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M Mining has awarded a $425 million contract to PIMS Group to provide underground mining services at the Millennium and Mavis Downs coal project near Moranbah.

The five-year contract is expected to spark up to 100 mine construction jobs and more than 125 direct full-­time mining jobs for the region.

M Mining director and owner Matt Latimore said PIMS Group’s partnership and risk-sharing approach together with employment of locals was an attractive part of their bid.

“With the majority of the PIMS Group worforce living locally, we’ll be creating new local employment opportunities, with the potential for more jobs as the project ramps up over the next 12 months,” he said.

“PIMS Group shares the same values as M Mining, being focused on making a positive difference for the communities where we operate, through a focus on safety, employment, economic growth and sustainability.”

Underground mining is expected to commence in July 2022 and Mr Latimore said work would commence immediately on preparation and scheduling.

A joint venture between Stanmore Resources and M Resources – MetRes – acquired the mothballed Millennium and Mavis Downs metallurgical coal mine from Peabody Energy Australia last month. M Mining is the joint venture manager and operator of the proposed mining activities.

Stanmore said awarding of the mining services contract to PIMS marked another major milestone in re-opening the mine, following restarting of auger and open-cut operations in Q3 2021.

With $80 million to be spent on infrastructure, civil works and locally built mining equipment, the company said the mine represented a boost to the Australian economy as Queensland continued to recover from COVID-­19.

The contract with PIMS Group covers underground mining, using the bord-­and-­pillar method, commencing with Mavis Downs and later transitioning to Millennium.

Production will be in excess of 1.2 million tonnes run of mine per annum from July 2022.

PIMS Group will be responsible for setting up required infrastructure including conveyor systems, ventilation, associated mine services and surface infrastructure.

The contract also provides for PIMS Group to supply new underground mining equipment, including two continuous miners, bolters and shuttle cars as well as a range of ancillary production equipment to support the operation.

M Mining has the option of retaining all equipment at no additional cost on completion of the contract.

The contract includes an option to extend the agreement to support 15-­years mine life.

Richard Mills from PIMS Group said the company was delighted to partner and support M Mining to successfully develop and extract the underground coal resource at the Millennium and Mavis Downs mine.

“We strongly believe in the fundamentals of the project,” he said.