After a tough year, mining contractor Leighton Holdings has secured its largest ever single contract with Fortescue Metals Group awarding a $2.8 billion contract to the company.
The deal is for the development of Fortescue’s Kings deposit at the Solomon Hub in Western Australia, adding $1.3 billion work of work to Leighton’s existing $1.5 billion contract awarded in September to mine the Firetail deposit.
“This award is an indication of our strong relationship with Fortescue and our ability to meet the challenges of the project during the ramp up to this phase,” Leighton managing director Craig Laslett said.
The contract includes operating and maintaining the open cut mining fleet, mine planning, ore processing facilities, and infrastructure development including the airport and accommodation.
The Solomon Hub, located about 60 kilometres north of Tom Price, will produce about 60 million tonnes of iron ore each year from the Kings and Firetail deposits.
It is also estimated the mines will employ more than 1,000 people.
Fortescue officially opened its Firetail mine in May, and expect it will deliver 20 million tonnes of iron ore per annum.
Kings remains under construction but the company today said it is due to come online in the next couple of months.
“We’re pleased with Leighton Contractors’ performance at Firetail and we’re delighted to award them the contract at Kings,” Fortescue CEO Nev Power said.
In April Australian Mining reported Leighton lost a major BHP Billiton Mitsubishi Alliance contract, said to be worth $260 million over the next two years.
BMA replaced the contractor with smaller company HSE Mining at its Peak Downs coal mine in Queensland.
But Leighton said in May it is unfazed by the effects of mining services companies downgrading profit forecasts.
Leighton chief executive Hamish Tyrwhitt said iron ore and coal contracts comprised only five per cent of the company’s profits and predicted this would remain in the future.