Macmahon wins contract extension at Byerwen coking coal mine in Queensland

Australia mining services provider Macmahon has secured an expansion and three-year extension of its work at the Byerwen coking coal mine in the Bowen Basin in Queensland.

Macmahon has been responsible for delivering open cut mining services at the Byerwen coal mine ever since it was established in November 2017. The coking coal mine is owned by Byerwen Coal, a joint venture between QCoal Group and JFE Steel, a Japanese steel manufacturer.

According to the company, the new contract considerably expands production to 10 million tonnes of hard coking coal per year, and applies from 1 June 2020 until 1 November 2023.

Christopher Wallin – QCoal Group Managing Director said: “The development of the Byerwen project is a great success story for the industry, with the mine now emerging as a very low cost producer of hard coking coal. I am very proud that this expansion will enable us to further contribute to the Queensland economy with additional local employment and opportunities for regional communities.”

Macmahon wins contract extension at Byerwen coking coal mine in Queensland. Photo courtesy of nettetal10 from Pixabay.

Macmahon said that the expected revenue over the contract period will be $700 million, with full capacity likely from July 2020. The mining services provider said that there is also an option to extend the contract for an additional two years after this period. If the option is exercised, revenue from the contract could surpass $1 billion, said the Australia mining services provider.

The company said that the expansion will involve capital expenditure of AUD 16 million on ancillary equipment. The company said that it has also procured a couple of additional 800 tonne hydraulic excavators for the project worth AUD 37 million, however, the machines are said to be subject to a put and call option with Byerwen Coal, and therefore are not recognized on its balance sheet.

Michael Finnegan – Macmahon CEO and MD said: “We are very pleased to have secured this expansion and extension at Byerwen, which is one of our cornerstone projects in Australia. Byerwen Coal is an excellent partner and the project has been very successful since its inception. We look forward to continuing to work with our client on the development of this premium asset.”