Macmahon Holdings (ASX:MAH) has commenced Phase 2 of the Batu Hijau mining contact in Indonesia.
Macmahon has been operating under a cost-plus arrangement during Phase 1 since the start of the contract last year.
The progression to Phase 2 marks the commencement of the gain share / pain share mechanism within the Mining Contract, whereby any cost savings or overruns will be shared between the parties.
As a result, the parties have agreed to adjust part of Macmahon’s remuneration structure from a percentage based margin, to an agreed management fee of comparable value, reset annually.
Macmahon Holdings (ASX:MAH) closed flat at 21c.