Tag Archives: CIMIC

Sedgman wins three-year extensions at QCoal’s Sonoma, Byerwen mines

CIMIC Group’s minerals processing company, Sedgman, has been awarded two contract extensions by QCoal to continue to operate and maintain its Sonoma and Byerwen mines processing plants in Queensland, Australia.

The three-year extensions will generate revenue of A$166 million ($118 million) for Sedgman.

The agreements replace and extend Sedgman’s existing agreements at the mines, continuing CIMIC Group’s long-standing relationship with QCoal.

CIMIC Group Chief Executive Officer, Juan Santamaria, said: “We have a strong history of delivering consistent outcomes for QCoal, through our companies Sedgman and Thiess. Sedgman’s expertise in minerals processing and focus on maximum resource recovery will help drive even greater efficiencies at these mines.”

Sedgman Managing Director, Grant Fraser, said: “These contracts are testament to the partnership we have forged with QCoal over many years, and the integration of our engineering design, project delivery and operations teams.”

Sedgman undertook the engineering design, construction and commissioning of the coal handling and preparation plant at Sonoma in 2007, and has continued to optimise and expand the facility, operating it since 2007.

Sedgman delivered engineering, procurement, construction and commissioning services for a 4,500 t/h train loadout facility and processing plant at Byerwen in 2017, and the engineering, procurement, construction and commissioning of a duplication of the 550 t/h coal handling and processing plant in 2018, operating it since then.

CIMIC eyes more coal work as Q1 financials hold up

Australia-based engineering-led group, CIMIC, posted “robust” operating profit margins in its March quarter results, remarking that the mining market is proving resilient throughout the turbulence caused by the fallout of the COVID-19 pandemic.

Revenue came in at A$3.3 billion ($2.1 billion) for the three-month period, slightly down on last year’s A$3.4 billion, while net profit after tax was A$166 million, compared with A$181.1 million in the March quarter of 2019.

Its operating profit margin was 8.4% for the period.

Throughout the quarter, the company said it had witnessed stable investment in capital expenditure to sustain mining operations. Its UGL subsidiary secured contracts to provide maintenance, shutdown and project services for clients in the mining sector, and its Thiess and Sedgman subsidiaries secured framework agreements with Rio Tinto Iron Ore, in Western Australia, and variations to operations contracts in New South Wales, respectively.

The future prospects for the company look good with, as at March 31, around A$90 billion of tenders relevant to CIMIC expected to be bid and/or awarded for the remainder of 2020, and around A$400 billion of projects coming to the market in 2021 and beyond, it said.

Some major projects the company is currently bidding on include the Lake Vermont mining extension contract in Queensland, Australia. CIMIC’s Thiess is currently working on this Jellinbah Group-owned coal asset through a schedule of rates contract that sees it carry out coal mining, clearing and grubbing, topsoil removal, drill and blast, overburden removal and rehabilitation of final landforms. It also provides all mobile plant and equipment and operates and maintains the client’s coal handling and preparation plant at the site, according to Thiess.

Another contract the company is eying up for more work is the Kaltim Prima Coal (KPC) mining extension in Indonesia. Again, Thiess has a schedule of rates contract in place at the 11 Mt/y Sangatta coal operation and the company hopes it can continue its relationship with the mine with a 2022 contract extension.

CIMIC’s UGL to service Alcoa alumina refineries, Bowen Basin clients

CIMIC Group says its services specialist, UGL, has been awarded new contracts worth A$180 million ($123 million) with Alcoa, in Western Australia, and “multiple clients” in the coal-rich Bowen Basin of Queensland.

These new contracts will be executed over a three-year period, providing mechanical, electrical, instrumentation and access services for maintenance, shutdowns and sustaining capital projects, it said.

The work with Alcoa is across the Wagerup and Pinjarra alumina refineries and involves “multi-discipline services” over three years.

In Queensland, UGL is due to carry out maintenance, shutdown and project services across multiple sites and with multiple clients in the Bowen Basin.

UGL Managing Director, Jason Spears, said: “We are excited to be leveraging our 30 years of experience in the mining industry to support key organisations in the resources sector. Our strong working partnerships with leading mining organisations support UGL’s reputation for solid performance and safe delivery of maintenance and shutdown services.”

CIMIC’s CPB Contractors seals A$150 million contract for Rio Tinto in Pilbara

CIMIC’s CPB Contractors has been selected by Rio Tinto to deliver three separate packages of work at the miner’s Robe Valley iron ore operations, in the Pilbara region of Western Australia.

The projects, worth approximately A$150 million ($103 million), include earthworks; construction of roads, bridges and pits; water supply infrastructure and drainage; fencing; and site establishment and demobilisation. The projects will be completed by the end of 2021, according to CIMIC.

Back in October 2018, 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 Tinto to sustain production of the Pilbara Blend and its Robe Valley lump and fines products.

CIMIC Group Chief Executive Officer, Michael Wright, said: “CIMIC Group companies have a strong track record of delivering significant projects to the iron ore industry. With our decades of experience in the Pilbara we offer major mining clients certainty and confidence in construction, mining and industrial services.”

CIMIC exceeds profit guidance in 2018, positive on 2019 and beyond

CIMIC says it is expecting to top its net profit after tax 2018 result this year, supported by, among other things, continued strong performance out of the mining sector.

The engineering company, which has a number of mining-related subsidiaries, recorded net profit after tax of A$781 million ($557 million) in 2018, alongside revenue of A$14.7 billion. The former was up 11% year-on-year and at the top end of guidance of A$720-$780 million, while the latter rose 9% year-on-year. CIMIC said all its operating companies recorded growth during 2018.

And, the good news for CIMIC shareholders is that the company estimates its net profit after tax will increase in 2019, with guidance pitched at A$790-$840 million, subject to market conditions.

CIMIC Group Executive Chairman, Marcelino Fernández Verdes, said: “In 2018, we focused on enhancing the capability of our operating companies to provide integrated solutions, ensuring we deliver enduring value for our clients across the lifecycle of their assets, infrastructure and resources projects.

“This collaborative approach has driven an excellent result for our shareholders, is providing exciting opportunities for our people, and will power the next phase of our transformation through digitalisation and innovation.”

In mining, specifically, the company referenced some notable achievements in its results release. This included significant mining services contracts at the Mt Arthur coal operation in the Hunter Valley, Australia, and at the Encuentro Oxides mine in Chile for Thiess; maintenance and shutdown support services by UGL across BHP Billiton Mitsubishi Alliance coal mines in Queensland’s Bowen Basin; and engineering, procurement and construction of the Pumpkin Hollow copper concentrator in Nevada, US, by Sedgman.

The company also secured a A$150 million contract extension at BHP’s Caval Ridge coal mine (pictured) in Queensland.

CIMIC said: “Looking forward, at least A$130 billion of tenders relevant to CIMIC Group are expected to be bid and/or awarded in 2019, and around A$300 billion of projects are coming to the market in 2020 and beyond, including about $120 billion worth of public-private partnership (PPP) projects.”

Fernández Verdes added: “Our pipeline of work has further increased and we have a positive outlook for 2019 and beyond. This is led by the strong performance of the mining sector, an increasing level of infrastructure opportunities in Australia, and the trends towards more outsourcing of services and for greater investment in PPPs.”

Sedgman and CPB Contractors to prep plant for Pembroke’s Olive Downs coal project

CIMIC Group companies Sedgman and CPB Contractors have been awarded a contract by Pembroke Resources at the Olive Downs coking coal project in central Queensland, Australia.

The contract is for design, procurement, construction and commissioning of the coal handling and preparation plant (CHPP), and will generate revenue to CIMIC Group of A$184 million ($130 million), the company said.

CIMIC said: “Mineral processing company Sedgman and construction company CPB Contractors will work together to deliver this end-to-end solution. Design and early procurement work will commence immediately.”

The CHPP developed by Sedgman, CPB and Pembroke will have sufficient capacity to process the first phase of annual production of up to 6 Mt of run of mine coal from Olive Downs, according to Pembroke. Fully developed, the project will have the capacity to produce up to 15 Mt/y of high-quality metallurgical coal.

Sedgman Managing Director Grant Fraser called Olive Downs an “exciting, long-term development in the Queensland Bowen Basin”, while CPB Contractors Managing Director Juan Santamaria said the project would draw on his company’s long experience in resources infrastructure and strong ongoing project involvement in regional Queensland.

Work is expected to be completed in 2020. The project has 813 Mt of resources, including 514 Mt of reserves.

UGL wins A$180 million maintenance contract at BMA coal operations

CIMIC Group company UGL has secured a new multi-year contract for maintenance and shutdown support services across BHP Billiton Mitsubishi Alliance (BMA) coal mines in the Bowen Basin of Queensland, Australia.

The demand-based contract will deliver revenue to UGL of approximately A$180 million ($126 million), CIMIC said.

Under the new contract UGL will deliver:

  • Coal Handling Preparation Plant (CHPP) maintenance and scheduled plant outage maintenance services, and;
  • Infrastructure maintenance services, including field equipment, remote fuel farms, sewerage and water treatment plants.

CIMIC Group Chief Executive Officer Michael Wright said: “This contract award signifies UGL’s position as a market leader in the delivery of maintenance and shutdown services and the strength of our capability in the Australian mining and services sectors.”

UGL Managing Director Jason Spears said: “We are proud of our long-standing partnership with BMA. This contract reflects our solid reputation for supporting the BMA operations teams through the safe delivery and performance of maintenance and shutdown services.”

Thiess builds on South America first with Antofagasta contract extension in Chile

CIMIC Group’s global mining services provider, Thiess, has been awarded a A$420 million ($303 million) contract extension by Antofagasta Minerals (AMSA) to continue operations at the Encuentro open pit in northern Chile.

Thiess will continue to provide mining services for another four years as part of the contract with a scope of works comprised of drilling, load and haul, mobile equipment maintenance and mine services.

The original 2015 contract with AMSA was Thiess’ first in South America.

Douglas Thompson, CIMIC Group Executive Mining and Mineral Processing and Thiess Managing Director, said: “Since commencing operations in 2015, we have moved over 70 million cubic metres, a first for Thiess in South America. This has been possible through the team’s focus on efficiency and productivity and working collaboratively with our client.”

Planned future improvements at the mine include investment in maintenance infrastructure, a fleet management system and transfer to Thiess of short-term mine planning responsibilities, CIMIC said.

Earlier this month, the Thiess Centinela operation was announced as winners of the ‘National Geology and Mining Service Award’ for safety performance by the Chilean government.

The Encuentro Oxides deposit came into production at AMSA’s Centinela mine in the last quarter of 2017. It is expected to produce an average of approximately 43,000 t/y of copper cathode over an eight-year period, using the existing capacity at Centinela’s SX-EW plant.

Thiess receives A$190 million contract mining extension from BHP Nickel West

Thiess, part of the CIMIC Group, is to continue providing mining services at the Leinster underground mine in Western Australia after agreeing a new deal with BHP’s Nickel West division.

The contract, for a minimum of 24 months, is expected to generate some A$190 million ($135 million) in revenue. It will see Thiess provide a full range of underground mining services and equipment to support the mine’s lateral development and associated ore production including load and haul, shotcreting, cable bolting and full fleet maintenance services.

CIMIC Group Chief Executive Officer Michael Wright said the contract extension acknowledges the company’s ability to work “flexibly with BHP Nickel West to meet the mine’s growing development and production needs”.

The Leinster underground nickel mine is part of BHP Nickel West’s Leinster nickel operation, located in the northern goldfields of Western Australia.

Thiess began work at Leinster in 2016, when the team excavated around 610 m of horizontal development to access nearly 230,000 t of ore using sub-level open stoping mining methods.

Last month, BHP said at the Diggers & Dealers conference in Kalgoorlie, Western Australia, that it was likely to become a nickel sulphate producer within the next year.

Cementation, Sedgman to start work on Nevada Copper’s Pumpkin Hollow project

Nevada Copper’s board has made the decision to proceed to full construction at the Pumpkin Hollow project in Nevada, US, paving the way for its contractors to start working on the new underground mine.

The construction sign off follows a recently completed C$108.5 million ($84 million) public offering of Nevada Copper common shares and pre-construction activities that have been ongoing since May 2018.

Nevada Copper said the transition from pre-construction works to full-scale construction was expected to commence shortly. The 2017 prefeasibility study plan outlined a 5,000 t/d underground project able to produce some 50 MIb/y (22,680 t/y) of copper over a 13.5-year life at all-in sustaining costs of $1.96/Ib, while also laying the foundations for a larger integrated project that includes openpit development and could increase throughput to 70,000 t/d.

In connection with the construction decision, Nevada Copper has awarded a mining contract for shaft sinking and underground mine development work at Pumpkin Hollow to Cementation USA. The contractor has previously worked on the project, having sunk the existing production shaft (down to 579 m) and developed hoist infrastructure in advance of commencement of underground construction activities.

Sedgman USA, a member of the CIMIC Group, has received the engineering, procurement and construction contract for the surface plant and infrastructure at Pumpkin Hollow. The fixed price $118 million contract follows several months of a detailed engineering and design programme conducted by Sedgman incorporating a number of significant improvements to the prefeasibility study for the $197 million underground project.

These improvements are all part of Nevada Copper’s latest review and detailed design for the underground project, which, it says, has led to a number of project optimisations and operational de-risking measures being incorporated in the mine design.

This includes a centralised mine design, providing greater operational efficiency for the underground mine, and construction of a ventilation shaft via blind sink, which provides a lower-risk method to support schedule compliance and further enhances optionality for future operations, the company said.

“Further project enhancements continue to be reviewed by Nevada Copper, including debottlenecking to subsequently increase production throughput and the potential for decline access to the E2 orebody.”

Nevada Copper anticipates first concentrate production from Pumpkin Hollow in the December quarter of 2019.