Regional Coal: Thiess awarded $1b mining contract extension from Xstrata

Australian construction, mining and services firm Thiess has been awarded a $1.015 billion extension to its contract to operate the Mt Owen Coal Mine in the Upper Hunter Valley.

The new agreement with mine owner Xstrata Coal runs from October 2011 until the end of 2015 and includes an option to extend by a further 6 months, the company said in statement on Thursday.

Managing director David Saxelby said the contract extension adds to a very significant series of announcements including the $5.5 billion Pakri Barwadih coal mining contract in India, making Thiess the world?s leading contract coal miner.

?The extension at Mt Owen is testament to the long standing relationship with Xstrata Coal at both Mt Owen and across our other Xstrata Coal sites.? Saxelby said.

Mining chief executive Bruce Munro said the contract extension with Xstrata Coal will take Thiess? association with Mt Owen out to 20 years and is a great example of the importance Thiess places on repeat business.

?Thiess will operate a total of seven mining fleets with annual material movements of around 40 million BCM of waste and 8.5 million tonnes ROM coal at Mt Owen,? Munro said.

Situated 25km north-west of Singlefon, Mt Owen is Thiess? largest mining operation in New South Wales. The Mt Owen deposit is complex and consists of multiple seams of coal dipping at angles between 2 and 45 degrees and varying in thickness between 0.4m and 9m. Mining is carried out to a depth of 240m.

The deposit presents greater operational challenges than a typical strip mine, which has required Thiess to develop specialised terrace mining and through seam blasting techniques for which it is now recognised as an industry leader. (denny)