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The new business, to be known as HWE Mining, will encompass 15 sites with a combined turnover of about $A650 million per annum, work-in-hand of $A1.6 billion and a work force of 1800. The HWE purchase brings Leighton Contractors’ work in-hand to $A3.8 billion and its employee base to 5000.
HWE holds contracts with a number of the iron ore, gold, nickel and coal mining sectors’ biggest players, including BHP Billiton, OneSteel, Portman, Newmont, Dominion, Fox Resources, Consolidated Minerals, Gloucester Coal and Solid Energy.
The sale sum includes $A78 million for trade debtors with the balance principally for plant and equipment. Leighton will assume ongoing business liabilities including lease, hire purchase, operating lease and plant hire liabilities and replacing bank guarantees.
Leighton Contractors managing director Peter McMorrow said the new business would provide additional geographic and commodity diversity for the company as well as further growth opportunities, particularly in the iron ore sector.
“HWE has a wealth of contract mining experience and is the industry leader in mining iron ore, producing around 90 million tonnes per annum,” McMorrow said.
McMorrow said Leighton would significantly invest in new plant and equipment during the next few years to maintain a productive and efficient fleet for HWE Mining.
Leighton intends to finalise the purchase of HWE’s 50% joint venture share in the Pilbara-based indigenous contracting company Ngarda Civil & Mining.
Nearly all of HWE’s employees have accepted Leighton’s offer to stay on with the new company.
Gloucester Coal was pleased that its contracts at the Bowens Road North and Duralie opencut operations in the Gloucester Basin had been retained by Leighton under the arrangement.
Chief executive Gavin May said it was a positive outcome after a year of uncertainty following HWE being put in administration and he believed Gloucester and Leighton could deliver safe and efficient mining operations.
