Macmahon Reappointed for Mining Services at Dawson South
Macmahon Reappointed for Mining Services at Dawson South

Macmahon Reappointed for Mining Services at Dawson South

  • 04-Jul-2024 11:41 PM
  • Journalist: Patrick Knight

Macmahon Holdings Limited announced its renewed contract as the mining contractor for the Dawson South project in Queensland. Located within the Dawson Mine, an essential open-cut coal operation situated 180km west of Gladstone, this project holds significant strategic importance for Macmahon. The reappointment underscores Macmahon's capability and commitment to delivering essential mining services efficiently. This continuity not only strengthens Macmahon's operational footprint but also reinforces its role in supporting the ongoing success and sustainability of the Dawson Mine, aligning closely with the company's broader strategic objectives in the mining sector.

The Dawson South project, situated in Queensland, is integral to the operations of the Dawson Mine, an open-cut coal mine located 180km west of Gladstone. Macmahon, the existing mining contractor, will maintain its role at the Dawson South project, delivering open-cut mining services. This includes load and haul operations as well as equipment maintenance, utilizing Macmahon's current workforce.

Effective from 1 July 2024, the new contract extends for up to three years. It is expected to contribute approximately $130 million annually to Macmahon’s secured order book. This agreement reinforces Macmahon's strategic position in the mining sector, enhancing operational continuity and financial stability through expanded contract value.

The capital expenditure and intensity for this project in the upcoming term have been notably reduced due to the sale of Macmahon’s Dawson South equipment fleet earlier this year. This fleet will remain operational for the project, leveraging efficiencies from the transaction. Macmahon disclosed this asset sale to the market on April 12, 2024, in its ASX announcement titled ‘Macmahon Executes Dawson South Equipment Sale Agreement’.

Macmahon is steadfast in its strategic pursuit of bolstering cash-backed earnings and optimizing return on average capital employed. The company takes pride in having effectively tailored a solution that not only meets but exceeds the client’s expectations, aligning seamlessly with Macmahon’s overarching strategy. This accomplishment underscores Macmahon’s capacity to deliver value-added services while maintaining a focus on operational excellence and financial sustainability. By consistently achieving these goals, Macmahon strengthens its position as a reliable partner in the mining and construction sectors.

Michael Finnegan, CEO and Managing Director, expressed satisfaction with Macmahon's reappointment as the mining contractor for the Dawson South project. Highlighting the strong client relationship established over time, Finnegan noted that Macmahon has sold a significant portion of the Dawson South equipment fleet, which will continue to support operations at the mine. He highlighted that the revised contract framework enhances client

benefits while aligning with Macmahon's capital-efficient strategy and improving Return on Average Capital Employed (ROACE). Finnegan also acknowledged the collaborative effort of the Macmahon team and Dawson Mine in delivering this solution, underscoring their commitment to operational excellence and client satisfaction.

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