Macmahon untroubled by labour market

The previously announced contracts were with St Barbara (Gwalia), Anglo American (Dawson South) and Red 5 (King of the Hills), and were worth a combined $1.35 billion.

The former two began in May and July, respectively, while Red 5 will begin in early 2022.

Macmahon chief executive officer and managing director Michael Finnegan said it was an impressive feat in uncertain times for the industry.

“Macmahon is continuing to build on its track record for delivery and to advance its growth strategy,” Finnegan said.

“It is very satisfying to have secured significant new work during FY21 (financial year 2021), which provides us with a strong order book and excellent earnings visibility for FY22 and FY23.

“The underground work at Gwalia and King of the Hills also adds scale to our underground business, which is an important step in our strategy to diversify Macmahon.”

Macmahon also signed a new contract with Northern Star Resources for surface mining work at the Julius gold project in Western Australia.

The contract will return $25 million to Macmahon until July 2022.

While many companies have fallen victim to labour shortages in Australia this year – one of the latest being Red 5 – Macmahon has managed to secure and maintain a strong pipeline of contracts for the foreseeable future.

“Despite the challenges of COVID-19, a tightening labour market and adverse foreign exchange movements, I am very pleased with our performance this year,” Finnegan said.

In March, upon securing the $200 million contract with Anglo American at the Dawson South coal mine, Finnegan added that multiple factors had offset the effects of a poor labour market.

“The resource sector outlook is robust driven by high commodity prices and supportive capital markets. As a result, we have seen many clients advance their projects into the tender stage,” he said.