THE BOURSE WHISPERER: To paraphrase Mark Twain, it would seem the reports concerning the possible demise of Fortescue Metals Group (ASX: FMG) have been grossly overstated.
The company has signed up Western Australia-based mining contractor Macmahon Holdings (ASX: MAH) to deliver open cut mining services as part of FMG’s Christmas Creek mine expansion.
Mcmahon trumpeted the signing of the contract describing it as the largest single mining contract it has ever landed.
The company has secured a $1.8 billion contract to deliver open cut mining services as part of the Christmas Creek expansion.
According to Macmahon Holdings chief executive officer Ross Carroll the five year contract was significant for the company as it enables it to focus its future on the mining sector.
The contract award brings Macmahon’s mining order book to $3.6 billion, the highest level in the company’s history.
“This is an exciting project that builds on the existing success of our surface mining operations, securing a stronger foundation for the company’s mining focused business over the next five years,” Carroll said in the company’s announcement to the Australian Securities Exchange.
“Macmahon has a long history of successfully delivering mining projects in the Pilbara and this project further expands the company’s presence in the region.”
The project will involve MacMahon in all aspects of mine operations including drill and blast, overburden removal, ore harvesting, maintenance of equipment and associated services.
It will result in the movement of approximately 300 million bank cubic metres of iron ore and associated overburden material.
Since commencing mobilisation to site under a limited notice to proceed, Macmahon has recruited about 600 people for the project, with more than 500 employees already mobilised to site.
Mining activities have commenced, with the development of on-site infrastructure underway and the mining of overburden, harvesting and drilling also in progress.
“Macmahon’s business has been built on developing productive and long term associations with our clients and this contract continues our strong relationship with Fortescue Metals Group,” Carroll said.
“This is a key project for Fortescue and Macmahon is pleased to be supporting their expansion.”