Leighton Asia gets $A1.6B of UHG contracts in three months

LEIGHTON has landed a $A700 million contract adjustment to ramp up production at the rapidly growing Ukhaa Khudag (UHG) coal mine in southern Mongolia.

Blair Price

Private Mongolian company Energy Resources previously contracted Leighton in April to ramp up the coking coal mine to 10Million tonnes per annum of raw coal production by June 2011 in a $A940 million deal.

Under the adjusted contract Leighton will be ramping up to 15Mtpa by January 2013.

The Leighton Asia subsidiary’s mine operating contracts total more than $1 billion. It originally started operating at UHG back in April 2009 when production reached 1.8Mt within 8 months.

“The request to expand capacity was a testament to Leighton’s strong performance since 2009,” Leighton Asia Hamish Tyrwhitt said.

“It further demonstrates our ability to deliver world class mining solutions to our clients, both through the quality of our people and the safety and reliability of our operations.

“Our strong working relationship with Energy Resources and the local communities in the South Gobi region will ensure the continued success of this project.”

Energy Resources is a subsidiary of major Mongolian conglomerate MCS.

The UHG mine sets the benchmark of what can be achieved in Mongolia’s South Gobi region. It not only boasts big seams at shallow depths but lies close to the key Chinese market and enjoys highly competitive labour costs.

Leighton shares are down 27c this morning to $30.82 after making gains yesterday.