The dotted line: The biggest contracts of 2021

contracts

After another big year in the resources industry, Australian Mining looks back at some of the most significant contracts to take place in 2021.

BHP sells QLD coal mines to Stanmore for $1.8bn

BHP sold its 80 per cent share in BHP Mitsui Coal (BMC) to Stanmore Resources, offloading two Queensland coal mines and associated infrastructure.

The Poitrel and South Walker Creek metallurgical coal mines have a combined production of about 10 million tonnes per annum and marketable reserves of more than 135 million tonnes.

BHP Minerals Australia president Edgar Basto said the deal continued the company’s transition from large carbon emitting operations.

“This transaction is consistent with BHP’s strategy, delivers value for our company and shareholders and provides certainty for BMC’s workforce and the local community,” Basto said.

“South Walker Creek and Poitrel are well-run assets that have been an important part of our portfolio for many years, and we are grateful for their contribution to BHP.”

Coronado ties NRW at Curragh until 2026

A letter of intent (LOI) between Coronado Global Resources and NRW Holdings outlined a five-year contract worth about $1 billion at Curragh coal mine in Queensland.

NRW’s existing contract was due to end in September 2021, but the LOI in August pushed this out to 2026.

The new arrangement is expected to see Golding spend up to $46 million on equipment, while continuing to employ around 500 people at Curragh.

NRW chief executive officer and managing director Jules Pemberton said he had every intention to maintain the strong relationship.

“This agreement maintains the relationship Golding has established at Curragh mine since 2014 and reflects our continued ability to support our client’s mine plans,” Pemberton said.

Mastermyne books hit $1bn with Gregory Crinum contract

Sojitz Blue awarded Mastermyne a $660 million mining services contract in May 2021 at the Gregory Crinum coal mine in central Queensland.

The seven-years contract included six months of mine re-establishment, before ramping up for the remaining six and a half years.

The contract more than doubled Mastermyne’s order book, lifting it to $1.1 billion in the 2021 financial year.

Mastermyne chief executive officer Tony Caruso said it will be the platform for the company’s transformation.

“The execution of our first whole of mine operations contract is a major milestone for Mastermyne and is significant in transitioning the business into a commercial model that is not only complimentary to the existing contracting model, but will provide an even greater level of earnings certainty over the long term,” Caruso said.

Thiess wins $920m Mount Pleasant contract extension

MACH Energy awarded Thiess a four-and-a-half-year contract extension at the Mount Pleasant coal mine in New South Wales, tying the mining services contractor to the site until 2026.

The companies have worked together since 2017, with the $920 million contract only solidifying this relationship.

“Thiess has provided expert planning and optimum mine sequencing to deliver exceptional outcomes for our client,” Thiess chief executive officer and executive chairman Michael Wright said.

“We’re pleased to continue to drive long-term social, environmental and economic value for the Upper Hunter region.”

Thiess’ renewed duties at the mining site will see them continue to provide full-scope mining services including drill and blast, overburden removal, coal mining services and rehabilitation.

IGO sells Tropicana stake to Regis for $903m

In acquisitions, Regis Resources and IGO made one of the largest of headlines for 2021, with the former paying $903 million to purchase the latter’s 30 per cent stake in the Tropicana gold mine in Western Australia.

The Tropicana joint venture is a 30/70 split with AngloGold Ashanti.

IGO stated that the $903 million from Regis will allow the company to continue focussing on battery minerals for clean technology – a statement backed up by first lithium at its Kwinana lithium hydroxide refinery.

“This transaction, along with the recent investment in Tianqi Lithium assets in Australia, solidifies IGO’s position of becoming a globally relevant pure-play battery minerals producer and developer, uniquely exposed to Tier 1 nickel, copper, cobalt and lithium,” said IGO managing director and chief executive Peter Bradford.

Tropicana is one of the highest producing gold mines in Australia, producing 463,000 ounces in the 2020 financial year.

Regis managing director and chief executive officer Jim Beyer said the acquisition would provide great opportunities for the company.

“This is a genuinely transformational transaction for Regis and one that delivers on our strategic objectives to grow as a safe, responsible, reliable, long-life, low-cost gold producer, generating strong financial returns,” he said.

 

Honourable mentions:

Macmahon welcomes $600m in mine cutbacks

Macmahon welcomed the commissioning of significant bodies of work in 2021, as both the Tropicana and Telfer gold mines undergo mine altering cutbacks.

Fortescue sets record with mining services contract

Fortescue Metals Group and members of the Wintawari Guruma Aboriginal Corporation have partnered to develop new mines at Fortescue’s Solomon Hub operations in Western Australia.

NRW’s Primero wins $290 million contract at Mt Holland

NRW Holdings’ wholly-owned subsidiary Primero Group has been awarded an engineering, procurement and construction (EPC) contract at Covalent Lithium’s Mt Holland concentrator project in Western Australia.

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