JSE-listed Aveng confirmed on February 19 that its contract mining subsidiary Moolmans had concluded a new 60-month contract, valued at about R10.6-billion, at the Gamsberg zinc mine, in the Northern Cape.

The mine is owned by Black Mountain Mining, a joint venture between Vedanta and Exxaro Resources.

The new contract, at significantly higher volumes, follows on from the delivery of an existing mining contract at Gamsberg over the last seven years.

"Moolmans has worked with Black Mountain to develop contract outcomes that meet the client's growth strategy. This has included a dedicated team to manage the ramp-up plan over the eight months to March 2025, while the operations team focuses on steadily increasing production to achieve planned contract volumes from April 1," Aveng said in an announcement to shareholders.

Increased production has been achieved by re-deploying equipment from existing operations where contracts have been concluded and ensuring the delivery of new equipment to site with the support of key original-equipment manufacturer (OEM) suppliers.

"Equipment has been progressively delivered and commissioned on site and this will continue over the next three months. The new contract allows Moolmans to invest in a fleet renewal programme that will be executed with the assistance of OEMs, over the life of the contract, thereby reducing upfront capital expenditure and allowing Moolmans to extend the life and optimise the value, of existing fleet," Aveng said.

The total value of new capital expenditure over the life of the contract would amount to R1.3-billion, it added, pointing out that this would be funded through project cash flows.

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," Aveng noted.

Aveng CEO Scott Cummins said the contract underscores Moolmans’ expertise and strong client relationships. "We are proud to support Gamsberg’s growth, while boosting employment and economic benefits in the Northern Cape.”

Moolmans MD Rod Dixon added that the company was committed to delivering operational excellence and ensuring a seamless transition to the new contract, while maintaining the highest safety and productivity standards.”

“At Vedanta, we are committed to fostering strong partnerships with our business partners, recognising our collective growth and success are closely interconnected. Our long-term vision is to create a prosperous future for the Black Mountain Complex where all stakeholders including our employees, business partners and surrounding communities can thrive. We look forward to Moolmans' contribution towards this vision,” commented Vedanta Base Metals CEO Chris Griffith.

Despite the positive contract news, Aveng's share price on the JSE fell by more than 10% on February 19.

This followed days after the company confirmed challenges and financial losses at some of its Australian and South East Asian infrastructure projects for the half-year ended December 31.