Downer wins Blackwater coal contract

Downer has been awarded two contracts worth $225 million at BMA’s Blackwater coal mine.

One of the contracts, valued at $150 million, is a two year agreement for mining and maintenance services, with an additional one year option.

The scope of the work includes load an haul of pre-strip material using equipment and plant already on site, as well as maintenance of said equipment and machinery.

Downer’s second contract on the site, worth $75 million, is for blasting services.

Set to run over three years, work includes management and provision of drilling and blasting services, as well as partial down-the-hole loading services.

Dates for the commencement of work are yet to be finalised.

While the contract is a win for a Downer, concerns have been raised over what it means for the 306 current employees on site.

BMA asset president, Rag Udd, said the service contracts were essential in ensuring the best prospect of Blackwater Mine continuing to operate in a commercially viable way, to provide ongoing employment opportunities.

"Despite extensive work over the past three years to reset our costs and to safely improve the productivity at each of our mines, further deterioration of global metallurgical coal prices means that we must continue to find ways to safely improve our operational performance,"  Udd said.

"The contractual arrangements we are announcing today enable us to bring in dedicated services with performance guarantees to ensure our Blackwater mine can safely make further productivity improvements by meeting global benchmark targets."

Udd added that the Downer contract will create some uncertainty for workers, and that the miner will consult with employees on the future, which may include redeployment.

"As we implement the decision announced today, BMA will continue to work closely with employees and the local community to manage the impacts of the decision and provide regular updates about the consultation process," Udd said.

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