Almonty Industries Inc has signed an EPC contract with POSCO E&C for the development works at the Sangdong tungsten and molybdenum mine located in South Korea. The EPC contract, entered into on December 28, 2017 with POSCO E&C, one of top tier general contractors in Korea and a subsidiary of the third largest steel mill in the world, is a turnkey based contract for the development and construction of primary facilities for processing tungsten ore mined out of the Sangdong mine. Under the contract, POSCO E&C is responsible for not only engineering, civil & architectural, machinery & electrical works of processing plant and auxiliary facilities, but also commissioning of such facilities.
The EPC contract has a net contract price of KRW40.3 billion (approximately $37.3 million) and, including the value of primary equipment which will be erected and installed by POSCO E&C, the EPC price reaches KRW54.0 billion (some $50.0 million) which accounts for 65% of the total capital expenditure budgeted for the Sangdong project. The remaining 35% will be spent for the development of underground transportation galleries and accesses to tungsten veins, mine infrastructure, backfill plant, owner’s cost, and other expenses. The primary facilities of the processing plant will be built for 900,000 to 1.2 Mt/y capacity while the initial years of operation targets 640,000 t/y.
The EPC contract stipulates a construction period of 18 months and commissioning period of six months. Following general rules of EPC contracts, cost overrun and project delay will be the responsibility of the EPC contractor.
Almonty’s Chairman, President and CEO Lewis Black said: “The signing of the EPC contract for Sangdong mine redevelopment will be an important and meaningful step to Almonty for bringing what was historically one of the largest and lowest cost tungsten mines in the world back into production. We are particularly pleased to work with POSCO E&C which is a part of the prestigious POSCO Group. POSCO has been committed to the Sangdong mine project by offering a competitive contract price as the project carries the historical implication of rebuilding its original mother company. POSCO was founded by Korea Tungsten (ex-Sangdong mine) in 1968. Based on the current EPC and mine development contracts we believe that Sangdong will be in commercial production after ramp up latest Q3 2019. The production at Sangdong will undoubtedly contribute to a much enhanced leadership of Almonty in the global tungsten space.”
The principal business of Almonty is the mining, processing and shipping of tungsten concentrate from its Los Santos mine in western Spain, its Wolfram Camp mine in north Queensland, Australia and its Panasqueira mine in Portugal as well as the development of Sangdong in Gangwon Province, Korea and the Valtreixal tin/tungsten project in northwest Spain. Los Santos mine was acquired by Almonty in September 2011 and is located approximately 50 km from Salamanca in western Spain and produces tungsten concentrate. The Wolfram Camp mine was acquired by Almonty in September 2014 and is located approximately 130 km west of Cairns in northern Queensland, Australia and produces tungsten and molybdenum concentrate. The Panasqueira mine, which has been in production since 1896, is located approximately 260 km northeast of Lisbon, Portugal, was acquired in January 2016 and produces tungsten concentrate. Sangdong was acquired in September 2015 through the acquisition of a 100% interest in Woulfe Mining Corp.