Fleetwood, Rio Tinto in $120m Karratha deal

Accommodation developer Fleetwood Australia will provide Rio Tinto with up to $120 million worth of additional rooms at its accommodation village in Karratha. 

In July last year, Fleetwood and Rio signed a contract valued at up to $70 million for the provision of 250 rooms at the Searipple Village in Karratha, with an option for the miner to aquire additional rooms. 

In a statement on the ASX today, Fleetwood confirmed that Rio had elected to book the additional rooms on a take-or-pay basis, with a rebate provided if the rooms are not occupied. 

Fleetwood said the provision of additional rooms was expected to generate between $100 million and $120 million in revenue over the next three years.

Owned and operated by Fleetwood, the Searipple Village is a modular accommodation village with about 1,300 rooms catering to workforces in the resources and construction sectors.

It currently houses workers from Woodside’s North West Shelf project, Citic Pacific's developments and the Yara Pilbara's fertiliser plant, alongside Rio’s workforce in the area.

“We are delighted to continue our longstanding working relationship with Rio Tinto and facilitate its additional workforce at our Searipple Village in Karratha,” Fleetwood managing director Bruce Nicholson said.

“These additional rooms will only strengthen the utilization of our Searipple Village over the next four years.”

The announcement sent Fleetwood's shares up 10.77 per cent to trade at $2.16 at 12.04PM AEST.