Macmahon has extended its work stoppage standstill in Mongolia until early November.
Last month Macmahon and its subsidiaries announced a work standstill over disputes relating to overdue payments running to more than US$20 million at Erdenes Tavan Tolgoi’s (ETT) Tavan Tolgoi mine.
Now Macmahon has extended the standstill to 3 November.
According to the contractor “the extension of the standstill has been agreed to allow the parties more time to advance efforts to resolve the matters in dispute”.
“As part of these efforts Macmahon’s Mongolian subsidiary is in constructive discussions with ETT to renegotiate the existing mining services contract.
“At this point there is no certainty that these efforts will result in an agreed outcome; however for the time being, the judgement of the company is that further discussions should occur before other options such as international arbitration are pursued,” it said in a company statement.
Macmahon stated that the contract, prior to the breakdown in relations, was forecast to contribute around $100 million to its FY15 revenue, and “as an international project was expected to generate higher margins than revenue from domestic [Australian] projects”.
Negotiations continue.