Perenti awarded $360m Motheo expansion works contract

African Mining Services (AMS), Perenti’s (ASX:PRN) surface mining business in Africa, has been awarded a $360m contract for open pit mining services at Sandfire Resources’ (ASX:SFR) Motheo copper mine.

Under the 74-month contract (just over six years) AMS will deliver all surface mining services associated with development and production activities at the A4 open pit.

The A4 open pit lies roughly 8km west of the T3 open pit where AMS has progressed from development into production works. Perenti expects A4 pre-production and development work to begin at A4 in September 2023 with pre-strip mining to commence in October 2023.

Both the T3 and A4 open pits are expected to be operated as part of a larger, integrated mining operation, leveraging the resulting benefits of scale and the operational synergies to optimise the return on capital.

Perenti managing director and chief executive Mark Norwell said the company is excited about the opportunity.

“We are excited about the opportunity to expand our partnership with Sandfire Resources,” he said.

“Motheo is a long-life asset in the Kalahari Copper belt, and the expansion of our role here is in keeping with our strategy of disciplined growth within top-tier mining jurisdictions with high quality partners.

“Sandfire is now one of our largest clients and over the term of the combined contracts, the T3 and A4 open pits are expected to generate total revenue of over $1.1b, delivering strong returns for Perenti and its shareholders.”