De.mem (ASX:DEM) signs $1.7m service contract with Rio Tinto (ASX:RIO)

• De.mem (DEM) signs a three-year service contract with Rio Tinto (RIO), valued at $1.7 million, giving certainty to the business for another three years beginning from July
• The new contract is effectively a long-term extension of an existing arrangement with Rio Tinto to manage the potable water and sewage treatment plants at the Amrun mine in Queensland
• The company has been operating the water treatment facilities since 2016, based on short-term revolving contracts and purchase orders respectively
• Revenue apart from this agreement can be secured from the cross sell of additional equipment, specialty chemicals and other consumables
• Shares in De.mem are down 2.86 per cent, trading at 17 cents as of 1:45 pm AEST

Australian-Singaporean water and waste-water treatment company De.mem (DEM) has signed a three-year service contract with Rio Tinto (RIO), valued at $1.7 million.

The new contract is effectively a long-term extension of an existing arrangement with Rio Tinto to manage the potable water and sewage treatment plants at the Amrun mine in Queensland.

Further, it gives certainty to the business for another three years beginning from July.

CEO Andreas Kroell said the important contract is a recognition of the quality of our work and the skills and dedication of our operations team.

“It underlines our well-established customer base in the mining and resources sector, and our strong, recurring service business,” he elaborated.

“The service segment is of high importance to De.mem as the recurring revenues deliver predictable and dependable revenue streams over longer periods.

“Furthermore, our service offering is highly attractive for our customer base, as they can benefit from our extensive expertise in operating water treatment plants most efficiently.

“It also allows us to promote other products into existing facilities, such as our specialty chemicals.”

The company has been operating the water treatment facilities since 2016, based on short-term revolving contracts and purchase orders respectively.

Revenue apart from this agreement can be secured from the cross sell of additional equipment, specialty chemicals and other consumables.

Shares in De.mem were down 2.86 per cent, trading at 17 cents as of 1:45 pm AEST.