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Publish Date : 26-Jun-2013

Leighton Contractors Pty Limited has been awarded a $1.3 billion contract variation to mine the Kings deposit at the Solomon Hub for Fortescue Metals Group (Fortescue). This takes the total value of work under the Solomon Hub agreement to $2.8 billion, the largest single contract award in the history of Leighton Contractors.

In September 2012 Leighton Contractors secured the full service, five-year contract (with two-year extension option) 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. Fortescue's decision to award the Kings deposit activates the full scope of the contract.

The contract includes operating and maintaining the open cut mining fleet, mine planning, ore quality control, ore processing facilities and associated infrastructure, such as the airport and village. Fortescue is providing the bulk of the capital to purchase the mining plant and equipment.

The Solomon Hub, located approximately 60km north of Tom Price in Western Australia, will produce 60 million tonnes of iron ore each year from the Kings and Firetail deposits, and employ more than 1,000 people.

Leighton Holdings Chief Executive Officer, Hamish Tyrwhitt, said: "In providing innovative and efficient outcomes, we continue to deliver value and cost effective solutions for our mining clients.

"Our unique position as the world's largest contract miner, combined with our scale and diversity, continues to generate opportunities for the Leighton Group at the same time as delivering expertise and value to the mining sector."

Leighton Contractors Managing Director, Craig Laslett, said: "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."

"This contract is the result of Leighton Contractors' 30 years of experience in contract mining, mine services and mine management for our clients," Mr Laslett 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 Fortescue will also continue to support commitments to providing opportunities for Indigenous contractors and joint ventures, to further expand Indigenous employment.

Mr Laslett said plans to sub-contract more than $100 million of work at the Solomon Hub to Indigenous organisations were well advanced and Leighton Contractors had committed to ramping up to 20 per cent Indigenous engagement at the project within three years.

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