Macmahon chief looks to build order book

MACMAHON’S chairman has warned the contractor still has significant work ahead to further build its order book despite winning more than $A2.1 billion in new contracts or extensions in the past year.
Macmahon chief looks to build order book Macmahon chief looks to build order book Macmahon chief looks to build order book Macmahon chief looks to build order book Macmahon chief looks to build order book

Nick Bowen

Staff Reporter

Speaking today at the company’s annual general meeting in Perth, Ken Scott-Mackenzie said while the group’s order book stood at more than $2.2 billion, a 57% increase on the previous year’s result, it was mostly the result of extensions to existing surface and underground mining contracts.

These included Orebody 18/Wheelara for BHP Billiton Iron Ore, Olympic Dam for BHP Billiton, Eaglefield for Peabody Energy and the Waihi gold mine in New Zealand for Newmont Mining.

New contracts included Syntech Resources’ new Cameby Downs open cut coal mine in the Surat Basin of Queensland, as well as Metals X’s Renison underground tin mine, which also marked the group’s return to the Tasmanian mining sector.

Construction was awarded a variety of rail and road contracts throughout the year, most notably the Glenugie Bypass and Ulan Line Alliance, both located in New South Wales, and the Goonyella to Abbot Point rail expansion in Queensland.

However, Scott-Mackenzie said the number of construction projects available to tender and Macmahon’s success rate were both lower than expected.

“On the international front, we had encouraging success with $305 million of new and extended contracts in Hong Kong, Malaysia and Nigeria,” he said.

Namely, the XRL 822 rail tunnel in Hong Kong, Rawang limestone quarry in Malaysia for LaFarge, and the Ewekoro limestone quarry, also for LaFarge, in Nigeria.

Chief executive Nick Bowen told shareholders the company’s underground division was its fastest growing business and represented further expansion opportunities off the back of its 20-year relationship with Rio Tinto’s Argyle diamond mine in the Kimberley and its Cadia [Newcrest Mining] and George Fisher [Xstrata] contracts in New South Wales and Queensland respectively.

“Iron ore and coal are offering a number of areas of growth, as both the large and mid-tier mining companies work to further expand their operations, particularly across Western Australia and Queensland,” he said.

“Unfortunately, the proposed Minerals Resource Rent Tax has led to some short-term uncertainty for domestic projects.”

Like others in the mining sector, he said the group was anticipating growing pressure to attract and retain skilled personnel.

“We are already working to counter the impacts of this expected shortage through recruitment branding, in addition to the focused development of existing staff,” he said.

Bowen said the group’s graduate and apprenticeship program continued to strengthen its future talent pool and was recognised for its commitment in this area at the federal Minister’s Awards for Excellence for Employers of Australian Apprentices.

“We also remain committed to maximising indigenous employment levels throughout Macmahon and we have become a signatory to the Australian Employment Covenant, committing to training and employing indigenous Australians on our projects,” Bowen concluded.