Austin Engineering (ASX:ANG) secures contract with Rio Tinto (ASX:RIO)

Highlights

  • Austin Engineering signs a five-year mining products and service supply contract with Rio Tinto.
  • The contract is concerning the supply of dump bodies, lightweight trays for ore trucks, heavy machinery buckets, water bodies and other fabricated products.
  • The stock of the Company was spotted trading 12.820% higher during the trading today.

Australia-based engineering company, which designs and manufactures buckets, truck bodies and other products used in mining industry Austin Engineering Limited, (ASX:ANG) announced on Tuesday the signing of a five-year mining products and service supply contract with Rio Tinto Services Ltd (ASX:RIO).

The contract is concerning the supply of dump bodies, lightweight trays for ore trucks, heavy machinery buckets, water bodies and other fabricated products.

Under the five-year contract, Austin will be supplying from its major global facilities including those in Australia, Indonesia, North America and South America. The contract is effective from 16 December 2021 and is call-off type agreement. It allows the supply of equipment and services to various Rio Tinto operations across the world via individual purchase orders.

About the Contract:

  • The value of services under the contract over its life is anticipated to be around AU$300 million, although it is dependent on individual purchase orders.
  • The contract includes pre-agreed pricing for mining buckets and haul truck trays matching Rio Tinto’s global fleet facilitating rapid purchasing and order fulfilment.
  • Under the contract, Austin will utilise its newly established ‘Innovation and Technology Hub’ to continue to develop its products to help meet Rio’s objectives to optimise the safety, lifecycle and productivity of its heavy machinery fleet.

While ANG closed 5.128% up at AU$0.205 per share, RIO ended today’s session 1.039% higher at AU$94.795 per share.

Bottom Line:

Rio Tinto is a key customer for Austin’s products and services. Austin has supplied Rio Tinto Iron Ore (RTIO) operations with its equipment and offsite repairs for 33 years.

This contract extends Austin’s involvement with Rio Tinto for another five years.

This commitment has helped Austin built confidence to invest in developing its Austin 2.0, strategy. As part of this strategy, the Company had recently announced AU$6.5 million investment in advanced manufacturing at its facilities in Western Australia and Indonesia.

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