Civil construction and mining services company Brierty will resume work at Rio Tinto’s Western Turner Syncline Stage 2 (WTS2) iron ore project after the contract was suspended in June.
Brierty was awarded a $300 million, four-and-a-half-year mining and civil works contract for the greenfields project in 2014.
However, the contract was suspended last month and Brierty had 14 days to respond to Rio’s default notice.
Restarting mining at the project will lead to a drawdown of a $6 million facility with Bankwest, which depended on Rio accepting Brierty’s rectification plan and the contractor resolving the issues outlined in the default notice.
The new bank facility provides Brierty with an additional $6 million in funding and a restructure of its debt by establishing a new, long-term debt facility.
“With our main project back on foot and a significantly better working capital position, we can focus on safely and efficiently delivering our existing projects, as well as pursuing additional opportunities to add to our order book,” Brierty chairman Dalton Gooding said.
“Plus the lower ongoing interest costs associated with out new capital structure will also enhance our cash generation and profitability.”
The WTS2 project is around 12km east of Rio’s Western Turner Syncline Stage 1 project. It is expected to produce around seven million tonnes per annum of ore over 4.5 years.