Leighton and Fortescue in $2.8b deal

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Leighton has won an extension to its work at Fortescue Metals’ Solomon Hub iron ore project in the Pilbara, taking the total value of the work to a record $2.8 billion.

Leighton Contractors, a subsidiary of Leighton, has never had a single contract worth more than its deal with Fortescue.

The iron ore miner has granted Leighton Contractors a $1.3 billion deal for work on the Kings deposit at the Solomon Hub, adding to the $1.5 billion contract granted in 2012 for work at the Firetail deposit.

The Kings mine is under construction and is expected to be completed in months, and Firetail opened in May.

Leighton Contractors will operate and maintain the open cut mining fleet, and carry out mine planning, ore quality control and ore processing facilities at the Solomon Hub.

The company is also operating and maintaining associated infrastructure, such as the airport and village.

Under the deal, Fortescue is providing the bulk of the capital to purchase the mining plant and equipment.

“We’re pleased with Leighton Contractors’ performance at Firetail and we’re delighted to award them the contract at Kings,” Fortescue chief executive Nev Power said in a statement.

The Solomon Hub, located approximately 60 kilometres north of Tom Price in Western Australia, will produce 60 million tonnes of iron ore each year from the Kings and Firetail mines.

Leighton shares lost 17 cents, or 1.12 per cent, to close at $14.95 on Monday.