Downer awarded contract extensions

CONTRACTOR Downer EDI has secured contract extensions in the coal and gold mining sector to the value of $A230 million.
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Working at the Goonyella open-cut coal mine. Image courtesy of Downer EDI.

Lauren Barrett

The three-year contract extensions with Yancoal Australia, Sojitz Corporation and Saracen Mineral Holdings were awarded to Downer subsidiary Downer Blasting Services.

Each contract comprises complete down-the-hole services.

Downer said the award of the contracts covered a further extension at Yancoal’s Yarrabee coal operation in Queensland as well as its Moolarben, Ashton and Duralie coal assets in New South Wales.

The contract with Saracen is for work at Carosue Dam in the South Laverton region of Western Australia, while the contract extension with Sojitz is for the Minerva open cut mine in Queensland’s Bowen Basin, with both to provide downhole services and product supply.

Downer chief executive Grant Fenn said the contract renewals demonstrated DBS’ ability to build effective partnerships with its customers and deliver value.

“This is a positive reflection on both the strength of our relationships with our customers and the quality of our service delivery,” he said.

It is the third renewal of Downer’s Yancoal and Sojitz contracts and the second renewal of the Saracen contract.

The Saracen contract renewal comes after the company recently decided to suspend the Carosue Dam expansion indefinitely, as well as cut expected production and exploration expenditure due to the recent fall in the gold price.

In the 2013 financial year, Downer expects to deliver underlying earnings before interest and tax of $370 million and a net profit of $210 million.

Shares in Downer gained 1.8% yesterday to $3.91.