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HomeMining Industry News Downer awarded Blackwater contracts worth $225M

Downer awarded Blackwater contracts worth $225M

Thursday 20th of August 2015 04:04:27 PM



Downer EDI has announced it has been awarded 2 contracts by BHP Billiton Mitsubishi Alliance (BMA) at the Blackwater coal mine in the Bowen Basin.

A $150 million 2 year contract has been awarded for the provision of mining and maintenance services, with a 1 year additional option. The scope of work includes the load and haul of pre-strip material using BMA-owned plant and equipment, as well as maintenance of BMA-owned plant and equipment.

The second contract is a 3 year contract for the provision of blasting services, valued at $75m. The scope of work includes the management and provision of drilling and blasting services, including partial down-the-hole loading services. Both contracts will commence on a date to be confirmed by BMA.

With BMA outsourcing the work to Downer, the current coal workers on site (over 300 people) could be redeployed to other mines or pick up work with Downer, but no guarantees have been given.

BMA acknowledged the decision would cause a lot of uncertainty for its workers, but the contracts were essential in ensuring the best prospect of Blackwater mine continuing to operate in a commercially viable way, to provide ongoing employment opportunities.

The decision is expected to outrage unions, who have been campaigning against the increasing use of contract labour on mine sites across Queensland.

Since the mining downturn companies have been forced to cut costs by using contract workforces, which are often on lower pay and conditions than permanent staff.

Many contract workers are on fly-in, fly-out arrangements, meaning local towns are often affected.

BMA asset president Rag Udd said extensive work over the past three years to reset costs and to safely improve the productivity at each of our mines.

But further deterioration of global metallurgical coal prices means that we must continue to find ways to safely improve our operational performance.

“The contractual arrangements we are announcing today enable us to bring in dedicated services with performance guarantees to ensure our Blackwater mine can safely make further productivity improvements by meeting global benchmark targets,” he said.

“As we implement the decision announced today, BMA will continue to work closely with employees and the local community to manage the impacts of the decision and provide regular updates about the consultation process.”



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