North American Construction Group bags $375m mining contract with MacKellar Group

North American Construction Group Ltd. (NACG) has announced a significant five-year contract award to the MacKellar Group (“MacKellar”) from an established client, a leading metallurgical coal producer based in Queensland, Australia. This development marks a major expansion in NACG’s operational footprint and underscores the robust demand for mining equipment in the region.

Contract Details and Financial Impact

The new contract, which extends until September 30, 2029, transitions an existing dry rental fleet into a fully maintained fleet. This shift is projected to yield a total contract value of approximately $375 million. The scope of the agreement includes comprehensive equipment maintenance and related services, with full ramp-up expected by mid-2025.

To support the increased operational demands, MacKellar will invest between $50 and $55 million in additional growth capital. This investment will fund the establishment of an on-site maintenance facility and the acquisition of twenty new equipment units, planned for purchase and construction primarily in the fourth quarter of 2024.

Statements from Leadership

Joe Lambert, President and CEO of North American Construction Group Ltd., expressed gratitude towards their client and highlighted the significance of the contract. “We thank this long-term client for their trust and confidence in us and are committed to being their preferred, safe, low-cost contractor for decades to come,” Lambert stated. He further emphasized that about one-third of the incremental fleet will be sourced from Canada, showcasing the collaboration and efficiency of NACG’s teams.

“This is now the second significant award of a long-term mining contract in 2024 in Australia,” Lambert added, noting the strong equipment demand in the region. The contract brings NACG’s total contractual backlog to over $3.0 billion, reinforcing the stability and consistency necessary for efficient operations.

Market Implications

This agreement highlights MacKellar’s strong client relationships and the value proposition of NACG’s Australian team and fleet. It reflects a growing trend in the Australian mining sector, where high equipment demand continues to drive substantial long-term contract awards.