CONTRACT MINING
“Now, we're implementing and installing the
professional hardware, as well as refurbishing
the truck. After that, we will perform some other
tests in the quarry and, simultaneously, talk to
our clients about performing tests inside their
mine sites.”
The truck can be switched from autonomous
to manned-mode at the press of a button,
according to Bartels.
M&A
With this evolution in the contracting space and
demand for mining services on the rise, it is
hardly surprising corporate activity is heating up.
In November, Ausdrill officially took over
Barminco in a deal valuing the latter at A$271.5
million ($195 million) as it looked to become
Australia’s second largest mining services
company.
While Ausdrill has been successful in
expanding its drilling services into West Africa,
Barminco has operated as an underground
contractor across Australia, Egypt and India with
the capability and fleet to provide customised
solutions for longhole, specialist and production
drilling applications.
Production mining services include drilling,
charging and blasting, load and hauling to the
surface. It also offers underground diamond
drilling services including grade control and
orebody definition in all standard core sizes to
depths of 2,000 m.
The two already knew each other well, having
a joint venture in place, African Underground
Mining Services (AUMS).
And, it is not just Australia where M&A has
taken place.
In the Americas, STRACON SA recently
acquired a 60% controlling interest in Dumas
Holdings as the open-pit, Latin America
specialist looked to diversify into the
underground markets in Canada and Mexico.
Dumas specialises in mine construction,
development, production, services and
engineering and was recently awarded a project
at Goldcorp’s Hoyle Pond mine, in Timmins,
Ontario, where it is providing development
mining services as part of an ongoing
exploration programme.
STRACON, meanwhile is a full-service mining
contractor that, in June, signed an open-pit
mining agreement with Guyana Goldfields to
mine the overburden at the company’s Aurora
gold mine in the country.
Still within the Americas, in October, North
American Construction Group agreed to acquire
Aecon’s Contract Mining business for C$199.1
million ($152 million) in cash. This came close to
a year after China’s CCCC International Holding
Ltd announced an agreement to acquire the
whole of Aecon only for it to break down over
six months later as Canadian regulators threw
out the proposal.
Aecon Contract Mining provides overburden
removal and environmental reclamation services
through a dedicated fleet of earth-moving
equipment, primarily in the lucrative Canadian
oil sands market of Fort McMurray; a location
NACG knows well.
Explaining the company’s rationale, Jean-
Louis Servranckx, President and CEO of Aecon,
said the capital-intensive Contract Mining
business was outside of Aecon’s core
construction activities and focus.
NACG recently announced its first term
contract in several years – a two-year extension
to a key Master Services Agreement with a
major oil sands customer. This took the
expiration date to August 2022.
As part of the associated work, the company
would carry out overburden removal,
commencing after the completion of the
previously announced 2018 work. The value of
this backlog was expected to be around C$120
million.
While oil sands growth was key to NACG’s
Aecon acquisition, its deal to buy 49% of Nuna
Logistics Ltd and related companies, was
focused on diversification away from the
sector.
The company paid C$42.5 million in cash to
acquire the stake in the civil construction and
contract mining company based in Edmonton,
Alberta.
Martin Ferron, Chairman and CEO of NACG,
said when the deal was announced: “Nuna’s
revenue is entirely non-oil-sands related and
they are recognised as a leading civil
construction and mine services contractor in
northern Canada, providing a clear strategic fit.”
The deal expands NACG’s coverage into areas
such as base metals, precious metals and
STRACON recently signed an open-pit mining
agreement with Guyana Goldfields to mine the
overburden at the company’s Aurora gold
operation
diamonds, in addition to infrastructure-related
projects involving major earthworks.
Contract wins
Speaking of expansions, U&M’s Commercial
Director Mauricio Casara told IM the contractor
had bolstered its fleet capacity in the past year,
increasing the number of Komatsu haul trucks,
Cat dozers and Cat and Hitachi excavators.
“These additions have increased our installed
earthmoving capacity to just above 450 Mt/y,
compared with 400 Mt/y last year,” he said.
Casara said the company, Brazil’s largest
mining contractor with more than 40 years of
experience in earthworks, mining and material
hauling, had seen a “slight” increase in
demand in the past year for mining services in
Brazil. Demand should step up in the new year
when the recently-elected government makes
clear its economic plans for the country, he
added.
In the past year, the company has been
awarded two new contracts – one at Equinox
Gold’s Aurizona mine and a life of mine contract
at the Tucano gold operation (now owned by
Great Panther Silver). Both operations are in the
northern part of Brazil.
When former Tucano mine owner Beadell
Resources announced the U&M tie-up earlier
this year, it said the volume-based contract
would save it some A$100 million over the life of
mine, while enabling better cost predictability
and a more simplified solution than the previous
contract.
Beadell’s then MD and CEO, Dr Nicole
Adshead-Bell said: “U&M’s Brazilian open-pit
mining expertise, combined with its sizeable
DECEMBER 2018 | International Mining 37