Macmahon to become preferred mining contractor for Batu Hijau mine

By Romel S. Gurky

ASX-listed Macmahon Holdings Limited announced Monday it has signed a three-year MOU with Indonesia?s gold and copper mining firm PT Amman Mineral Nusa Tenggara (AMNT).

The company said in a statement that the agreement will see Macmahon assist AMNT to evaluate options to accelerate production from its Batu Hijau copper and gold mine on Sumbawa Island. The parties will also explore options to potentially develop additional deposits in the same mining area, such as the large Elang resource.

Under the terms of this agreement AMNT has nominated Macmahon as its preferred contractor for the three year term of the agreement. This means that, in the event that production from the project is to be expanded, or existing mining works can more effectively be performed by a contractor, the parties will negotiate terms, exclusively and in good faith, for Macmahon to provide any earthmoving and mining services required.

In calendar year 2016, the Batu Hijau mine produced approximately 477 million pounds of copper and 800,000 ounces of gold. Between 2018 and 2020, the total material movement at the mine (both ore and waste) is expected to be more than 200 million tons per annum.

AMNT has rights to terminate the MOU early if there is a change in control of Macmahon or a change in key management, and either party may terminate in the event of disputes.

Macmahon CEO, Michael Finnegan, said the agreement was an encouraging step forward in expanding Macmahon?s presence in Indonesia.

Editing by Reiner Simanjuntak