Macmahon Holdings' latest impairment of up to $125 million on top of a $130 million first half charge has sparked speculation the contractor could be broken up.
Like the mining services sector generally, Macmahon has been sacking staff and losing contracts and revenue from its struggling resources customers as commodities prices have dived.
Most notable has been the loss of a $260 million contract with iron ore miner Fortescue Metals and a payment dispute with a Mongolian government-owned coal miner.
Macmahon said it expects to slash the carrying value of its equipment and inventory by between $95 million and $125 million, affecting its full year pre-tax earnings.
"The decision to make this impairment follows the cumulative effect of continued challenging market conditions for the mining services sector, and low demand and market prices for used mining equipment and inventory," the company said.
That follows the company's $112 million net loss in the first half of this financial year, which included a $130 million impairment charge.
Macmahon's chairman Jim Walker argued then that the company had adapted to cyclical mining market downturns before in its 50-year history and would do so again.
CMC Markets chief market strategist Michael McCarthy said he saw Macmahon as a possible loser in the current mining services industry shake-out currently occurring.
That was due to its geographical exposure to higher risk locations such as Mongolia and Nigeria.
"They are exposed to some marginal mines that could be shut due to lower commodity prices," Mr McCarthy said.
"So I suspect anybody who is interested in these assets is more likely to pick through the wreckage of the company rather than try and take it out whole.
"Anyone who wants this one could pick it up cheap."
Fellow mining services player Bradken rejected a $428 million private equity bid this year.
Macmahon's Australian projects include Newcrest's Mining's Cadia gold project, BHP Billiton's Olympic Dam, Xstrata Zinc in Queensland and others.
The company's balance sheet is relatively healthy, with cash of $124 million and gross debt of $161 million reported in February.
The company's shares closed steady at 4.8 cents.
That means the company's market capitalisation is below $60 million, compared to above $800 million three years ago.
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