Downer awarded Roy Hill mining contract

Downer EDI has been awarded a 4.5 year contract for mining services at the Roy Hill iron ore mine.

Under this contract Downer will provide pre-strip and supplementary mining activity over the initial years while Roy Hill itself will undertake the actual mining on an owner-operator basis.

The contract will be executed by the end of November.

Valued at $500 million, work the on the contract will start early next year with infrastructure construction before moving to full-scale mining in the second half of 2014.

Downer will also provide drill and blast as well as load and haul of overburden and ore.

The project will use a fleet of 18 haul trucks and two excavators, and employ more than 200 people.

The contractor said it will need around $110 in capital – $40 million of will be spent on new equipment with $70 million provided from existing equipment.

Grant Fenn, Downer’s CEO, welcomed the new contract.

NRW Holdings won a $620 million contract for the mine’s rail earthworks, while Forge Group is part of a joint venture that won a $1.47 billion contract for EPC works at the site.

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