Mitchell Services CEO Andrew Elf could not reveal which sites but said six rigs would be deployed and operate for three years. After that, he said there might be scope for additional opportunities, such as contract extension or expansion, based on performance during the term of the contract.

“Obviously it is a large client with multiple sites and they’re still using multiple contractors. We certainly don’t have all the work but if we perform well then we have the opportunity to get more rigs in,” he told Mining Monthly.

“There is also specialty work like gas drainage work that the contract could include. We are doing work like that at other sites for other clients so if we can do a good job with the work that we have won then it also opens doors to other parts of work as well.”

The contract with Anglo American is the first Mitchell Services wins since returning to the Australian drilling market in late 2013.

The company’s chairman, Nathan Mitchell, has welcomed the contract as “evidence that Mitchell Services is continuing to strengthen its relationship among tier one resources companies”

“We have been very active in marketing and business development and our pipeline of opportunities is continuing to grow,” he told the share market.

“We remain optimistic about the company’s prospects of winning more contracts in the future based on the strong pipeline.

“While this growth rate is encouraging, our long-term strategy is to continue to grow in a measured and sustainable way so that we can continue to strengthen our relationship with all of our valued clients.”

Anglo American has six mines in Queensland and New South Wales and is working on a few expansions and new projects.

Current expansion activities include exploration and feasibility studies as part of the Foxleigh Plains project to extend the life of the existing Foxleigh open cut mine in the Bowen Basin.

The company is also working towards securing approval for the Boundary Hill South project extension, which resources are expected to be exhausted by next year. If approved, the project will be managed as part of the Callide open-cut thermal coal operation, which already consists of the Dunn Creek, Trap Gully and The Hut pits.

Progress is also being made on the Moranbah South project, a future 50% joint venture project between Anglo American and Exxaro in Central Queensland. The project lies to the south of the $2 billion Grosvenor longwall project, where mining will begin next year. Moranbah South contains high quality coking coal and would involve developing a brand new underground longwall operation.

Anglo American received federal and draft state environmental approvals in November last year but is yet to determine the timing of the project.