Macmahon’s capital expenditure (capex) for the Dawson South project is expected to be considerably lower. Credit: Khusen Rustamov/Pixabay.

Macmahon has secured a contract to provide mining services for the Dawson South project, part of the Dawson Mine in Queensland, Australia.

Under the reappointment, the company will maintain its role in providing open-cut mining services including load and haul, and equipment maintenance.

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Effective from 1 July 2024, the new contract has a period of up to three years.

Macmahon expects the new contract to contribute nearly A$130m ($86.7m) annually to its secured order book.

The company was initially awarded a three-year A$200m ($133.5m) surface mining contract by Anglo American in July 2021.

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Macmahon’s capex for the Dawson South project is expected to be considerably lower due to the prior sale of its equipment fleet.

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The sold assets will remain operational on the project, reducing the capital intensity over the new term, the company noted.

Macmahon CEO and managing director Michael Finnegan said: “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.

“Macmahon recently sold a substantial portion of the Dawson South equipment fleet, which will continue to be used at the mine. I believe the new contract structure benefits our client, is aligned with Macmahon’s capital light strategy and improves return on average capital employed (ROACE) performance, where we recently increased the target from 15% to 20%.”

The Dawson South mine is situated at the southern end of the Bowen Basin in Central Queensland near the town of Moura.

Last year, Macmahon was selected to provide load and haul services for the Greenbushes lithium project in Western Australia.