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PRIVATE Brisbane coal company Syntech Resources has awarded a $190 million operations contract to the ASX-listed Macmahon Holdings Limited (MAH) that could be worth up to $1 billion annual revenue in three years time.
Macmahon will operate Syntech’s Cameby Downs mine in the Surat Basin for three years, with production expected to commence in July.
“Production will come through the Port of Brisbane, setting us forward over that three years to reach 10 million tonnes annually in stage two, when we plan to go through Wiggins Island in Gladstone,” says Syntech CEO Darian Hielscher.
“Current export prices for thermal coal are $100 per tonne so if that stays the same we’re looking at $1 billion a year.
“We’ve got strong partners and strong shareholders, including our main shareholder Goldman Sachs, who has been following a program of investment in coal assets around the world.”
He cites the deal with Macmahon as a major milestone in the development of the Cameby Downs site.
“In partnership with Macmahon, we look forward to working with local communities to bring sustainable prosperity to the Surat Basin and Western Downs region,” he says.
“With production due to commence in July 2010 and the first coal train to be loaded in October 2010, Cameby Downs signifies the emergence of the Surat Basin as a major source of high quality thermal coal, and delivers on our commitment to generate employment opportunities for the surrounding communities.”
Hielscher says the option to go public has not been an agenda of the Syntech board.
MAH shares rose 0.7 per cent to 75 cents following the announcement today.
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