Stronger balance sheets and AI-led supply chain efficiencies are reshaping the Australian mining contracting sector and improving supply chain integrity.
Grant Thornton Australia’s latest report, ‘Turning financial strength into growth’, analyses the FY26 results of a sample of five ASX-listed mining contractors. It highlights that contractors are moving beyond balance sheet repair and increasingly pursuing growth, diversification, and longer-term value creation.
The report identifies supportive gold and copper markets, resilient iron ore activity, and an improving coal outlook as key drivers of demand for their services.
Contractors are also expanding into engineering, processing, maintenance, civil infrastructure, and technology as they seek to capture more of the mining value chain and improve earnings quality.
Financial performance was positive but varied. Capital efficiency increased to 4.1 times in FY26 from 3.5 times in the previous financial year, according to Grant Thornton.
Meanwhile, the sampled companies reduced aggregate net debt by $411 million during the year.
Profitability softening
The report also highlights that profitability softened, with return on equity easing to 9.7% from 10.2%.
Work-in-hand relative to revenue declined by 14%. This underlines the importance of disciplined capital deployment and converting growth opportunities into sustainable returns.
Grant Thornton reports that strong integrity frameworks are becoming a competitive advantage.
AI-enabled forensic analysis can review large volumes of contracts, invoices, payments, and supplier data to identify unusual transactions, potential overbilling, undisclosed relationships, and other integrity risks.
Combined with experienced forensic judgement, this can give mining clients greater confidence in a contractor’s integrity controls, strengthen bids, and ultimately help contractors win work.
Will Kendall, principal and national head of mining and mining services at Grant Thornton Australia, says stronger financial positions create opportunities for contractors, but capital allocation remains critical.
“Mining contractors have greater financial capacity to pursue acquisitions, expand their capabilities and participate more directly in project development,” Kendall says.
“The challenge now is to deploy that capital selectively and convert growth into stronger, sustainable returns.
“The strongest contractors will be those that balance growth with disciplined capital allocation, portfolio quality, and credible oversight of increasingly complex supply chains.”
Grant Thornton is an Australian professional services firm providing audit, tax, and advisory services to a diverse range of clients.
Write to Aaliyah Rogan at Mining.com.au
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