BGC wins $720 million contract at Arrium project

BGC wins $720 million contract at Arrium project

Australian mining and construction firm BGC Contracting has been awarded a AUS$720 million mining contract at Arrium’s Iron Knob and South Middleback Ranges iron ore projects in South Australia.

The five-year contract will see BGC provide a full range of mining services including drilling, blasting, loading, hauling, dumping and train load-out.

Arrium administrators KordaMentha confirmed BGC’s current mining contract, due to be completed this year, will be replace by a new agreement up to 2022.

BGC chief executive officer Greg Heylen said the new contract was a significant vote of confidence in the project and reflected well on the collaborative relationship between the two companies over the past four years.

“This has been a challenging time for the mining sector as it dealt with the decline in the commodities markets in the short term. One of our core strengths as a business is that being privately owned and vertically integrated allows us to be adaptive and most importantly, responsive to significant shifts in the market,” Heylen said.

“BGC Contracting’s breadth and vertical integration of services has enabled us to improve efficiencies on the project, which has resulted in lower cash costs for Arrium and the administrators.

“During this time we have continued to meet Arrium’s safety and production targets and we look forward to continuing our work with Arrium’s team in the future.”

Arrium executive general manager Matt Reed said the collaborative approach to recent challenges had resulted in significant improvements for both parties.

“With the price of iron ore falling over the past few years, it’s been imperative that we reset our cost base and build a long-term, sustainable business,” Reed said.

“We had a lot of work to do, but BGC has played a major role in bringing our mining costs down by working in partnership with our operations team. We look forward to developing this partnership with BGC over the coming years and continuing to reduce our costs as we create a world-class business.”