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Contract haul for Downer

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Engineering firm Downer EDI has picked up $2 billion worth of contracts from the BHP Billiton-Mitsubishi Alliance.

The company announced that its mining division had signed contracts with BMA to June 2015 at Goonyella Riverside and Norwich Park Mines in Queensland's Bowen Basin.

The contracts, jointly valued at about $2 billion, are for load and haul of prestrip material and drill and blast services at Goonyella Riverside Mine, and for load and haul of prestrip material at Norwich Park Mine.

Downer said the contracts provide better utilisation of equipment and resources across both mine sites and will result in substantially improved productivity and returns for the company.

“New equipment for the contracts totalling approximately $190 million will be deployed progressively over the coming 12 months and funded primarily through operating cash flow and new finance and operating leases,” Downer EDI said.

The company said it has ample funding capacity for the BMA contracts and also the Fortescue Metals Group contract at Christmas Creek, for which it is preferred bidder.

Downer says it will remain well inside its target leverage range of 25 per cent to 35 per cent.