CONTRACT MINING
fleet, means that U&M is uniquely positioned to
help us move Tucano towards generating free
cash flow and resolving the key issue of material
movement in line with our life-of-mine plan.”
U&M is to provide full mining services –
drilling, load and haul, crusher feed and mining
support services to 2025.
The Aurizona contract, meanwhile, will see
U&M carry out drill and blast, load and haul,
sump dewatering, crusher feed and support
services at the 8,000 t/d mine.
As of the end of September, the Aurizona
project was 80% complete, with more than 4 Mt
of material moved and 270,000 t of ore
stockpiled. Equinox expects to produce an
average of 136,000 oz/y of gold at Aurizona.
Australia boom
Back to Barminco, which has only strengthened
Ausdrill’s business case for buying the
underground contract miner since the acquisition
was first announced in August.
In addition to winning the contract extension
with Independence Group, it has been granted
another four years at Gold Fields’ Agnew mine,
also in Western Australia.
The contract, worth some A$335 million, will
extend its existing underground mining services
and diamond drilling agreements through to
2022, making it 12 years in all that the two
companies have worked together.
It covers underground mining services at
Agnew, including development and production
activities and associated services at the
Waroonga mine, and diamond drilling at both
Waroonga and New Holland.
The company also received a five-year
extension to its contract with AngloGold Ashanti
at the Sunrise Dam operation. Based on the
current mining schedule, this was worth
approximately A$700 million.
Barminco has been working with AngloGold
Ashanti at Sunrise Dam since the
commencement of underground operations in
2003. Plans are now in place to increase annual
production well beyond the current rate of
approximately 3 Mt/y.
The newly consolidated Ausdrill also received
a win in late October when its AUMS subsidiary
was awarded a $375 million underground mining
services contract at one of West Africa’s oldest
mines, Obuasi.
The five-year agreement will see AUMS team
up with Rocksure International, a Ghana-
based mining contractor, under a 70:30 joint
venture.
Obuasi, in Ghana, has been in a limited
operating phase since 2014 but, earlier this year,
AngloGold said it would spend $450-500 million
to redevelop the legendary asset into a modern,
productive mining operation.
38 International Mining | DECEMBER 2018
Winning gold with coal
Many of these contracts are small fry compared
with some of the larger coal services awards in
Australia and elsewhere.
One of these was recently won by MACA at
Wealth Mining’s Bluff coal project in Australia.
The company started work on the asset in the
Bowen Basin of Queensland earlier this year after
being chosen as the main contract miner.
MACA will carry out all open-pit mining
activities including planning, procurement,
management and supervision, load and haul,
drill and blast, and water management at the
project, with the agreement expected to generate
some A$700 million in revenue over the 10-year
mine life.
MACA said the project would allow it to use
larger fleet classes including 350 t excavators
and 220 t and 180 t dump trucks.
CIMIC Group subsidiary Thiess topped that
revenue number in October with an award at
BHP’s Mt Arthur coal operation in the Hunter
Valley of Australia, a region the contractor has
operated in since 1940.
It won a A$1.2 billion, five-year contract to
expand the scope of its operations to include
additional services as mine operator of the
southern end of the coal operations (the
Ayredale and Roxburgh pits). Under the new
agreement, Thiess would perform mine design,
planning and scheduling services, drill and blast
operations, overburden removal and coal mining.
Arguably the largest contract mining market,
Indonesia has been a favourable destination for
Thiess for many years.
Earlier this year, Indonesia's mining ministry
signed amended contracts with all its 68 coal
mining companies, as part of a shift towards a
new mining permit system it expects to boost
government revenue.
While the agreements would see companies
paying 13.5% royalties on sales as a lump sum,
miners will also be able to secure a
continuation of rights to their operations up to
two years before their current contracts expire,
after which they will transfer to special mining
permits.
This tenure security is a positive for those
operating in the Southeast Asia country.
A few months after this deal was signed,
leading contract miner Delta Dunia announced
that its PT Bukit Makmur Mandiri Utama (Buma)
subsidiary had signed a new mining service
contract with an estimated contract value of over
IDR 7 trillion (more than $500 million).
The mining service contract was agreed with
PT Tanah Bumbu Resources, a subsidiary of Geo
Energy Resources Limited, with the mine in
question being adjacent to another Geo Energy
concession area, PT Sungai Danau Jaya, which
Buma has been operating at since 2015.
“The location of the adjacent Tanah Bumbu
and Sungai Lake mines is expected to optimise
operational efficiency in both mine sites,” Buma
said. The operation of Tanah Bumbu commenced
in March, with production taking place earlier
this year.
“This contract is expected to strengthen the
relationship between Buma and Geo Energy,
which is a fast-growing coal mining company
with good growth potential in the future. This
contract is also in line with Buma’s strategy to
always focus on long-term sustainability and
profitable growth,” Buma said.
Exporting expertise
Thiess has been cleaning up across Australia this
year, winning contract extensions at BHP’s Nickel
West operations (Western Australia), OZ
Minerals’ Prominent Hill mine (South Australia),
and QCoal’s Northern Hub and Coronado
Curragh’s Curragh coal mine, both in
Queensland.
Yet, possibly its biggest win was in South
America where it was awarded a A$420 million
contract extension by Antofagasta Minerals
(AMSA) to continue operations at the Encuentro
open pit in northern Chile.
This was significant as the original 2015 AMSA
contract was Thiess’ first in South America.
As part of the extension, the company will
continue to provide mining services for another
four years with works comprised of drilling, load
and haul, mobile equipment maintenance and
mine services.
Douglas Thompson, CIMIC Group Executive
Mining and Mineral Processing and Thiess
Managing Director, said: “Since commencing
operations in 2015, we have moved over 70
million cubic metres; a first for Thiess in South
America.”
Planned future improvements at the mine
include investment in maintenance
infrastructure, a fleet management system and
transfer to Thiess of short-term mine planning
responsibilities, CIMIC said.
A little further out into the future, Byrnecut’s
Offshore division recently signed a
memorandum of understanding with Ironbark
Zinc that could see the contractor mine, model
underground mine costs and supply the fleet for
the Citronen zinc-lead project, in northern
Greenland.
Ironbark said the Byrnecut agreement provides
it with “extensive international experience in
underground hard-rock mechanised mining” for
the planned 3.3 Mt/y project.
Byrnecut’s knowledge of the skills necessary
to overcome remote location logistics, language
barriers and upskilling the national workforce
were key considerations for its selection,
Ironbark said. IM