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Monadelphous (ASX:MND) share price on watch after winning new BHP (ASX:BHP) contracts

Rio Tinto share price

The Monadelphous Group Limited (ASX: MND) share price will be on watch this morning after the release of a very positive announcement.

What did Monadelphous announce?

This morning the engineering company announced that it has secured construction and maintenance contracts in the resources sector worth a combined value of approximately $120 million.

According to the release, two of the contracts Monadelphous has been awarded relate to the WAIO Asset Panel Framework Agreement it has previously signed with mining giant BHP Group Ltd (ASX: BHP).

The first contract is to provide structural, mechanical, and electrical upgrades at the Newman Hub site in the Pilbara, Western Australia. Work will commence immediately and is expected to be completed before the end of 2021.

Whereas the second contract is associated with the dewatering of surplus water at the Jimblebar mine site in Newman, Western Australia.

Olympic Dam.

Pleasingly, there could be more contracts coming Monadelphous’ way in the future from BHP.

The company also revealed that it has entered into an Olympic Dam Asset Projects Framework Agreement with BHP to provide it with multi-disciplinary construction services at the Olympic Dam copper mine in South Australia.

Monadelphous has secured its first contract under the agreement. This is for the supply and construction of acid storage tanks and connection to the existing operating acid plant.

Saraji Mine.

Finally, the company advised that its Maintenance and Industrial Services division has also been awarded a contract.

This contract will see the company undertake a major dragline shutdown for the BHP Mitsubishi Alliance at its Saraji Mine, located near Dysart, Queensland. Management advised that the work will be completed by the end of December 2020.

With the Monadelphous share price down over 37% since the start of the year, shareholders will no doubt be hoping that these contracts get it heading in the right direction again.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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