Tag Archives: Jacobs

Jacobs to handle underground materials work for Cadia expansion study

Bulk handling, Mine operation news, Mineral processing, Mineral project development, Mining services, Precious metals, , , , ,

Jacobs has been awarded a contract by Newcrest Mining to provide underground materials handling services as part of the expansion feasibility study at Cadia, one of Australia’s largest gold mining operations.

This contract award builds on Jacobs mining and minerals business’ long history of working with Newcrest across the company’s Cadia Valley operations in New South Wales, Jacobs said.

Jacobs Mining, Minerals and Technology Senior Vice President, Andrew Berryman, said: “During the previous study phase, our mining and minerals experts helped identify a low capital intensity solution as part of an integrated team. By embracing an owners’ mindset and applying our experience in underground mining, materials handling and expansion projects, our integrated approach has the potential to deliver an impressive return on capital for Newcrest.”

The prefeasibility study on an expansion at Cadia envisaged the plant and underground materials handling upgrade costing A$58 million ($41 million). This was part of a bigger A$598 million project to incrementally increase throughput from the base case of 30 Mt/y to 33 Mt/y. Newcrest said that options to further debottleneck to 35 Mt/y would be assessed during the feasibility study.

WorleyParsons to buy Jacobs Engineering ECR for $3.3 billion

Base metals, Coal technology, Energy minerals, Environmental, High tech minerals, Industrial minerals, Mineral project development, Mining mergers and acquisitions, Mining services, Precious metals, Steel and iron ore, Water management, , , , ,

WorleyParsons Ltd has paid $3.3 billion to acquire Jacobs Engineering Group’s energy, chemicals and resources (ECR) business as it looks to create a “pre-eminent global player across hydrocarbons, chemicals and minerals and metals”.

The transaction is expected to deliver approximately 50% earnings per share accretion on a financial year 2018 pro-forma basis after factoring in run-rate cost synergies, according to WorleyParsons.

This deal continues the trend of consolidation in the engineering sector. Jacobs acquired CH2M Hill Cos ltd for $3.3 billion last year and Amec Foster Wheeler took over John Wood Group for some $2.9 billion around the same time.

WorleyParsons CEO Andrew Wood said: “The transaction will bring complementary capabilities in key business lines, including a best-in-class onshore and downstream maintenance, modifications and operations capability, allowing customers to benefit from an expanded integrated solutions offering.”

Following the completion of the transaction, Jacobs will be focused solely on two of its higher growth, higher margin lines of business – aerospace, technology, environmental and nuclear and buildings, infrastructure & advanced facilities, Jacobs said.

Jacobs Chairman and CEO Steve Demetriou said: “For Jacobs, this transaction marks an inflection point in our portfolio transformation focused on more consistent, higher-margin growth as a leader solving the world’s critical challenges.”

The transaction will see Jacobs receive $2.6 billion in cash and 58.2 million shares of WorleyParsons, equivalent to $700 million, or 11% of the company.

Jacobs ECR had aggregated revenue and pro-forma EBITDA of $3.4 billion and $286 million, respectively in the 2018 financial year.

Should all go according to plan, WorleyParsons expects the deal to be complete some four to six months from now.

Sirius awards more contracts for North Yorkshire polyhalite project as capital costs rise

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Construction firm STRABAG and engineering group Jacobs have become the latest recipients of contracts for the Sirius Minerals’ owned North Yorkshire polyhalite project in the northeast of England.

STRABAG, which had already been awarded a design and build contract for the first drive of the mineral transport system (MTS) tunnel between Wilton and Lockwood Beck, near Teesside, has been contracted to construct drives two and three. Jacobs, meanwhile, has been given an engineer, procurement and construction contract for the materials handling facility (MHF) at Wilton.

These announcements came as Sirius updated its capital cost estimate for stage two of the project, which is expected to see the mine expand from 10 Mt/y of polyhalite to 20 Mt/y.

This has seen the stage two capital requirement go from $3 billion in November 2016 to $3.6 billion today.

The majority of the cost increase is associated with the MTS (pictured), which Sirius said reflected its own increased understanding of the “geotechnical characteristics of the strata within which the MTS will be excavated”.

This followed further ground investigation and seismic work that led to a refinement of the parameters set out in the geotechnical baseline report upon which the tunnelling contract was determined.

Chris Fraser, Managing Director and CEO of Sirius Minerals, said the cost increase reflected “an optimisation of the MTS tunnel design and a significantly improved risk allocation for Sirius to support the senior debt financing”.

The MTS cost increase is driven by a combination of the following factors:

  • Optimisation of the tunnel design including an increase in the planned internal diameter of the tunnel from 4.3 m to 4.9 m and an increase in lining thickness from 250 mm to 350 mm;
  • A decrease in advance rates as compared from 25 m/d to 17 m/d, and;
  • A commercial risk allocation which transfers construction and delivery risk to STRABAG.

The MTS includes a 37 km tunnel for a conveyor system to transport the polyhalite from the mine near Whitby to Wilton on Teesside for processing. STRABAG will construct the tunnel by using a Tunnel Boring Machine and the company expects to use a high-capacity conveyor belt system capable of transporting 20 Mt/y of polyhalite at 7.5 m/s.

The MHF will be constructed and managed by Jacobs’ UK subsidiary, with the EPC contract agreed on a target price basis, with financial incentives for completing the scope of work under budget, and financial penalties should completion be late or the cost be above the target price.

The plant has been scoped to include 7 Mt/y of granulated and 3 Mt/y of coarse product in its first phase of development but with a footprint for up to 20 Mt/y of granulated product.

Sirius said its procurement process for the project is nearing completion for the major packages and it is in the final stage of negotiations for the outstanding scopes of work.

Included in this is the MTS fit out, which includes the supply and installation of the MTS conveyor and the associated power supply, and the port facilities which includes construction of the outload circuit, wharf and product storage facility.

Sirius has identified STRABAG as its preferred contractor for the MTS fit out and is in advanced negotiations for provision of port facilities.

As the upfront capital for stage two of the project has increased, Sirius has developed a construction programme that defers the initial costs associated with the port facilities and has amended the scope of work to include temporary truck and train transportation of product from the storage facility at Wilton to the port.

“This enables the construction of the overland conveyor to be deferred until such time as it can be funded through operating cash flows, currently assumed to be 2025,” Sirius said.

While capital costs may have increased in this latest update, the company’s operating cost estimates have actually dropped from $32.6/t in stage one (10 Mt/y) to $29.4/t, and $27.6/t in stage two (20 Mt/y) to $27.4/t.

Sirius has already raised $1.2 billion for mine construction at the project, which is expected to produce first polyhalite in 2021, reach 10 Mt/y production in 2024, expand to 13 Mt/y in 2026 and grow further to 20 Mt/y in 2029.