Macmahon reappointed Dawson South mining contractor

Macmahon (ASX: MAH) has been reappointed as the mining contractor at Anglo American’s Dawson South project in Queensland.

The Dawson South project forms part of the Dawson Mine, a large open cut metallurgical and export thermal coal mine as well as one of Australia’s longest established coal mines.

Macmahon will continue to provide open cut mining services using its current workforce, including load and haul, and equipment maintenance.

The spending requirements and capital intensity for this work are significantly lower following the sale of Macmahon’s Dawson South equipment fleet earlier this year.

While an exact figure wasn’t announced, the equipment was sold at market rates which were at or above book value, for cash consideration which is expected to result in net cash inflows of around $44m.

Macmahon chief executive and managing director Michael Finnegan says the company is delighted with the reappointment.

“We are delighted to be reappointed as mining contractor for the Dawson South project where we have worked to build an excellent relationship with our client,” he said.

“Macmahon recently sold a substantial portion of the Dawson South equipment fleet which will continue to be used at the mine.

“I would like to thank the Macmahon team that has worked closely with Dawson Mine to deliver this solution.”

The new contract begins on July 1, 2024 and runs for a three-year period, adding around $130m every year to Macmahon’s order book.