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Argyle cuts Macmahon contract by $60M

Argyle Diamonds, a wholly owned subsidiary of Rio Tinto, said the order book value of this contract remains unchanged as the scope of work is still expected to be executed, albeit at a slower rate. Macmahon chief executive, Nick Bowen said that while the slowdown was unfortunate, the operation is expected to ramp back up in the future. As a result of the changes, the current site workforce will be reduced from around 360 to about 140 employees. “We are making every effort to seek alternative employment for our employees, however due to the current market conditions, we will not be able to redeploy the entire workforce, which will unfortunately result in approximately 200 redundancies,” Bowen said. Macmahon has been working on the project since November 2006. It was originally a four-year contract, planned to be completed in early 2011.The Argyle Diamond operation is in the Kimberley region of Western Australia.

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