Macmahon extends negotiation deadline

Mining contractor Macmahon Holdings has again extended talks with Mongolian government-owned coal miner Erdenes Tavan Tolgoi around $30 million it is owed in overdue payments.

It is the second time the West Perth-based company has extended a standstill agreement with ETT, after a similar decision was made earlier this month.

Macmahon said it was attempting to renegotiate its existing mine services contract, which is due to end in 2017, but it was not certain the negotiation would be successful.

In the event the contract is terminated, ETT is obligated to purchase plant, property and equipment from Macmahon for $48 million, but the project was forecast to contribute revenue of $100 million for Macmahon in this year alone.

Macmahon has also raised the spectre of international arbitration.

The pit at Tavan Tolgoi is one of the world’s most significant, with over a billion metric tons of coal reserves.

The Mongolian government has been in a similar dispute with Rio Tinto at its Oyu Tolgoi copper mine.

Macmahon was up 1 per cent to 10 cents per share at the close.