Macmahon Holdings nabs US$500 million contract for Mongolian coal project
Macmahon Holdings (ASX: MAH) and joint venture partner Operta GmbH have been awarded a contract for coal mining operations at the Tavan Tolgoi Coal Mine in Mongolia, opening the door to a prosperous market.
The contract, with state-owned Erdenes Tavan Tolgoi JSC, has a five year term with an estimated value of greater than US$500 million.
This deal is a step forward in Macmahon’s international expansion, paving the way for the company to potentially develop a long-term business in the region.
The project involves large-scale open cut mining operations in the Eastern Tsankhi area of the Tavan Tolgoi deposit, in Mongolia’s South Gobi region, 540 kilometres south of Ulaanbaatar.
Mining will begin in January 2012, at a rate of 3 million tonnes per annum (Mtpa), utilising the client’s existing equipment. Production is expected to ramp up to 6Mtpa in the second year, and will increase from there to 15Mtpa once the mine and transport infrastructure is established.
The joint venture is in discussions with potential financiers for an off-balance sheet funding solution to provide equipment for the ramp up in the contract production rates. Financing is expected to be finalised in the first six months of 2012.
The contract, with state-owned Erdenes Tavan Tolgoi JSC, has a five year term with an estimated value of greater than US$500 million.
This deal is a step forward in Macmahon’s international expansion, paving the way for the company to potentially develop a long-term business in the region.
The project involves large-scale open cut mining operations in the Eastern Tsankhi area of the Tavan Tolgoi deposit, in Mongolia’s South Gobi region, 540 kilometres south of Ulaanbaatar.
Mining will begin in January 2012, at a rate of 3 million tonnes per annum (Mtpa), utilising the client’s existing equipment. Production is expected to ramp up to 6Mtpa in the second year, and will increase from there to 15Mtpa once the mine and transport infrastructure is established.
The joint venture is in discussions with potential financiers for an off-balance sheet funding solution to provide equipment for the ramp up in the contract production rates. Financing is expected to be finalised in the first six months of 2012.
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