Downer wins $500m Roy Hill contract

Group secures four-and-a-half year contract for early mining services in Pilbara.

Downer EDI (DOW) has secured a four-and-a-half year, half a billion dollar contract for the provision of early mining services at the Roy Hill open cut iron ore mine in the Pilbara.

In a statement to the Australian Securities Exchange, Downer said the contract would see it performing pre-strip and supplementary mining activity over the initial years while Roy Hill will be predominantly undertaking mining on an owner-operator basis.

The contract is expected to be executed by the end of November, with its total value estimated at $500 million.

"The contract is anticipated to commence with infrastructure construction early in the 2014 calendar year before proceeding to full-scale mining in the second half of the year," the statement said.

"The services to be provided include drill and blast and load and haul of overburden and ore."

Downer said the capital required for the project will be approximately $110 million – $40 million for new equipment and $70 million provided from existing equipment.

Capital will be spent in the 2015 financial year, it said.

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