Barminco awarded $250m Dugald River zinc mine contract

Sophia Rostron   |   June 29, 2016

Underground mining contractor Barminco Holdings will continue to work at MMG'S Dugald River zinc project in north-west Queensland, securing a new five-year contract worth $250 million to $270 million.

Barminco had been the underground mining contractor at Dugald River since 2012, and was selected to continue at the mine after the contract was put out to the market at the end of its current term. Barnico confirmed that they'll be performing a full suite of underground mining services at Dugald River, with a near-term focus on development. 

"We look forward to further developing the Dugald River mine for MMG, which adds to the underground mining services we have been performing at MMG's Rosebury mine for a decade," said Chief Executive Peter Stokes. 

The mine will operate over an estimated 25 years while the ore body remains open at depth. At this stage MMG expects to achieve C1 costs of US $0.68-0.78/lb when at a steady state of operation. This confirms Dugald River’s position within the world’s top ten zinc mines when operational.

MMG Dugald River zinc projectOverlooking processing plant construction site - Image courtesy of MMG

MMG Chief Executive Officer Andrew Michelmore said the company remained positive about the long-term fundamentals for zinc.

“With the closure of recent major zinc mines globally, including the end of processing at our own Century mine in Queensland earlier this year, Dugald River will come on line at a time of ever-shrinking global supply,” he said. 

Early works have progressed successfully on site with pre-production mine development from two declines carried out throughout 2015 and 2016. Long lead time items have been ordered and key contracts for construction activities finalised. Following confirmation of these financing arrangements, construction of the processing plant will commence immediately. MMG maintains its previous guidance for first concentrate production in the first half of 2018.

The Queensland Government has also recently granted Dugald River prescribed project status. The decision is expected to significantly streamline administrative decisions and accelerate the development of the mine.

MMG continues to progress the negotiation of remaining service and construction contracts and necessary permits and approvals for the project.

Barminco was also recently awarded a major underground mining contract, worth $275 million, at the Kundana gold mines in the Eastern Goldfields WA.

business capability statement

Source: Barminco, MMG

Sophia Rostron
As the Content editor at Felix (formerly PlantMiner), Sophia works behind the scenes to keep our blog machine in motion. A student of Law and Business, she's very dependent on coffee and loves any excuse to travel.

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