Downer EDI is selling its Western Australian open-cut mining business to contracting group MACA in a $200 million deal.
Mining West is a surface contract mining business focused on the Western Australian iron ore and gold sectors.
It boasts large contracts at Karara (Ansteel), Eliwana (Fortescue Metals Group), Cape Preston (Citic Pacific) and Gruyere (Gold Fields, Gold Road Resources).
“The acquisition of the Mining West business provides MACA with a very meaningful addition of a large scale mining fleet that is currently engaged across four long-life projects, all with quality customers that are well known to me and other key members of MACA’s management team,” MACA chief executive officer and managing director Mike Sutton said.
“With the inclusion of Mining West, MACA now has total contracted work in hand of over $3.4 billion, that provides a robust revenue base well past FY25.”
Downer hief executive officer Grant Fenn said the sale marked another important step in the implementation of Downer’s Urban Services strategy.
“An important part of our Urban Services strategy is to exit our capital-intensive mining business,” Mr Fenn said.
“The sale of Open Cut Mining West follows the sale of Downer Blasting Services, the Snowden consulting business and our share in the RTL Mining and Earthworks joint venture.
“The proceeds received from these four transactions is in line with the carrying value of these businesses.”
He said Downer was in active discussions with interested parties in relation to its Open Cut Mining East, Underground, and the Otraco tyre management business units.
Completion of the sale of Open Cut Mining West, which is subject to conditions, is expected to occur early in the 2021 calendar year.