Tag Archives: BGC Contracting

NRW receives BGC contract win at FMG’s Eliwana project

Mineral project development, Mining equipment, Mining services, Steel and iron ore, , , , , , ,

NRW Holdings’ newly acquired BGC Contracting business has been awarded an infrastructure contract with Fortescue Metals Group at its Eliwana iron ore mine and rail project, in the Pilbara region of Western Australia.

The new contract, which came just two weeks after NRW announced the completion of the BGC acquisition, will support the development of 143 km of rail for the Eliwana project, according to the contractor.

The scope includes the construction of circa-65 km of rail formation, including earthworks, roadworks, drainage works and construction of bridges and pre-cast structures. The contract is valued at close to A$138 million ($96 million) with mobilisation expected to commence soon (completion is scheduled for late 2020). At its peak, the project will employ an expected workforce of 400, utilising over 140 pieces of major plant in the process.

Jules Pemberton, NRW’s CEO and Managing Director, said: “Following the successful acquisition of the BGC Contracting business, NRW’s operational delivery capabilities in the Pilbara are further enhanced, through the addition of the highly skilled BGC workforce into the group, together with the strong technical skillset to safely and successfully deliver the large bridges and concrete structures required on the project.”

In addition to the building of 143 km of rail, Eliwana will include a 30 Mt/y dry ore processing facility and infrastructure. Production is expected to commence in December 2020 with a life of mine strip ratio of 1.1.

NRW Holdings continues spending spree with BGC Contracting buy

Mining equipment, Mining mergers and acquisitions, Mining services, , , , ,

NRW Holdings has continued with its M&A spree, agreeing to acquire 100% of BGC Contracting in a deal that comes with an equity value of A$116.4 million ($78.8 million) and expands its Mining Technologies pillar.

BGC Contracting provides services to the resources, energy and infrastructure sectors across three core businesses: mining, construction and DIAB Engineering.

NRW responded to media speculation earlier this month by acknowledging it had been selected as the preferred bidder in the sale of BGC Contracting.

The agreement comes less than a year since NRW Holdings acquired RCR Tomlinson’s Mining and Heat Treatment businesses and a little over two years since it purchased Golding Group.

NRW said: “The business is a strong strategic fit adding significant scale through an expanded service offering to a high-profile client base with a long track record of contract renewal and extension.”

The deal is expected to provide significant strengthening of NRW’s ‘Mining Technologies’ pillar through the addition of DIAB Engineering, which provides specialist industrial engineering, shutdown maintenance and fabrication services and generates “annuity style” revenues, NRW said.

BGC comes with a fleet of over 200 items of “high-quality mobile mining equipment” with a book value in excess of A$200 million, according to NRW Holdings. It also has an existing contract portfolio and order book of around A$1.5 billion, which “delivers a step change in scale”.

NRW says the deal is highly earnings per share accretive and could have pre-tax synergies of A$15 million/y, driven by consolidation and reduction in duplication, including facilities and systems.

Jules Pemberton, CEO & Managing Director of NRW, said: “We are extremely pleased to announce the acquisition of BGC Contracting which is strongly aligned with our objective to pursue opportunities to further diversify our revenues and enhance shareholder returns.”

He added: “We are enthusiastic about the opportunities ahead for the expanded NRW group, to leverage the additional capabilities and regional strengths of the combined group and further capitalise on our strong market reputation.

“Together with our combined workforce of around 6,000 people supporting more than 100 projects around Australia, we are well placed to offer a diverse range of services and project solutions to clients across the infrastructure, resources, industrial engineering, maintenance and urban sectors.”

NRW in the lead for BGC contract mining business

Mining mergers and acquisitions, Mining services, , ,

NRW Holdings, in response to recent media speculation, says it has been selected as the preferred bidder in the sale of BGC Contracting.

The company said it has consistently stated it is pursuing opportunities to “further diversify its revenues and enhance shareholder returns”, with this including discussions with various parties regarding potential acquisitions. This included talks with BGC Contracting.

Earlier this year, BGC Contracting’s owners, BGC Pty Ltd, said it was exploring options for the group’s national contract mining, maintenance and civil construction business.

While NRW confirmed its preferred bidder status for BGC, it said this status was subject to final documentation and a number of conditions considered “customary in this type of transaction”.

“NRW believes there is significant merit in the acquisition of BGC Contracting and would only enter into a transaction applying a similar discipline to previous transactions (Golding Group and RCR Mining Technologies) on terms that deliver appropriate value for NRW shareholders, including a requirement that any transaction be earnings per share accretive,” it said.

NRW said it has multiple funding options available to it and, furthermore, any transaction would include the assumption of outstanding equipment finance obligations of approximately A$190 million ($131 million), “which is well supported by a considerable fleet of major mobile equipment”.

Monadelphous, BGC win West Angelas iron ore work off Rio Tinto

Mineral project development, Mining services, Steel and iron ore, , , , , , , ,

Engineering firms Monadelphous Group and BGC Contracting will help construct new facilities for Rio Tinto’s West Angelas iron ore mine, in the Pilbara of Western Australia, after the major miner awarded the two companies contracts.

Monaldelphous said its contract at West Angelas Deposits C and D, valued in excess of A$100 million ($68 million), includes the supply and installation of structural, mechanical, piping and electrical and instrumentation works associated with the construction of new iron ore facilities, as well as modifications to existing plant.

The work will commence immediately and is expected to be completed in April 2021.

BGC Contracting, meanwhile, will deliver civil infrastructure work as part of the same project. This includes carrying out bulk earthworks and civil works necessary to construct the heavy and light vehicle road networks that will connect the existing processing plant with the new C and D deposits.

In addition, BGC Contracting will construct the concrete foundations for the planned facility, as well as a HDPE water pipeline and install 17.5km of PVC conduit. BGC said work was due to commence on site in early October, with completion in less than a year. Detailed planning and mobilisation are already underway, it added.

Back in October, Rio, together with joint venture partners Mitsui and Nippon Steel & Sumitomo Metal, approved an investment of $1.55 billion to sustain production capacity at two projects forming part of the Robe River joint venture in the Pilbara. Around $967 million was set to go towards developing the Mesa B, C and H deposits at Robe Valley, with $579 million for developing Deposits C and D at West Angelas operation.

The investments were to enable Rio to sustain production of its Pilbara Blend products, with first ore anticipated from 2021.

Once operational, both projects will feature the latest technology with 34 existing haul trucks to be retrofitted with autonomous haulage system technology, it said.

Monadelphous Managing Director, Rob Velletri, said his company’s contract award highlighted Monadelphous’ strong reputation and proven capability in delivering large-scale construction projects.

BGC Contracting CEO, Greg Heylen, said: “The West Angelas project will display the multidisciplinary capability of our construction team to deliver this large earthworks and civil works project.

“This latest contract award is a further step in the company’s diversification strategy. We look forward to working with Rio Tinto and all stakeholders to deliver this large-scale project.”

Fortescue breaks ground at $1.275 billion Eliwana iron ore development

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Fortescue Metals Group says it has officially broken ground on the Eliwana iron ore mine and rail project in the Pilbara of Western Australia.

FMG Founder and Chairman, Andrew Forrest, was today joined by Mark McGowan, Premier of Western Australia, FMG CEO, Elizabeth Gaines, and the company’s core leadership team, for the official sod turning.

The $1.275 billion project includes the construction of 143 km of rail, a new 30 Mt/y dry ore processing facility (OPF) and infrastructure. First ore on train is expected in December 2020, the company says.

FMG says contracts to the value of A$330 million ($232 million) to date have been awarded to more than 250 Australian business entities as part of the Eliwana development, of which 80% are Western Australia-owned businesses. As further approvals are progressed, it is expected over A$500 million in additional contracts will be awarded by the end of 2019, FMG said.

Contract recipients include BGC Contracting for bulk earthworks and roads, NRW Holdings, also for bulk earthworks, and SIMPEC for electrical, communications and dry fire systems testing.

“Eliwana underpins the sustainable production of West Pilbara Fines and provides the flexibility for Fortescue to deliver products at greater than 60% Fe grade,” FMG said. “The development will utilise the latest technology, autonomous trucks and design efficiency, further cementing Fortescue’s world leading use of innovation across its mining operations.”

Forrest said: “This is a proud day for Fortescue as we celebrate the largest project since the Kings Valley mine in 2014.

“Since Fortescue was founded 16 years ago, we have held community and family at our core and continued to deliver on our commitment to be the safest, lowest cost company. Eliwana is the next great step into the Western Hub, enhancing our profitability and extending our mine life.”

The project will generate up to 1,900 jobs during construction and 500 full-time site positions once operational, according to Forrest.

Gaines said: “The Eliwana project will build on Fortescue’s unparalleled track record and capability in safely developing and operating major iron ore projects in the Pilbara. Eliwana is core to the next phase of development in Fortescue’s world class, innovative operations. The project will see us maintain our low-cost status, provide us with greater flexibility to deliver on our integrated operations and marketing strategy and, when combined with the Iron Bridge Magnetite development, it will increase Fortescue’s average product grade and provide the ability to deliver the majority of our products at greater than 60% Fe, consistent with our long term goal.”

BGC Contracting, SIMPEC awarded contracts for FMG’s Eliwana iron ore project

Mineral project development, Mining equipment, Mining project news, Mining services, Steel and iron ore, , , , , , , , , ,

Australia mining and construction firm, BGC Contracting has been awarded a A$24 million ($16.9 million) contract to deliver bulk earthworks and roads at Fortescue Metals Group’s A$1.7 billion Eliwana iron ore project, 90 km west-northwest of Tom Price, in the Pilbara of Western Australia.

The six-month project is underway and BGC Contracting will deliver infrastructure including the construction of the permanent accommodation village earthworks and access road, a RFDS airstrip and a 16 km-long construction access road, the company said. BGC is carrying out all earthworks and civil works necessary to develop initial road facilities, which will also facilitate connection to near-future construction packages to rail and other infrastructure.

The Eliwana project will involve the building of 143 km of rail, a new 30 Mt/y dry ore processing facility and infrastructure. Production is expected to commence in December 2020 with a life of mine strip ratio of 1.1. The project underpins the introduction of a 60% Fe grade product (Fortescue Premium) in the second half of the company’s 2019 financial year.

BGC Contracting CEO, Greg Heylen, said the Eliwana contract is a major achievement for the company’s diversification strategy and allows BGC to extend its expertise in the mining construction sector.

“When you partner with BGC Contracting, you don’t just partner with one of Australia’s largest contractors; you partner up with every person that works on the job. You get their collective experience, their knowledge, and their work ethic. You get 110%,” he said.

“There has been a real increase in resource sector and construction opportunities, particularly in Western Australia and Queensland, and we look forward to this next phase in our growth strategy.”

The day after BGC announced this contract award, WestStar business SIMPEC said it had been awarded a circa A$10 million contract by ATCO Structures and Logistics to design, supply, construct, test and commission the electrical, communications and dry fire systems for an 800-room mine camp at Eliwana.

The contract, SIMPEC’s largest single contract award to date, was scheduled to commence in mid-2019 and was expected to take nine months to complete.

SIMPEC Managing Director, Mark Dimasi, said: “To see the fruits of the concerted effort during the Fortescue Eliwana tender phase is very rewarding for the team. This Tier One project award is a significant achievement for SIMPEC allowing the company to construct alongside some of Australia’s biggest construction companies.”

BGC considering sale of contract mining business

Base metals, Coal technology, Diamond mining, Energy minerals, Gem stone mining, Industrial minerals, Mining services, Precious metals, Steel and iron ore, , , , ,

The BGC Pty Ltd Board has advised it is exploring options for the group’s national contract mining, maintenance and civil construction business, BGC Contracting.

BGC Chairman Neil Hamilton said the process will be led by its corporate advisor, Macquarie Capital, which, in conjunction with the group’s management, has commenced exploring several strategic options for BGC Contracting including a possible sale, divestment of parts of the business and/or alternate operating models or structures.

Hamilton said: “While this review is ongoing, it will be business as usual for our customers and our staff, and the focus of BGC Contracting will continue to be on delivering excellent services for our customers.”

Plans to divest BGC’s core building materials and construction businesses have been deferred for the foreseeable future, BGC said.

As part of this strategic review process, the BGC board has decided to introduce an independent executive structure for BGC, with the appointment of a CEO to manage the ongoing operations of the group, according to Hamilton.

This will see, with immediate effect, Alan Tate, Group CFO, assume the role of acting CEO, with Sam and Andrew Buckeridge and Julian Ambrose relinquishing their respective day-to-day executive responsibilities.

The board has also initiated a search for a permanent CEO and will announce this appointment in due course.

Just a week before this announcement, BGC Contracting announced it had recently been awarded the earthworks construction contract for Albemarle Group’s Kemerton lithium project.