Macmahon wins $75m mining services contract

Welshpool-based Macmahon Holdings Ltd has won a two-year mining works contract at the BHP Billiton Mitsubishi Alliance Saraji coal mine in Queensland, valued at around $75 million.

The news comes just after engineering and construction company Leighton Holdings Ltd doubled its stake in Macmahon to 11.5 per cent, while announcing it had no plans to make a takeover offer for the company.

The full text of a company announcement is pasted below

Macmahon Holdings Limited (ASX:MAH) announced today that BHP Billiton Mitsubishi Alliance (BMA), has awarded Macmahon a contract at the Saraji open cut coal mine in Queensland.

The two year contract is valued at approximately $75 million and involves the removal of 12 million bank cubic metres of material each year.

The Saraji Mine has a current production capacity of 6.5 million tonnes of high grade coking coal a year and is located in the Bowen Basin, 213 kilometres south west of the Hay Point Coal Export Terminal, near Mackay.

Macmahon has commenced mobilisation of the earthmoving equipment and a workforce of 100 personnel, with mining works scheduled to commence this month.

Chief Executive Officer, Nick Bowen, emphasised the significance of this particular coal contract for Macmahon.

"This win demonstrates the success of the company's strategy to pursue coal contracts on the East Coast of Australia. We are now well placed to actively increase our market share in this buoyant sector.

"The contract provides Macmahon with another substantial mining operation and improves the balance within the Group's portfolio across, coal, iron ore, diamonds, nickel, copper and other commodities.

"This is further recognition of the capability Macmahon can bring to an existing operation and it extends the strong relationship we have established with BHP Billiton to now cover coal, as well as iron ore, nickel and copper," he said.

The addition of the Saraji Project to the Mining Business increases the number of open cut and underground mining projects to 18.