DOW: Contracts Signed
Downer EDI Limited (Downer) today announced that its Mining Division has signed contracts with BHP Billiton Mitsubishi Alliance (BMA) to June 2015 at Goonyella Riverside and Norwich Park Mines in the Bowen Basin, Central Queensland.
The contracts, jointly valued at approximately A$2 billion, are for load and haul of prestrip material and drill and blast services at Goonyella Riverside Mine, and for load and haul of prestrip material at Norwich Park Mine.
The contracts provide better utilisation of equipment and resources across both mine sites and will result in substantially improved productivity and returns for Downer. New equipment for the contracts totalling approximately A$190 million will be deployed progressively over the coming 12 months and funded primarily through operating cash flow and new finance and operating leases.
Downer has ample funding capacity for the BMA contracts and also the Fortescue Metals Group contract at Christmas Creek for which Downer is preferred bidder. Downer will remain well inside its target leverage range of 25% – 35%. Downer is rated investment grade BBB- (stable outlook) by Fitch Ratings
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