St Barbara replaces Gwalia contractor

Victoria’s St Barbara has appointed Macmahon Holdings as the new mining contractor for its Gwalia operations near Leonora under a $500 million agreement.

St Barbara said the five-year contract, which includes a three-year extension option, was expected to improve underground mining performance and productivity at Gwalia while reducing operating costs.

Gwalia is one of Australia’s oldest underground goldmines, with St Barbara having operated the asset for the past 15 years.

Macmahon, replacing fellow Perth Airport-based contractor Byrnecut, will provide all underground mining services to Gwalia including mine development, ground support, producing drilling and blasting, loading and trucking, shotcreting and paste fill reticulation.

The contracted work requires about $40 million in capital expenditure over the 2021 and 2022 financial years, Macmahon says.

The business will begin early works at Gwalia in April after formalising its agreement with St Barbara, expected in March.

St Barbara managing director Craig Jetson said Macmahon’s appointment would unlock Gwalia’s potential and instill a performance-led culture.

He thanked Byrnecut for its seven years’ worth of services to Gwalia.

“This change is indicative of St Barbara’s determination to enliven Gwalia’s future, to safely and sustainably rebuild operational performance and to secure future investment by delivering predictable and strong financial returns,” Mr Jetson said.

He said St Barbara was confident the Macmahon partnership would also boost employee safety and wellbeing.

“We look forward to initiating a seamless transition period over the coming weeks,” he said.

Macmahon chief executive Michael Finnegan said the contract would help the business diversify and expand its underground division.

Its shares were down 3.6 per cent at 2:04pm AEDT to trade at 21 cents while St Barbara was up 1.3 per cent to $2.01.