OZ Minerals awards $660m Carrapateena contract to Downer

Core samples at Carrapateena. Image: OZ Minerals.

Downer EDI will deliver underground mining services at OZ Minerals’ Carrapateena copper-gold project in South Australia after being awarded a $660 million contract at the operation.

The six-and-a-half-year contract will start from the beginning of the 2019 financial year. Downer will mobilise at the $916 million development this week, initiating a 10-week transition period where the mining services company will assume responsibility for the underground operations from incumbent contractor, Pybar.

Downer, with joint venture partner Ausenco, was also awarded a $312 million engineering, procurement and construction (EPC) contract at Carrapateena last December.

The underground mining services contract will see Downer deliver site setup and development to the top of the ore body and infrastructure excavation, production setup and ramp up, and bedding in steady-state operations at nameplate site capacity.

Downer chief executive officer Grant Fenn said the company was pleased to be expanding its relationship with OZ at Carrapateena.

“This new contract is an excellent example of the breadth of services we can offer to customers in the mining and resources sector,” Fenn said.

OZ has worked with contractor Pybar on the underground development to this point. In July 2016, Pybar was awarded a $65 million contract to build the Carrapateena decline for OZ.

“Downer and Pybar will work together during the transition period to facilitate development continuity and employee support and opportunities,” OZ said in an ASX announcement.

OZ approved development of Carrapateena, about 160km north of Port Augusta, last August. Carrapateena has been forecast to average annual production of 65,000t of copper and 67,000oz of gold over a 20-year mine life.

The project is scheduled for commissioning by fourth quarter 2019 and is expected to create around 1000 jobs during construction.

OZ also released its latest quarterly report today, with further updates on the Carrapateena development.