INDUSTREA has announced the signing of two additional agreements by subsidiary Huddy’s Mining Services with Warkworth Mining.
The global mining products and services provider says the agreements are for the hire, service and support of further equipment for its Mt Thorley Warkworth mine in the Hunter Valley, New South Wales.
Industrea Managing Director and CEO, Robin Levison, says the company would now be providing 17 items of heavy mining equipment at the Mount Thorley Warkworth mine, comprising seven vehicles redeployed from Huddy’s operations in Mt Isa and 10 new vehicles.
Levison says these latest agreements lift the overall revenue from our fleet utilised at Rio Tinto’s Mount Thorley Warkworth mine to approximately $3 - $3.5 million per month once all equipment is mobilised. With a defined term of 24 months, these latest agreements provide assurance on the returns from the investment in this new equipment.
Levinson claims continuing the diversification of the Huddy’s business in the Hunter Valley, this fleet expansion, strengthens the group’s position in New South Wales and provides economies of scale for growing support and services infrastructure in the region. He says that with the requirement for specific new and larger equipment to be deployed in the Hunter Valley, Industrea has utilised a mixture of available hire purchase debt facilities with the balance to be funded from equity and operational cash flow, including the share purchase plan announced on 31 August 2009. The group believes this is an appropriate mix of debt and equity for these long term, secure contracts.
The new service and maintenance requirements under these contracts will also require a modest increase in the number of Huddy’s employees in the Hunter Valley.
Levinson says consistent with Huddy’s philosophy of maintaining a low average age of its equipment fleet, the new equipment continues the fleet renewal. The clear benefit from this strategy is high availability rates due to minimisation of down time for service and maintenance.
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