BGC Contracting has secured a five-year contract worth more than $720 million for Arrium’s Iron Knob and South Middleback Ranges iron ore projects near Whyalla in South Australia.
Arrium administrators KordaMentha confirmed that BGC’s current mining contract, which was to be completed this year, will instead be replaced by this new contract until 2022.
BGC will provide a range of mining services under the new contract including drilling, blasting, hauling, loading, dumping and train load-out.
BGC CEO Greg Heylen said the contract reflected the strong partnership the company has had with Arrium over the past four years.
He added that BGC’s strengths were in it being privately owned and vertically integrated, which allowed it to adapt to changes in the market.
“This has been a challenging time for the mining sector as it dealt with the decline in the commodities markets in the short term,” Heylen said.
“BGC Contracting’s breadth and vertical integration of services has enabled us to improve efficiencies on the project, which has resulted in lower cash costs for Arrium and the administrators.
“During this time we have continued to meet Arrium’s safety and production targets and we look forward to continuing our work with Arrium’s team in the future.”
Heylen also said he looked forward to providing more certain employment for workers and subcontractors in the Whyalla region.
Arrium Mining executive general manager Matt Reed said the collaboration provided benefits for both companies, with BGC playing a major role in helping Arrium lower its mining costs.
“We look forward to developing this partnership with BGC over the coming years and continuing to reduce our costs as we create a world-class business,” Reed said.