Macmahon Holdings (ASX:MAH) reports it has received a Notice of Award from Talison Lithium Australia for the load and haul mining works at its Greenbushes Lithium Project in Western Australia.
The company says the Greenbushes Project is a ‘major’ supplier of lithium mineral concentrates and the scope of works at the project includes open cut mining activities of load and haul and crusher feed.
Subject to final documentation of certain in-principle agreed terms and signing within 30 days, the contract will commence on 1 July 2023 for a 7-year period, and Macmahon has the option to extend for up to 2 years.
The contract is estimated to generate revenue in excess of $1.1 billion over the initial 7-year term.
Macmahon Holdings CEO and Managing Director Michael Finnegan said the company is delighted to have received the Notice of Award from Talison for load and hauling mining services at the Greenbushes Lithium Project, and looks forward to finalising the contract.
“We very much value the relationship we have forged with Talison Lithium and will continue to build on it. The award of this contract delivers on our commodity diversification strategy into future relevant commodities.
I would also like to thank the Macmahon team for their efforts in achieving this project award which adds to our secured order book and goes a long way to replenishing FY23 secured work run-off.
“This award increases our contract tenure and strengthens the foundations of the business which allows us to further progress our strategy”
This award increases our contract tenure and strengthens the foundations of the business which allows us to further progress our strategy.”
Macmahon reports key mining equipment required for commencement will be deployed from the company’s existing available mining fleet with minimal impact to capital expenditure in FY23, and the maximum remaining capital expenditure required to support this project is spread from FY24 to FY28 and totals around $128 million.
The 5-year spread of this capital spend enables Macmahon to maintain a strong balance sheet and enhance return on average capital employed performance, and the company states a number of opportunities exist to optimise this further.
The Greenbushes Project is located directly south and adjacent to the town of Greenbushes in Western Australia, and Macmahon reports this project is an ‘attractive’ location and has an existing long term and ‘loyal’ workforce with many based in the area.
The company states it is ‘eager’ to engage with the workforce to discuss employment opportunities on the project to build a ‘world-class’ team.
Talison Lithium is a Western Australian based mining company that is 51% owned by a joint venture between Tianqui Lithium Corporation and IGO (ASX:IGO), and is 49% owned by Albemarle Corporation.
It has been producing lithium concentrates at Greenbushes since 1983 which are used in lithium batteries.
Macmahon Holdings is an ASX-listed company offering a package of mining services throughout Australia and Southeast Asia with experience in both surface and underground mining across a range of locations and commodities.
Images: iStock
