Diversified mining services group Perenti reports that its surface mining business in Africa, contract mining provider African Mining Services (AMS), was awarded a contract for openpit mining services at copper-focused miner Sandfire Resources’ A4 openpit operation, which lies within the larger Motheo copper mine, in Ghanzi, Botswana.

The 73-month contract is valued at R4.57-billion.

Under the terms of the contract, AMS will deliver all surface mining services associated with development and production activities at the A4 openpit.

Perenti MD and CEO Mark Norwell says the company is excited about the opportunity to expand its partnership with Sandfire Resources.

“Motheo is a long-life asset in the Kalahari Copper Belt, and the expansion of our role here is in keeping with our strategy of disciplined growth within top-tier mining jurisdictions with high-quality partners,” he adds.

The A4 openpit is located about 8 km to the west of Sandfire’s existing T3 openpit, where AMS has successfully progressed from development into production works.

Perenti anticipated that preproduction and development work at A4 would start in September, with prestrip mining to start at some point this month.

The T3 and A4 openpits are expected to be operated as a larger, integrated mining operation, and therefore, will leverage the resulting benefits of scale and the operational synergies to optimise the return on capital aligned with its financial targets.

The primary cooperation includes the optimisation of existing infrastructure, mining equipment, maintenance facilities and both technical and operational management.

Perenti’s 2024 financial year guidance, as released to the ASX on August 22, already takes these operational synergies and capital efficiencies into account and includes the respective A4 revenue and earnings, although as with every opportunity, the company will be looking to generate further value for its client and shareholders.

Norwell points out that Sandfire is now one of Perenti’s biggest clients, and over the term of the combined contracts, the T3 and A4 openpits are expected to generate total revenue of over R13.6-billion, “delivering strong returns” for Perenti and its shareholders.

“Since mining service provider Barminco started operations in 2019 and AMS later in 2021, Perenti has established itself as the leading international mining contractor in the Kalahari Copper Belt,” says Perenti contract mining president Paul Muller.

He says that, with the award of its third mine in the region, the company looks forward to playing its part in Sandfire’s expansion of their copper mine.

“Beyond this, I am proud of the contribution Barminco, AMS and Perenti continue to make to the development of Botswana’s mining industry and the community more broadly,” Muller concludes.