and the start of earthworks for construction of the project is targeted for the December quarter of 2021.

The basis for Rio2 establishing a mining and construction alliance with STRACON at the Fenix gold project is a best for project business strategy, the company said. Together with STRACON, the Rio2 management team collaborated, implemented and executed with this same approach when they built and operated the La Arena and Shahuindo gold mines in Peru with Rio Alto Mining.

At Fenix, Rio2 and STRACON will work together as an integrated team, dedicated to exceeding goals, controlling budgets and adding value through exceptional performance while working in a safe and environmentally sustainable manner focused on every detail of the mining and construction process, Rio2 said.

“The alliance will implement an inclusive social policy as a priority based on the hiring of local personnel and service companies from Copiapó and the Atacama Region,” it added.

The payment model of an alliance includes reimbursement of 100% of contractor project costs plus a fee (corporate overheads and profit); a key performance indicator-based regime that rewards for outstanding performance and punishes poor performance; and unanimous, best for project, management and decision making and the selection of an integrated owner/contractor team on the basis of best person for each position and avoiding duplication of roles, Rio 2 said.

Alex Black, President and CEO of Rio2, said: “The signing of this ECI agreement with STRACON, a leading mining and civil construction contractor in Latin America, forms a key part of Rio2’s strategy to prepare for next year’s construction phase of our Fenix gold project.

“The Rio2 management team is pleased to work again with STRACON, this time in Chile, and look forward to further optimising the mining and construction solution for the project and finalising contract documentation in readiness for next year’s work program.”

Steve Dixon, Chief Executive Officer of STRACON, said: “The project will be delivered under a collaborative alliance agreement, a framework which has been successfully utilised over the past 10 years at several of STRACON’s projects throughout Latin America.”

Dynamic Drill and Blast looks for further growth with ASX IPO

Specialist drill and blast services supplier, Dynamic Drill and Blast Holdings, is looking for further growth with a plan to raise A$5 million ($3.5 million) and seek admission to the Australian Securities Exchange official list.

The Perth, Western Australia-based company has established itself as a contractor able to supply everything from large production blasts to vibration-sensitive, close-proximity civil work, it said.

Associated with strong and ongoing growth in the mining and civil sectors, Dynamic says it has seen a surge in project opportunities and plans to use funds from the initial public offering (IPO) to grow its fleet and provide working capital to tackle a strong tendering pipeline.

The company was founded in 2011 and, since 2018, has been on a rapid growth path following a strengthening of the balance sheet and the introduction of new strategic investors, including current Executive Director, Matt Freedman, a major shareholder.

Revenue has grown from A$12.97 million in the 2018 financial year to A$19.1 million in the 2019 financial year. Along the way, it has attracted a strong Tier One mining client base, and is undertaking work on projects owned by Rio Tinto, Fortescue Metals Group and Galaxy Resources, it said.

Dynamic says it is currently operating at three West Australian sites, one of which is nearing completion, and has developed a strong pipeline of tendering opportunities.

“Importantly, a number of the tendered opportunities are for medium-to-long term contracts which, if awarded to Dynamic, would enable continued growth of a steady/underlying revenue stream,” the company said.

Dynamic’s management and board comes with proven and diverse skills, according to the company.

Mark Davis, Managing Director of Dynamic, was a founding member and brings over 25 years’ experience in the mining services sector.

Dynamic has also recently appointed Garret Dixon as Non-Executive Chairman. His recent roles include Executive Vice President at Alcoa Corp and President Alcoa Bauxite. He has held previous roles as Executive General Manager for civil construction and contract mining group Henry Walker Eltin Ltd, Managing Director of logistics company Mitchell Corp, and Managing Director and CEO of ASX-listed Gindalbie Metals.

JP Equity Partners has been appointed Lead Manager to the IPO, with the company aiming to hit the ASX boards around August 20.

Davis said the time was right to list on the ASX and the IPO will provide the company with the capital required to secure project opportunities and continue its rapid growth push.

“It has been an exciting period for Dynamic,” he said. “As a founding member, I have seen first-hand the incredible transformation of the business since 2018. We are now preparing ourselves for the next phase of growth.

“The company is well-supported by a Tier One client base, which continues to grow with the pipeline of tendered contracts.

“It’s an exciting time in the Western Australian mining sector with strong market dynamics in both gold and iron ore. At completion of the IPO, Dynamic will be well-positioned to service these growing and important sectors. There is also the potential for strong growth in the civil sector with infrastructure projects coming out of increased government spending, post-COVID-19.”

He added: “I would like to take the time to thank Matt Freedman, who has played a critical role in growing the business to where we stand today and all our employees who contribute on daily basis and are essential to the day to day success of Dynamic.

“I would also like to welcome Garret Dixon as Non-Executive Chairman. To be able to attract someone of Garret’s calibre is a testament to where Dynamic is heading as business.

“Lastly, we could not be here today without out investor base. Over the past 24 months, Dynamic has been fortunate enough to welcome a number of key strategic investors with significant contracting and capital markets experience and I look forward to delivering long-term value to these investors and to the shareholders who join our register, once we hit the ASX boards.”

Capital Drilling bolsters Bonikro gold mine operation with new equipment

Capital Drilling says it has commissioned new equipment to supplement Allied Gold’s existing mining fleet at the Bonikro gold mine, in Côte d’Ivoire, with the two companies currently in the process of implementing an interim mine plan at the operation.

The London-listed company was awarded the mining services contract – the company’s first – back in October 2019.

In Capital Drilling’s December quarter review, it said it had further established personnel and equipment to support the contract over this period and, in December, had commissioned three dozers (Cat D9Rs), one grader and one excavator, together with four production rigs (blast hole and grade control) at the operation.

It said 2020 contract revenues, while being subject to finalisation, were now expected to be around $15 million across the range of site services at Bonikro, compared with the $25-$30 million previously outlined.

The interim mine plan at Bonikro was scheduled to last until December 2020, but a long-term mine plan is expected to be completed in the September quarter, it said. This would allow the company to transition to a “Schedule of Rates contract”.

Bonikro commenced production in 2008 and was previously operated by Newcrest, prior to the sale of its majority interest to a consortium of F&M Gold Resources and the Africa Finance Corp, in December 2017, and the recent acquisition by Allied. It has historically produced over 1 Moz of gold.

On top of this news, Capital Drilling said, in its December quarter, revenue jumped 4.8% quarter-on-quarter to $30.7 million, while its cash flow generation had risen to $4.4 million at the end of the year, compared with $2.5 million at the end of the September quarter. This jump in cash came despite ongoing growth capital expenditure during the three-month period.

The company’s fleet utilisation also rose over the quarter to 59%, compared with 52% in the previous quarter. This is the equal highest utilisation level in four years for the group, driven by new contract start-ups, with most of the new work commencing in West Africa, it said.

Capital expected to spend $20 million on capex in 2020. This follows the addition of eight new rigs and mining equipment in 2019, of which four rigs are due for commissioning this quarter.

PYBAR addressing training needs in underground mining sector

PYBAR says it has gained approval from the Australian Skills Quality Authority (ASQA) for its Registered Training Organisation (RTO), the Australian Institute of Mining (AIM).

AIM was established by PYBAR to address the need for quality, nationally recognised training for the underground mining sector.

AIM will facilitate Certificate II and III in Underground Metalliferous Mining programs as well as numerous short courses, providing significant opportunities for employees, and assisting PYBAR in achieving its goal of offering nationally recognised training for its workforce, the company said.

In addition to the RTO approval, AIM has gained approval from the New South Wales Resources Regulator to offer the one-day ‘Learning from disasters’ course which will be rolled out across NSW from January 2020.

The course, developed by the NSW Department of Planning, Industry and Environment, is designed for mine managers and supervisors, ensuring lessons from past mining disasters are learnt.

As part of the RTO application process, PYBAR conducted a complete review of existing training and assessment packages offered by its Safety, Health, Environment & Training (SHET) team and recommended updates to ensure these packages met the national framework requirements, it said.

In addition, PYBAR consulted with state governments and held discussions with the Tasmanian Government to reduce barriers to traineeships in the underground metalliferous mining sector, according to the company.

As a result, 52 workers from the Henty gold mine, in Tasmania (owned by Diversified Minerals, an associated company of PYBAR Mining Services), are already enrolled in the Certificate III program in Underground Metalliferous Mining.

PYBAR CEO, Brendan Rouse, said: “This approval is a significant step in enabling PYBAR to develop its workforce in line with national standards. It will also ensure that we are able to offer training that is current, relevant, and applicable immediately in the workplace across the full range of roles.”

He added: “The establishment of the Australian Institute of Mining forms part of our commitment to the long-term sustainability of our business, supported by our ability to offer ongoing professional development opportunities for our employees.”

PYBAR SHET Manager, Robert Paterson, said the company’s ability to offer a wide range of training, including the Certificate II and III programs, supported the development of its workforce as well as the regions in which we operate.”

Macmahon moves into “cash flow positive” territory on Newcrest Telfer contract

Macmahon Holdings says it has come to an agreement with Newcrest Mining over the increased rates for its work at the Telfer gold-copper mine, in Western Australia, with the settlement leading to the contract becoming “cash flow positive” over its remaining term.

In June, Macmahon said it had commenced facilitated negotiations with Newcrest regarding pricing for changes to the mine plan and contract program at Telfer following a disagreement between the two parties.

Macmahon first commenced the Telfer life of mine contract in February 2016 and, “despite previously disclosed risks and difficulties associated with the project, achieved an operational turnaround in 2018”, it said. Without a rate increase being agreed by Newcrest or some other form of contract amendment, the mine plan and program changes had a negative impact on Macmahon’s costs and returns from the project, according to the contractor.

Telfer, some 450 km east-south-east of Port Hedland, comprises the Main Dome and West Dome open pits and the Telfer underground mine.

Macmahon CEO and Managing Director, Michael Finnegan, said: “The resolution of this dispute means we can now focus all of our attention on maximising the performance of our existing business, and capitalising on growth opportunities. We have several opportunities in our tender pipeline that we are pursuing from an exclusive or shortlisted position, and I am optimistic about the prospects of winning additional work in Australia and achieving further growth in our profitable operations offshore.”

Macmahon has reiterated its financial year 2020 guidance, with revenue expected to be between A$1.2-$1.3 billion ($829-898 million), and EBIT between A$80-$90 million.

Concor Opencast Mining provides ‘seamless transition’ at Anglo’s Mogalakwena PGM mine

Contractor Concor Opencast Mining says it is helping Anglo American Platinum’s Mogalakwena open-pit platinum group metals (PGM) mine team, in South Africa, boost annual production.

This growth can be attributed to various optimisation efforts on site at the largest open-pit PGM mine in the world, as well as the steady performance of its Zwartfontein pit, which Concor Opencast Mining is in charge of, the contractor said.

The majority of Mogalakwena’s production originates from the Central, North and South pits, supplemented further by the nearby Zwartfontein pit. Together these deposits should deliver on Anglo American Platinum’s record-breaking production target of 1.22 Moz of PGMs for 2019, Concor said.

While the three main production pits are operated by the mine’s personnel, it relies on a contractor for the smaller Zwartfontein pit, which requires an earthmoving fleet suited to its smaller size and production targets. Despite its size, it is an important contributor to Mogalakwena’s annual performance, Concor said.

A year and nine months ago, the pit underwent a significant transition that saw Concor secure the load and haul contract from Anglo’s previous operator.

“Because the mine required a smooth changeover with minimal disruption to production, we took over most of the previous contractor’s fleet, as well as its entire workforce,” Concor Opencast Mining’s Zwartfontein contracts manager, Donald Sisiya, said.

Having completed work at Mogalakwena’s tailings storage facility in the past, Concor Opencast Mining brought to the project not only an existing relationship with the mine but its solid reputation for mining open-pit, hard-rock PGM operations in South Africa, the company said.

Sisaya continued: “Combined with our cost competitive offer, the mine placed its faith in our ability to deliver a seamless transition and then to further optimise production without disrupting day-to-day running during the changeover period.”

Concor Opencast Mining’s agreement at Zwartfontein comprises a three-year load and haul contract, as of December 1, 2017. Over this period, it must move 32.4 Mt of material and, more specifically, 12 Mt of ore and 20 Mt of waste material.

With an effective change management structure in place, Concor Opencast Mining has improved the pit’s production performance, having revised the shift structure for all plus-100 of its employees, the company said.

It has also invested significant capital into upgrading most of the old earthmoving equipment on site which had not been properly maintained, according to Concor.

“We have over recent months added three 130 ton (118 t) excavators to the pit, over and above introducing 10 new 100 t (91 t) trucks as well,” Sisiya states.

Moving forward, Concor Opencast Mining has production targets to meet by the end of the year and Sisiya is confident of achieving these: “Taking over an existing contract while ensuring minimal impact to the employees and the production targets is a success story for the company which highlights our strong capabilities in the open-cast mining space.”

Byrnecut to dig into Orion’s Prieska copper-zinc underground project

Orion Minerals Limited says it has concluded a memorandum of agreement with mining contractor Byrnecut Offshore envisaging an alliancing agreement for underground mine development and production at the Prieska copper-zinc project in the Northern Cape province of South Africa.

The agreement follows the announcement of the grant of the Mining Right for the Prieska copper – zinc mine and, Orion says, “paves the way for Byrnecut to bring the benefit of its experience to the development and operation of the Prieska project which is intended as a global-best practice mechanised mining operation”.

Orion has achieved several milestones in the 16 months since the submission of the Mining Right application, including the announcement of a black economic empowerment (BEE) partnership, the upgrading of the Prieska mineral resource to 30.49 Mt at 1.2% Cu and 3.7% Zn and the completion of the Prieska Bankable Feasibility Study (BFS).

While the Foundation Phase BFS demonstrated strong project economics with a post-tax net present value (8% discount) of A$408 million ($273 million), Orion says it has already identified numerous opportunities to improve on the mining plan set out in the BFS and has commenced work with post-BFS field trials, optimisation and refinement studies.

Key terms of the agreement with Byrnecut are that the parties will seek to enter an alliancing agreement related to underground mining at the Prieska project, whereby Byrnecut will undertake to provide underground mine development and mine production services; commit to promoting local employment and skills transfer in support of transformation of the industry; and commit to collaborating with local BEE enterprises.

Formalising the agreement is one of the key project development milestones that follow the release of the BFS for the establishment of high margin and long-life underground mining operations at the Prieska project. The planned foundation phase of operations would result in the mining and processing of 2.4 Mt/y of run-of mine feed for 10 years, to sell approximately 21,000 t of copper and 70,000 t of zinc as differentiated concentrates each year.

Other post-BFS workstreams in progress to prepare the project for execution include third-party peer reviews of the BFS in preparation for funding discussions, the value engineering of components of the BFS, mine-to-market business plan optimisation using the Whittle Enterprise Optimisation process, pilot-scale water treatment field trials of the water accumulated in the underground excavations and the expedition of the various ancillary licences required to operate a mine. The company said substantial progress is being made in all areas.

Orion’s Managing Director and CEO, Errol Smart, said: “We are delighted to include Byrnecut into the list of partners we will be working with to establish what will be another world-class mine in the Northern Cape.

“Byrnecut has an impressive reputation on the African continent both in terms of their operational proficiency and their approach to skills transfer and harmonious relations with local communities. Their involvement in developing Prieska will be invaluable.”

CIMIC’s UGL adds mining and rail work to roster

CIMIC Group company UGL has been awarded new rail and mining services contracts across Australia that are set to generate combined revenues of around A$260 million ($177 million).

In the mining services sector, UGL has been awarded contracts, of up to three years, to deliver multi-disciplinary services including mechanical and piping, electrical and instrumentation, painting and insulation services, the company said without naming the client.

In the rail sector, UGL has secured additional work from Transport for NSW in operations and maintenance, and manufacturing services as part of its membership of the RailConnect NSW joint venture. In addition, its expertise as a leading manufacturer of locomotives and rolling stock has resulted in a contract to build four new diesel locomotives for Pacific National.

CIMIC Group Chief Executive Officer, Michael Wright, said: “CIMIC Group is Australia’s premier rail and mining services provider. Our end-to-end capability offered through our operating companies enables us to provide seamless, whole-of-life solutions for our infrastructure and resources clients.”

UGL Managing Director, Jason Spears, said: “We are extremely pleased to be recognised as a trusted and established partner to our clients in the rail and mining services sectors.

“These contracts reflect our strong ongoing relationships, and our reputation for the delivery of outcomes focused on safety, quality, technical innovation and expertise, and reliability.”

Centennial Coal looks for efficiency and transparency boost from Icertis platform

Australia mining company, Centennial Coal, has selected the Icertis Contract Management (ICM) cloud-based platform to streamline its contracting process while driving efficiency and transparency across its operations, according to the enterprise contract management firm.

The ICM platform will play a key role in accelerating buy-side contracting, improving Centennial’s compliance and optimising its commercial mining contractors’ on-site performance, according to Icertis.

“Increasing transparency into the contracting process will also improve Centennial’s efficiency by flagging contract expirations and giving the company the ability to properly plan for upcoming projects,” it added.

Centennial’s Group Manager Contracts and Procurement, Colleen Bastow, said: “Employing over 1,600 people and operating five underground mines in New South Wales, we require a contract management solution that helps us to meet our business goal of financial and operational excellence. The ICM platform will equip us with a fully-automated solution for enterprise contract management that turns static contracts into strategic assets.”

According to Icertis, Centennial selected ICM because it offered a standardised platform that seamlessly integrated with its existing systems. “The ICM platform’s scalability and ease of use will also help to accelerate adoption, collaboration and velocity to gain better control of contracting processes.”

Samir Bodas, CEO and Co-founder of Icertis, said: “Icertis has committed to increasing its presence in Australia and New Zealand by expanding our team and offerings to serve our rapidly growing customer list. The region has a large mining presence and we’re thrilled that our dedication to this region has delivered our newest customer, Centennial Coal, a company striving to offer a sustainable approach to mining. The ICM platform enables Centennial to gain full visibility into contract milestones, contractual commitments and obligations – equipping the company with tools to deliver even greater value to its customers.”

Centennial supplies coal to support 40% of New South Wales coal-fired electricity generating capacity alongside a successful export business, according to Icertis.

BGC considering sale of contract mining business

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.