SURFACE

Macmahon flags impairments

Macmahon Holdings has forecast another asset impairment as it continues to battle tough market co...

Jack McGinn
Macmahon has forecast another asset impairment as it continues to battle tough market conditions.

Macmahon has forecast another asset impairment as it continues to battle tough market conditions.

An asset impairment in the range of $A95-125 million is expected for the first half of 2015 due to the cumulative effect of difficult conditions in the mining services sector and low demand and market prices for used mining equipment. 

The impairment will be in addition to the $130 million asset write-down recorded by Macmahon in the company’s half year results. 

Because of its nature as a non-cash item, the projected write-down will not have any impact on the company’s existing operations or cashflow and does not impact compliance with existing lender arrangements. 

The expected impairment is the latest in a long series of blows for Macmahon, which posted a $112.5 million loss for the financial half-year. 

Late last month Newmont Mining terminated its two-year $38 million contract with Macmahon over the Martha Mine at its Waihi project in New Zealand following a slip at the northern wall of the open pit.

In March, Macmahon cut jobs from BHP Billiton’s Olympic Dam mine as a result of complications at the mine’s processing facilities following a mill failure.

The company also lost its $260 million per annum Christmas Creek Expansion contract with Fortescue Metals Group to rival Downer EDI in February.

Its shares hit an all-time low of 3.4c in February following the loss of the FMG contract, which came the month after managing director Ross Carroll unexpectedly resigned from his post. 

The company said further details of the latest impairment would be provided in its full-year financial results. 

Shares in Macmahon fell 4% on Friday to 4.8c. 

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.

editions

ESG Mining Company Index: Benchmarking the Future of Sustainable Mining

The ESG Mining Company Index report provides an in-depth evaluation of ESG performance of 61 of the world's largest mining companies. Using a robust framework, it assesses each company across 9 meticulously weighted indicators within 6 essential pillars.

editions

Mining Magazine Intelligence Exploration Report 2024 (feat. Opaxe data)

A comprehensive review of exploration trends and technologies, highlighting the best intercepts and discoveries and the latest initial resource estimates.

editions

Mining Magazine Intelligence Future Fleets Report 2024

The report paints a picture of the equipment landscape and includes detailed profiles of mines that are employing these fleets

editions

Mining Magazine Intelligence Digitalisation Report 2023

An in-depth review of operations that use digitalisation technology to drive improvements across all areas of mining production