Shares in construction and engineering group Aveng fell after it announced its South African-based contract mining subsidiary, Moolmans, has secured a new 60-month contract valued at R10.6 billion (A$911 million) with Black Mountain Mining's Gamsberg mine.

The Gamsberg mine is a zinc mine in the Northern Cape (Black Mountain). Black Mountain is a joint venture between Vedanta and Exxaro Resources.

By 5.37pm on the JSE the share was down 8.32% at R8.15.

Following the information provided in the half-year results announcement on February 17, 2025, Aveng said on Wednesday it was pleased to announce further details on a significant new contract within its Mining segment.

Moolmans, renowned as a tier-one contract mining business, specialises in services for the open-cast mining industry, predominantly operating in South Africa with additional experience in the SADC and West African regions.

This new contract, which involves significantly higher volumes, is a continuation from an existing seven-year contract with Black Mountain. Moolmans has collaborated with Black Mountain to tailor the contract to support the client's growth strategy. This involved setting up a dedicated team to manage the ramp-up plan from now until March 2025, while the operations team works on increasing production to meet the planned contract volumes from April 1, 2025.

Aveng said to boost production, Moolmans has redeployed equipment from concluded contracts and introduced new equipment with support from key OEM suppliers. This equipment has been progressively delivered and commissioned on-site, with further deliveries expected over the next three months.

The contract also enables Moolmans to engage in a fleet renewal program, supported by OEMs, which will spread out capital expenditure over the contract's life. This strategy reduces upfront costs and optimises the use and life of the existing fleet. The total new capital expenditure planned is R1.3bn, to be funded through project cash flows, it said.

" The new contract allows Moolmans to create 342 new jobs in the Northern Cape, bringing its total complement to 690 people on site. Recruitment processes are well advanced, ensuring that new staff are trained to meet Moolmans operating and safety standards prior to joining operations. Pleasingly, this has created the opportunity for previous employees to rejoin the company,“ it said.

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