Downer EDI Ltd (ASX:DOW) has announced that it has signed a six-year contract with Fortescue Metals Group Ltd (ASX:FMG) valued at $3 billion.
Under the agreement, Downer EDI is to provide mining services to Fortescue at its Christmas Creek project in the East Pilbara region of Western Australia.
CEO and Managing Director Grant Fenn says the deal is one of the largest mining services contracts of its type in Australia and is expected to generate more than 650 jobs.
Mr Fenn advises that the contract will require capital expenditure of $235 million over a three year period, to be largely funded through operating cash flow, new finance and operating leases.
Downer EDI reported a profit of $189.4 million for year to 30 June 2009.
DOW Price at posting:
$4.73 Sentiment: None Disclosure: Held
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