Australia-based mining company Perenti has secured an open pit mining services contract from Sandfire Resources, for A4 open pit within the Motheo Copper Mine in Ghanzi, Botswana.

Perenti secured the 73-month contract through its Africa-based surface mining business African Mining Services (AMS), which is valued at more than $235m.

Under the terms of the contract, AMS is responsible for delivering all surface mining services related to development and production activities at the A4 open pit.

The A4 open pit is located around 8km to the west of the Sandfire’s existing T3 Open Pit, where AMS has successfully progressed from development into production works.

Perenti plans to begin the pre-production and development works at A4 this month, with pre-strip mining expected to commence in October 2023.

Perenti managing director and chief executive officer Mark Norwell said: “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.

“Sandfire is now one of our largest clients and over the term of the combined contracts, the T3 and A4 open pits are expected to generate total revenue of over A$1.1 billion, delivering strong returns for Perenti and its shareholders.”

Perenti plans to operate the T3 and A4 open pits as a larger, integrated mining operation.

The company will leverage the resulting benefits of scale and the operational synergies to optimise the return on capital aligned with our financial targets.

It will benefit from synergies including optimisation of existing infrastructure, mining equipment, and maintenance facilities, along with technical and operational management.

Perenti considers the operational synergies and capital efficiencies, including respective A4 revenue and earnings, and expects to generate further value for its shareholders.

Perenti contract mining president Paul Muller said: “Since Barminco commenced operations in 2019 and AMS later in 2021, Perenti has established itself as the leading international mining contractor in the Kalahari Copper belt.

“With the award of our third mine in the region, we look forward to playing our part in Sandfire’s expansion of their world-class Motheo 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.”

In May this year, Sandfire Resources produced the first copper concentrate at the Motheo copper mine, located in the Kalahari copper belt about 70km from the town of Ghanzi.