Privately-owned underground mining contractor Barminco has extended its long-term stay at Western Areas’ (ASX: WSA) Forrestania nickel camp in Western Australia, a new A$236 million (US$179 million) mining and drilling contract that highlights the fact that a contractor can remain part of an operating-cost equation even, in this case, in a grim nickel price environment.
High head grades make Flying Fox and nearby Spotted Quoll – where Barminco has worked for about 12 years and five years, respectively – two of the lowest cost sulphide nickel producers in the world. WSA recently reported the mines were on track to produce 22,000-23,000 tonnes of nickel in concentrate at unit cash costs of A$2.35-2.50/lb in FY2017.
Barminco CEO Peter Stokes said safety was also a key factor in the company winning the contract extension, with the operations having seen a 76% reduction in their total recordable injury frequency rate over the past three years.
“We look forward to continuing to support Western Areas in delivering consistent and reliable production metrics, and maintaining an outstanding safety record at both sites,” he said.
