Materials

This company has just secured a $1.1bn contract at Oz’s largest lithium mine

Mon 16 Jan 23, 11:39am (AEST)
A hand belonging to a man in a suit hands over hundreds of dollars of Australian cash to an unseen recipient
Source: iStock

Key Points

  • Macmahon Holdings has finalised a haulage contract worth $1.1bn at WA’s Greenbushes Lithium Mine
  • Greenbushes is operated by Talison Lithium and is Australia’s largest lithium mine by physical size
  • The company was selected as Talison’s preferred contractor late last year

Engineering firm Macmahon Holdings Limited (ASX:MAH) has today confirmed its finalisation of a $1.1bn contract. 

The company has scored the deal with Talison Lithium, the owner of WA’s Greenbushes Lithium Mine, the largest of its kind in Australia. 

Macmahon was first slated as the preferred contractor back in November last year, the company is seeking to strategically expose itself to battery metal plays. 

“This contract will add approximately $1.1 billion to our order book, which delivers on our commodity diversification strategy into future relevant commodities,” Macmahon CEO Michael Finnegan said.

Open pit operations

The contract sees Macmahon undertaking open cut mining activities including loading and hauling, as well as feeding ore through the crusher. 

Works commence on July 2023 and will carry on into 2030 under an initial seven-year term. At the end of this period, should both parties agree, the contract can be extended in 2032. 

“We have built a strong relationship with the Talison Lithium team and look forward to developing this project with them,” Finnegan said. 

The $1.1bn revenue attached to the contract will be accrued over the initial contract period rather than being paid upfront. For those playing at home, this equates to around $142.8m a year. 

Investment considerations 

Using Market Index’s free company data, there are several other immediate key details you can learn about Macmahon Holdings: 

  • Company’s share price is 14.5c* 

  • Market capitalisation of $312.4m* 

  • One year returns are down -21.6% 

  • One month returns up 7.4%

  • Average 4 week trading volume of 2.55m shares 

  • Seven brokers recommend Macmahon as a “Buy” 

  • Two brokers recommend Machamon as “Hold” 

  • Market Index’s recommendation sits at “Strong Buy” 

  • Macmahon ranked 110 of 942 materials sector companies 

A glance at Macmahon's three month charts demonstrates the impact of relative illiquidity
A glance at Macmahon's three month charts demonstrates the impact of relative illiquidity
*As at 11:15am AEST Monday 16 January 2023

 

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Written By

Jonathon Davidson

Finance Writer

Jonathon is a journalism graduate and avid market watcher with exposure to governance, NGO and mining environments. He was most recently hired as an oil and gas specialist for a trade publication.

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