Mining West buy a ‘turning point’ for MACA

Iluka

MACA has completed its $175 million purchase of Downer’s Mining West business, while the sale of the Bluff coal mine to Bowen Coking Coal was also completed.

After agreeing to buy Mining West in February 2021, MACA handed Downer an initial $109 million and committed a further $66 million in monthly $5.5 million instalments to cover the balance.

This final $5.5 million parcel has now been received and MACA chief executive officer Mike Sutton remains pleased with the deal almost one year later.

“With the completion of the deferred payments we expect to see a turning point for free cash flow generation within the MACA business,” Sutton said.

“The Mining West acquisition provided the opportunity for MACA to be selected by Roy Hill to deliver the mining services at the Roy Hill iron ore project and continue the relationship that started with the first mining at Roy Hill in 2014.”

MACA will now relocate its existing fleet to the Roy Hill site in Western Australia to begin mining in February.

“Many exciting opportunities have opened for MACA through the Mining West acquisition, and we expect other contract awards to follow,” Sutton added.

The Roy Hill contract provided just one example of this in December, as the $70 million deal pushed MACA’s order book past the $3 billion mark.

The Mining West takeover also came with four ongoing contracts in Western Australia.

These included with Fortescue Metals Group (Eliwana iron ore mine and rail project), Citic Pacific (Sino iron project), Ansteel (Karara iron ore joint venture project) and Gold Fields and Gold Road Resources (Gruyere joint venture project).

In February last year, as the acquisition was announced, Sutton said the company welcomed more than 96 per cent of the Mining West workforce, who would also transition to an employment with MACA.

“The acquisition of the Mining West business will provide MACA with a very meaningful addition of a large-scale mining fleet that is currently engaged four long-life projects, all with quality customers that are well known to me and other key members of MACA’s management team,” Sutton said.

The sale of the Bluff coal mine in Queensland was complete with receipt of $9.6 million in cash, bonds and shared from Bowen Coking Coal to MACA.

The deal will also see MACA receive $US2 ($2.78) per tonne when the mine’s coal is sold above $120 per tonne, capped at $10 million.

An uncapped royalty will also be received at $5 per tonne when prices exceed $150 per tonne.

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