Murray & Roberts lands R2bn mining contract in Australia
The group’s order book stood at a record R60.5bn in the six months to December
Engineering group Murray & Roberts (M&R) has secured a R2.3bn mining contract in Australia.
M&R announced on Monday that its subsidiary, RUC Cementation Mining Contractors, had secured the tender at Newmont Corporation, the world’s largest gold producer.
RUC is a diversified underground mining contractor operating throughout Australia and Asia Pacific.
“Capital investment in the mining sector continues mainly in brownfield expansions, although it is expected that investment in new mines will return from mid-2021 onwards,” the company said in a statement.
M&R CEO Henry Laas told Business Day the contract would boost M&R’s mining businesses in Australia.
“Our mining platform has been under pressure. This contract is exciting news for us. We have been speaking to analysts who say that we could be on the cusp of a commodity supercycle. This means that mining companies will need more construction and engineering services from the likes of ourselves,” he said.
Commodity supercycles are decade-long periods in which commodities trade above their long-term price trend.
Laas said M&R expected to announce another mining contract by the end of June.
“This contract helps us to maintain a healthy order book. Covid-19 has made our work especially difficult in certain markets. In the US it has been very difficult to work owing to the uncertainty around the pandemic. Australia has not been as hard hit by the pandemic. We are tendering for various projects in the country,” he said.
M&R reported earlier in 2021 that its order book stood at a record R60.5bn at the end of December, primarily consisting of an energy, resources and infrastructure platform.
The other divisions are mining, as well as a power, industrial and water platform.
Its oil and gas business recently started taking on hydroelectric projects, or gas-to-power projects, after being exclusively focused on liquefied natural gas in Australia.
Up to 80% of M&R’s total order book at the end of December 2020 was located offshore.
The remaining 20% of the order book includes mining work in SA and abroad.
M&R, which was once rated among the highly valuable companies on the JSE in the lead-up to the 2010 World Cup, exited the SA construction industry in 2016.
Its local business, which builds wastewater treatment facilities, has struggled in recent years because of a lack of work.
“The tenders just aren’t there. We hope that projects for independent power producers will come online soon. But right now, tendering in SA is inefficient and frustrating,” Laas said.
He said M&R was well positioned for a return to profitability in the full financial year to June 2021 after it had made a loss of R167m in the six months to December 2020.
M&R’s share price on Monday gained 0.37% to R10.74.
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