​More job cuts on the horizon for Macmahon

In the wake of major contract losses and a depressed mining market, Macmahon has been slated to carry out more job cuts

The contractor is expected to cut a currently unknown number of jobs as part of its wider review, The West reports.

The company has had a turbulent six months, as the mining industry contracts and levels of work decline.

January saw the sudden departure of long term managing director Ross Carroll and deputy chairman Barry Cusack.

Then in February it lost a major $260 million contract at Fortescue’s Christmas Creek operation after FMG consolidated two separate contracts into one, awarding the single contract to rival Downer EDI.

This put around 700 jobs at risk, and followed on from the company cutting 40 jobs at the same site the previous week.

However in a turn in fortune for the workers Downer did announce it was would be retaining around 400 staff from the existing Macmahon workforce on site.

In December Macmahon also cut around 40 jobs from its workshop at Perth airport.

In the background of these local shakeups, the contractor was also embroiled in a dispute in Mongolia regarding more than US$20 million in overdue payments at Erdenes Tavan Tolgoi coal mine, which resulted in a total work standstill.

The major contract loss and Carroll’s departure prompted Macmahon to carry out a review and restructure of the business, with Macmahon’s executive chairman Jim Walker at the time stating: “We have already begun the process of resizing the business, including consolidating our Perth offices and reducing overheads.”

Macmahon also faced the prospect of paying back a three year Syndicated Facility Agreement of $317.5 million with nine lenders, who have spent the last 90 days reassessing the loan.

At present Macmahon reported having $159 million drawn with $8.9 million worth of outstanding bank guarantees.

If any lenders choose to withdraw from the facility, Macmahon will have another 60 days to repay that portion.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.