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  • Macmahon has announced it wants to take Newcrest mining to court after its long- running Telfer mining services contract dispute
  • The company had already flagged a potential $25 million to $35 million provision against its work at Telfar
  • Macmahon will suffer losses without an increase in the rates Newcrest paid or other changes to the contract

Macmahon has announced it wants to take Newcrest mining to court after its long-running Telfer mining services contract dispute.

In June the company announced it had entered formal talks with Newcrest Mining about the life of mine contract due to changes in the mine plan and schedule works program.

In February 2016, Macmahon was awarded a rolling contract until January 2023.

The contract includes Macmahon to provide the full scope of services for open pit mining and bulk earthworks, including drill and blast, mining waste, materials, equipment hire and subcontracting.

The company had already flagged a potential $25 million to $35 million provision against its work at Telfar.

Macmahon will suffer losses without an increase in the rates Newcrest paid or other changes to the contract.

“Macmahon has advised Newcrest that it will pursue a significant variation claim through the formal dispute resolution process contained in the Telfer Contract,” The announcement stated.

The company is now seeking Newcrest’s agreement to proceed to litigation immediately.

The Telfer gold-copper mines in the Great Sandy Desert in the East Pilbara region of Western Australia is 100 per cent owned by Newcrest.

Macmahon CEO Michael Finnegan said the decision for a formal dispute was not taken lightly.

“We are disappointed we have got to this point, particularly after such extensive discussions to seek to agree on an outcome. However, we have exhausted all options available to us to agree fair and reasonable rates with Newcrest for our work, so we are left with little choice,” he said.

At this stage, Macmahon will continue with the contract.

Macmahon offers mining services to miners throughout Australia and South East Asia.

Newcrest is one of the worlds largest gold mining companies.

“While it is unfortunate we could not agree on an acceptable resolution with Newcrest, we remain confident in our position and optimistic the dispute process will ultimately result in an improved outcome for Macmahon,” Michael said.

Macmahon holdings remain steady today and are selling 17¢ per share while Newcrest mining has gained 0.44 per cent and is currently selling at $36.45 per share.

MAH by the numbers
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