A mining services business in Australia typically sells for 3x to 6x EBITDA. A WA contractor generating $1M in normalised annual earnings might realistically achieve $3M to $5.5M on a good day in a reasonable market — but the spread is wide, and the variables specific to this industry can move you a full turn of EBITDA in either direction. Contract tenure, client concentration, equipment condition, and commodity cycle timing all affect your multiple in ways that rarely apply to other trade businesses.
What Mining Services Businesses Actually Sell For
The mining services sector covers a lot of ground. There is no single multiple that applies to a blast-hole drilling contractor in the Pilbara, a shutdown maintenance crew based out of Kalgoorlie, a FIFO camp caterer, and a mobile plant hire operator running a fleet of excavators. These are different businesses with different buyer pools, different risk profiles, and different things that buyers are paying for.
That said, the framework is consistent: buyers are paying for normalised, transferable cash flow, and they’re discounting for anything that makes those earnings uncertain.
Rule of thumb: well-run mining services businesses with diversified contract books and experienced management sell for 4x to 6x EBITDA. Owner-dependent operations without long-term contracts typically achieve 2.5x to 4x.
| Business Type | Typical EBITDA Multiple |
|---|---|
| Owner-operated, one major client, no backlog | 2x – 3x |
| Specialist contractor, 2–3 clients, short contracts | 3x – 4x |
| Established services contractor, diversified, 12+ month backlog | 4x – 5.5x |
| Scaled operation with management team and recurring revenue | 5x – 6.5x |
Equipment values are assessed separately. Most deals involve significant assets — drill rigs, excavators, light vehicles, specialist tooling — and buyers will either purchase these at book value, market value, or negotiate a separate equipment schedule. Don’t assume your machinery adds a clean multiple to your business value; a fleet of twelve-year-old excavators with $2M on the balance sheet can actually complicate a deal if the buyer needs to factor in replacement costs.
The Five Sub-Sectors — and Why They’re Priced Differently
Drilling contractors — exploration drilling, blast-hole, directional, and water bore — are typically the most attractive to buyers. Barriers to entry are meaningful (rigs are expensive, specialist crews are hard to find), margins are strong when utilisation is high, and the work is technically defensible. The risk is contract length: exploration drilling can disappear quickly when commodity prices move and majors cut their exploration budgets. A drilling business heavily weighted toward brownfield mine-site drilling under service agreements is valued differently from one relying on greenfield exploration programs that might not exist next year.
Plant hire and earthmoving businesses offer high margins when equipment is working — EBITDA margins of 20–35% are achievable — but buyers are intensely focused on utilisation rates, maintenance schedules, and replacement capex. A fleet generating $3M in revenue at 80% utilisation is a different story from the same fleet at 55%. And equipment debt matters here more than almost anywhere else: if you’ve financed your excavators and graders through chattel mortgages, those obligations follow the business into due diligence.
Maintenance and shutdown contractors provide labour-heavy technical services — electrical, instrumentation, mechanical — typically to fixed-asset mine sites. Margins are thinner (10–18% is standard), but revenue is stickier. A mine with a processing plant needs maintenance whether iron ore is at US$80/t or US$120/t. The workforce is the asset, and buyers will spend a lot of time understanding what your key supervisors and tradespeople will do post-sale.
Specialist engineering and fabrication businesses sit at the premium end of the sector. If you’re doing bespoke pipework, structural steelwork, or fabrication for mining OEMs, you’ve typically built technical knowledge and client relationships that are genuinely hard to replicate. These businesses attract strategic buyers — larger engineering firms or offshore groups entering the WA market — and multiples reflect that scarcity.
Camp and catering operations are the most commodity-like end of the sector. Contracts are generally won on price, margins are capped by food and labour costs, and the business is entirely dependent on the mine being operational. A camp catering contract is only as good as the mine life beneath it. That said, operators with long-term accommodation contracts across multiple sites — where losing one site doesn’t destroy the business — are valued significantly above single-site operations.
The Contract Backlog Is Your Most Important Number
If you want to know what determines where in the 3x–6x range your business lands, start with your contracted revenue backlog. A buyer underwriting a $5M purchase wants to see that the cash flow sustains itself beyond settlement day. A strong backlog — twelve months or more of contracted work with creditworthy clients — significantly reduces their risk and justifies the upper end of the range.
The quality of that backlog matters as much as the quantity. Contracts with major mining companies (BHP, Rio Tinto, Fortescue, South32, IGO, Evolution Mining) are viewed as high-quality counterparties — slow payers sometimes, but reliable. Contracts with junior miners or small developers are discounted accordingly. And the assignment provisions in those contracts need to be checked: many mining services agreements require client consent to novate to a new owner, which means your broker or advisor needs to manage this proactively before going to market. Finding out six weeks into due diligence that your largest client won’t consent to assignment is the kind of thing that kills deals or forces price reductions.
I spoke with an advisor who ran a sale process for a WA drilling contractor a couple of years ago. The business was doing $6M in revenue, solid margins, good equipment. The owner had one problem: 70% of revenue came from a single iron ore company (which is more concentration risk than most buyers will stomach). The process attracted strong interest, but every credible buyer came back with an earn-out proposal — 40% of the price contingent on that contract renewing for two years post-sale. The owner, who wanted a clean exit, eventually took a lower upfront number to avoid the earn-out. He left about $800,000 on the table relative to what diversified revenue would have supported. That’s the concentration discount, and it’s real.
Normalising Your EBITDA — the Mining-Specific Adjustments
Before any buyer or advisor can apply a multiple to your earnings, those earnings need to be normalised. For mining services businesses, the adjustments that come up most often are:
Owner salary and drawings. The market replacement cost for a general manager or operations manager running a $5M–$15M mining services business is typically $180,000–$280,000 per year. If you’re drawing $120,000 and treating the rest as profit, a buyer adds back the difference. If you’re drawing $450,000 because you can, they subtract the excess.
Equipment depreciation. Mining services businesses often run accelerated depreciation schedules for tax purposes — 25% or 30% per year on heavy equipment. Buyers look at actual economic depreciation and replacement capex separately from the accounting charge. If your reported EBITDA is high partly because your equipment is fully depreciated on the books but you’re running old iron that needs replacing in three years, buyers will model that capex and shade their offer accordingly.
LAFHA and site allowances. Living Away From Home Allowances and site-based payments can make up a significant portion of your cost base. Buyers will verify that your FIFO cost structure is sustainable and that allowances are being treated correctly for payroll tax and super purposes. Errors here create contingent liabilities that buyers price in or walk away from.
Related-party transactions. If the business rents premises, equipment, or vehicles from an associated entity — a family trust, a related company, the owner personally — those rates need to be at arm’s length. Buyers will normalise any above-market related-party costs, and they’ll scrutinise below-market rates too (artificially cheap rent reduces the cost base and flatters profitability, which a buyer will adjust out).
The Cyclical Discount — Managing the Mining Clock
Mining services businesses are cyclical. Everyone knows this, including buyers, which is why they apply a discount when valuing your business during the expansionary part of the cycle. They’re not being cynical — they’re pricing in the risk that the next eighteen months of boom earnings don’t persist.
The practical implication is that the “right” time to sell a mining services business is counter-intuitive. You’ll get the best price when your trailing three-year earnings are strong and your forward backlog is solid — not at the absolute peak of the market, when buyers are already modelling a correction.
Understanding how to increase business value before selling matters in every sector, but in mining services it particularly means building out your client base, securing longer-dated contracts, and reducing single-client exposure in the twelve to eighteen months before you go to market.
Tax and Structure: Don’t Leave It Until You’re Ready to Sign
The tax implications of selling a mining services business are worth planning around years in advance, not weeks. The Small Business CGT concessions — the 50% active asset reduction, the retirement exemption, the 15-year exemption — can reduce your tax liability dramatically, but they require the business to meet specific criteria around structure, active asset test, and your own circumstances. Get your accountant and your advisor aligned on structure before you start a sale process. Restructuring mid-deal is expensive and sometimes impossible.
Asset sale versus share sale is a particularly significant question in this sector. Mining services businesses often have equipment financed on chattel mortgages, contracts with assignment provisions, licences and accreditations that may need to transfer separately, and lease agreements on yards or workshops. Share sales preserve continuity; asset sales give buyers a clean start. The negotiation over structure can add or subtract material value from the deal.
The due diligence process for a mining services business is detailed and industry-specific. A buyer will want to see your HSE records (no buyer in mining services will proceed without understanding your safety performance), HSEQ certifications, equipment maintenance logs, client contract schedules, employee entitlements, and the last three years of audited or reviewed financials. Being organised before the process starts — rather than scrambling to produce documentation under pressure — is the difference between a smooth process and one that stalls, drags, and eventually reprices.
Who Buys Mining Services Businesses in Australia
Your buyer pool matters because different buyer types pay different prices. Understanding what buyers look for when buying a business applies here, but the mining services buyer universe is more specific than most.
Strategic acquirers — NRW Holdings, Macmahon, MACA, Downer, Perenti, and international groups entering the WA market — are often prepared to pay the highest prices because they can absorb your business into existing operations and extract cost synergies. They’ll also move fastest through due diligence if they know the sector.
Private equity has been active in WA mining services over the last five years, typically targeting businesses with $1M–$5M in EBITDA that they can consolidate into a platform. PE buyers are disciplined on multiple — they’re usually working to a return model that limits how far they’ll go — but they can move quickly and they understand the industry.
Individual buyers and smaller competitors are active at the smaller end of the market, particularly for maintenance contractors and niche specialists. They’re typically less sophisticated in their due diligence but also less likely to try to reprice you after the fact.
If you’re thinking about selling, the first step isn’t listing the business — it’s understanding your actual valuation range and which buyer type is most likely to achieve the best outcome for your specific circumstances. A confidential approach to a handful of strategic buyers, run by an advisor who knows the sector, will almost always outperform a public listing. Contact the team at Miro Capital for a confidential discussion about what your business might realistically achieve.