Australian mining and construction firm BGC Contracting has secured a new contract from the administrators of Onesteel Manufacturing (Arrium) at the Iron Knob and South Middleback Ranges iron ore projects in South Australia.

The five-year term contract carries a value of $720m.

Arrium administrators KordaMentha confirmed that BGC Contracting’s current mining contract is scheduled to expire this year and will now be extended until 2022.

BGC Contracting CEO Greg Heylen said: "This has been a challenging time for the mining sector as it dealt with the decline in the commodities markets in the short-term.

"One of our core strengths as a business is that being privately owned and vertically integrated allows us to be adaptive and most importantly, responsive to significant shifts in the market.

“BGC Contracting’s breadth and vertical integration of services has enabled us to improve efficiencies on the project, which has resulted in lower cash costs for Arrium and the administrators.

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“During this time, we have continued to meet Arrium’s safety and production targets and we look forward to continuing our work with Arrium’s team in the future.”

Under the contract, BGC Contracting will provide multiple mining services that include drilling, blasting, loading, dumping, hauling and train load-out.

Arrium Mining executive general manager Matt Reed said: “With the price of iron ore falling over the past few years, it’s been imperative that we reset our cost base and build a long-term, sustainable business.

"With the price of iron ore falling over the past few years, it’s been imperative that we reset our cost base and build a long-term, sustainable business."

“We had a lot of work to do, but BGC has played a major role in bringing our mining costs down by working in partnership with our operations team.

“We look forward to developing this partnership with BGC over the coming years and continuing to reduce our costs as we create a world-class business.”

The Iron Knob and South Middleback Ranges iron ore projects are situated near Whyalla in South Australia.

These projects provide lump and fine products to the international steel market.


Image: The South Middleback Ranges iron ore project. Photo: courtesy of BGC Contracting.