Macmahon Holdings will remain in a trading halt on the Australian Securities Exchange (ASX) in anticipation of an announcement about its contract dispute with Newcrest Mining.
The Perth-based contractor was seeking Newcrest’s agreement to proceed to litigation over work rates at the Telfer project in Western Australia earlier this month.
Negotiations between the two companies remain ongoing, with Macmahon not yet in a position to make an announcement, according to its ASX statement.
The contractor requested a trading halt on Monday and today requested that the suspension be extended. Macmahon expects to release an update before trading begins on Thursday August 29.
“Macmahon is not aware of any reason why the voluntary suspension should not be granted, nor any other information necessary to inform the market about the voluntary suspension,” the company stated.
The contractor planned to bypass the mediation process that usually precedes litigation in place of its past negotiations with Newcrest.
It is pursuing increased contract rates to recover the additional cost of operating under changed conditions, including volume changes and manner and sequence of mining required.
Macmahon has flagged a provision in the order of $25–35 million to cover the costs of continuing the contract.
“We are disappointed we have got to this point, particularly after such extensive discussions to seek to agree an outcome,” Macmahon chief executive Michael Finnegan said earlier this month.
“While it is unfortunate we could not agree an acceptable resolution with Newcrest, we remain confident in our position and optimistic the dispute process will ultimately result in an improved outcome for Macmahon.”