It was a deal tipped to strengthen their relationship, but a legal battle between Strandline Resources and a contractor over work at its flagship $260 million Coburn Mineral Sands project in the Mid West indicates it did the opposite.
According to a writ lodged in the Supreme Court, Macmahon Holdings’ TMM Group is pursuing a $15.8 million damages claim against Coburn Resources, a subsidiary of the ASX-listed explorer.
Strandline Resources ramping up production at its Coburn mineral sands project.
Strandline has rejected the claim, labelling it “baseless” and tellingWAtodayit intends to bring a lawsuit of its own.
The pair inked a $23 million contract in 2020 to lay the groundwork for Strandline’s flagship project about 240 kilometres north of Geraldton, which is mining zircon and titanium to make titanium metal, ceramic tiles and paint.
Under the deal, Macmahon’s TMM Group took control of the earthworks, constructing more than 43 kilometres of road, on-site drainage and establishing access pads ahead of the mine build.
When the contract was first issued in mid-2020, Strandline managing director Luke Graham told shareholders it was pleased to be furthering its relationship with Macmahon and looked forward to the construction works being delivered “on time and budget”.
But less than a year into the contract TMM Group claims it encountered a series of issues that hindered the works, including difficulties accessing water, finding workforce accommodation and getting into one of the mine pits.
TMM Group claims Coburn backed out of a promise to accommodate its workforce at the nearby Coburn Homestead, forcing it to organise alternate accommodation and transport to and from the site via a route that took significantly longer and added to cost and time pressures.
Further, TMM alleged Coburn made a series of design variations which impacted on when key project milestones could be achieved and led to cost blowouts.
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