It is the largest single contract award in the history of Leighton Contractors.
Leighton Contractors secured the full service, five-year contract in September to deliver whole-of-mine management at the Pilbara iron ore project.
The initial award was to mine the Firetail deposit, valued at $1.5 billion.
FMG’s decision to award the Kings deposit activates the full scope of the contract, which includes operating and maintaining the open cut mining fleet, mine planning, ore quality control, and ore-processing facilities and associated infrastructure, such as the airport and village.
Leighton says FMG is providing the bulk of the capital to purchase the mining plant and equipment.
The Solomon Hub, about 60km north of Tom Price in Western Australia, will annually produce 60 million tonnes of iron ore from the Kings and Firetail deposits, and employ more than 1000 people.
Leighton Contractors managing director Craig Laslett welcomed the contract.
“This award is an indication of our strong relationship with Fortescue and our ability to meet the challenges of the project during the ramp-up to this phase,” he said.
“Over three decades we have developed the ability to safely embed efficiencies and technology that improve cost structures, as well as the flexibility to resource rapidly to increase levels of production.
“It’s a framework that gives us confidence in the mining services market and our ability to respond to the changing nature of our industry, clients and projects.”
Leighton Contractors and FMG will continue to provide opportunities for indigenous contractors and joint ventures.
Laslett said plans to sub-contract more than $100 million of work at the Solomon Hub to indigenous organisations were well advanced, with Leighton Contractors committing to ramp-up to 20% indigenous engagement at the project within three years.
“We believe that we have both an opportunity and a social obligation to support and foster the growth of Indigenous businesses in all of the industries within which we work,” Laslett said.
“In this area our strategy and focus is on training and employment, and assisting Indigenous people, corporations and communities to build successful and sustainable business partnerships.”