BRISBANE (Yosefardi) – Emeco Holdings Ltd is on alert as Mt Muro Gold Mine, operated by Straits Resources Ltd, has been put on care and maintenance status.
PT Indo Muro Kencana, subsidiary of Straits, is the primary customer of Emeco Indonesia, representing 28% of Emeco Indonesia’s fleet and 4% of Emeco Group’s global fleet. It had been anticipated that the mine would represent a significant source of revenue for Emeco Indonesia in fiscal year 2014.
“In light of this development the Indonesian business is now expected to be loss making in the current financial year in the absence of any major new contract wins,” the company said on its press statement.
Emeco Indonesia has funds owing of US$9.8 million from Indo Muro which is largely covered by credit insurance of US$8.3 million. Fleet demobilization costs are expected to be approximately US$1.2 million which are the obligation of Indu Muro. The gold mine has further ongoing contractual obligations to Emeco and has not yet communicated its intended approach to these obligations.
Established in 1972, Emeco claims as world’s largest independent mining equipment and rental business with global rental fleet of approximately 1,000 machines.