IGO to transition Cosmos Nickel Project into care and maintenance

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Image credit: IGO Ltd

Perenti Limited has announced its support for IGO’s decision to transition the Cosmos Nickel Project, which includes the Odysseus Underground Nickel Mine, into care and maintenance by the end of May 2024.

On 8 September 2020, Barminco was granted a $200 million, five-year contract to supply underground mining services for the development and production of the Odysseus underground mine inside the Cosmos Nickel Project.

At Cosmos, Perenti, through Barminco, employs 179 people and has approximately $25 million worth of plant and equipment. In collaboration with IGO, Barminco plans to transfer its workforce to other projects across its global portfolio. With expertise in managing equipment redeployment, the company will reduce scheduled capital expenditure across the portfolio. This process began after the release of $17 million of plant and equipment from the Savannah project, resulting in a significant reduction in capital expenditure in both FY24 and FY25. Barminco’s proactive capital deployment management will ensure efficient fleet redeployment.

Perenti expects FY24 revenue between $3.3 billion and $3.4 billion, with underlying EBIT(A) between $310 million and $325 million. The suspension of Cosmos will not impact the company’s revenue and earnings guidance, and the company expects leverage to improve to be lower than the guidance range of 0.7x to 0.8x.

Adertisement

“Perenti is a globally diversified service provider, operating at nearly 60 operations across Australia, Africa, Europe and North America across several commodities. A key component of our 2025 strategy has been the strategic diversification of our businesses, our projects and our earnings to limit the impact that any one project may have on our overall performance. The value accretive acquisition of DDH1 is the latest example of our strategic diversification journey,” Perenti Chief Executive Officer and Managing Director Mark Norwell said.

“We look forward to releasing our half year results and business update in February 2024.”

Gabrielle Iwanow, President Contract Mining said, “Since December 2004, Barminco has proudly provided underground contract mining services across IGO’s portfolio of nickel mines. Over these 20 years, we have continued to be impressed by their collaborative, innovative and adaptive leadership. We look forward to continuing to provide our services across IGO’s remaining portfolio of assets and will work together with the team at IGO as they transition the Cosmos Project into care and maintenance. We look forward to offering our services and support at Cosmos at an appropriate time in the future. In the meantime, we will work with our 179 highly skilled employees to identify transfer opportunities across our global portfolio of projects.”