Current Share Price $10.11 Buy rating with $14.00 price target High commodity prices are incentivising miners and processors to maximise production, and as a result are generating ongoing capital and maintenance opportunities for the likes of Monadelphous.
MND has recently announced a range of new contracts worth in the order of $215m (listed at the bottom of the trade idea).
Both RIO and FMG have reached out to MND to help with troubled projects which indicates to us that they have a very good standing.
There were a number of institutional investors who sold the stock in May and it fell -22.5%.
MND has seen a number of institutional investors sell the stock in May when it fell -22.5% and has probably experienced some tax loss selling over the last few days which now presents a buying opportunity.
For options clients it can also be used as collateral with a 30% haircut.
They have an increasingly global reach.
Recent contracts include:Work on a major smelter maintenance campaign at Olympic Dam for BHPSeveral Iron Ore packages: Sustaining capital contracts under its panel agreements with BHP and Rio Tinto Such work expected to remain elevated as high iron ore prices spur producers to maximise productionA contract with Rio Tinto for construction and support services at Gudai-Darri MND had previously not been given a scope on this major project.With resourcing constraints present and producers looking to finish projects quickly and benefit from additional production capacity,MND has likely been brought in to assist in meeting the project schedule. This bodes well for MND as they have been reached out to as it suggests they are continuing to provide a good service for Rio.A contract with NMT International to provide specialist heavy lifting and haulage services at Iron Bridge. Conducted in strategic collaboration with global heavy lifting services company Fagioli, which will increase MND’s Heavy Lift capacity and capability.Iron Bridge. With FMG noting some issues on the project, MND has again potentially been brought in to assist in meeting the projects schedule.MND’s Buildtek construction business in Chile has secured: A 3-year contract with Codelco for the operations and maintenance of water infrastructure (extension of services provided since 2018)Two new contracts with Codelco for maintenance activities associated with the concentrator plant at El Teniente mine in RancaguaA contract with BHP for the construction of modularised pump stations and associated infrastructure of the Escondida copper mine in Coloso. High copper prices are likely to continue providing opportunities for this business
Monadelphous Group Limited provides engineering and construction services to the resources and petrochemical industries. The Company provides mining and processing industry maintenance, mining equipment refurbishment, project management, construction, and airport ground handling services. Monadelphous Group serves customers in Australia.
