Tag Archives: Thiess

CIMIC Group closes in on new equity partner for Thiess mining business

Mining finance, Mining mergers and acquisitions, Mining services, , ,

CIMIC Group is close to bringing in a new equity investor for its Thiess contract mining business, with Executive Chairman, Marcelino Fernández Verdes, saying in its latest financial results that due diligence had been completed and negotiations were expected to be finalised “in the coming days”.

Back in July, CIMIC Group announced it had signed an exclusivity agreement and was in advanced negotiations with funds advised by Elliott Advisors (UK) Ltd regarding the potential investment by Elliott into 50% of the share capital of Thiess. This would provide joint control of Thiess to CIMIC and Elliott.

Verdes said in today’s results that the introduction of an equity partner into Thiess “capitalises on the outlook for mining, provides capital for Thiess’ continued growth and enables CIMIC to strengthen its balance sheet”.

Within the September quarter, Thiess secured a A$340 million ($240 million) extension from Glencore to provide mining services at the Mount Owen coal operation in the Hunter Valley of New South Wales, Australia.

CIMIC Group said today that its companies are also bidding on work associated with the Winu copper-gold project in Western Australia, which Rio Tinto revealed a maiden inferred resource for in July; along with a mining extension at MACH Energy’s majority-owned Mount Pleasant coal operation in the Hunter Valley of New South Wales.

Thiess extends stay at Glencore’s Mount Owen coal mine

Coal technology, Mine operation news, Mining services, , , , , , , , ,

CIMIC Group’s Thiess has been awarded a contract extension by Glencore to provide mining services at the Mount Owen coal operation in the Hunter Valley of New South Wales, Australia.

The 18-month contract extension, to commence in July 2021, will generate revenue of A$340 million ($240 million) to Thiess.

Thiess will continue to provide mine planning, design and execution, drill and blast, overburden removal and coal mining services at the mine, it said.

The global mining services provider has operated at Mount Owen since 1994, applying, it says, industry best practice mining operations, with uncompromising environmental and safety standards. It is Thiess’ largest coal mining operation in New South Wales, processing up to 15 Mt/y of run of mine, of which 7.8 Mt/y is mined by Thiess from the Mount Owen North Pit.

Thiess Managing Director, Douglas Thompson, said: “For more than 25 years we have delivered industry-leading, specialised mining techniques at Mount Owen, leading to higher resource recovery, increased plant efficiency and reliable material movement for our client.

“Our team looks forward to continuing our long association with Glencore and the Hunter Valley community.”

Thiess says it has a strong presence in the Hunter Valley where it provides mining services at three mines. It works to deliver social benefits through local employment and training, local procurement, community engagement and Indigenous affairs.

Thiess to bring autonomous drilling to Lake Vermont coal mine

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Thiess has been awarded a contract extension by Jellinbah Group to continue to provide mining services at its Lake Vermont coal mine in Queensland, Australia.

The five-year extension will generate revenue of A$2.5 billion ($1.7 billion) for Thiess, CIMIC Group’s global mining services provider. It will also see the company provide a range of autonomous services at the mine, including the implementation of autonomous drilling and semi-autonomous dozer push, it said.

When it comes to autonomous drilling, Thiess will most likely leverage the learnings from a phased 12-month autonomous drilling pilot project it carried out at MACH Energy’s majority-owned Mount Pleasant coal operation in the Hunter Valley of Australia, in collaboration with Caterpillar and WesTrac.

Thiess said the contract continues its full-service mining operations at Lake Vermont, including mine planning, coal mining, topsoil and overburden removal, drill and blast, water management and rehabilitation of final landforms. This includes providing all mobile plant and equipment, being statutory operator for the project, and operating and maintaining the client’s coal handling and preparation plant (CHPP).

CIMIC Group Chief Executive Officer, Juan Santamaria, said: “For more than 13 years, Thiess has worked alongside Jellinbah Group to safely position the mine’s operations for optimal efficiency, productivity and cost performance. This contract demonstrates Thiess’ ability to turn insight and optimisation into greater certainty for its clients.”

CIMIC Group Executive Mining and Mineral Processing and Thiess Managing Director, Douglas Thompson, said: “We’ve developed a strong working relationship with Jellinbah Group since commencing work at Lake Vermont in 2007. We’re excited to bring fresh thinking and new solutions to support the mine’s continued, sustainable evolution over the next five years.”

The contract extension will commence from January 1, 2022.

CIMIC Group’s mineral processing company, Sedgman also provides CHPP operations support at the Lake Vermont mine, which, in 2012, went through an expansion to more than double production from 4.6 Mt/y to 10.7 Mt/y of coal.

Lake Vermont is held by the participants of the Lake Vermont Joint Venture (Jellinbah Group 70%, Marubeni Coal 10%, Sojitz Coal 10% and AMCI 10%).

CIMIC eyes more coal work as Q1 financials hold up

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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.

Thiess, Cat, WesTrac collaborating on Mount Pleasant autonomous drilling project

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Thiess says it is realising the benefits of drill automation after undergoing a successful field trial at MACH Energy’s majority-owned Mount Pleasant coal operation in the Hunter Valley of Australia.

In collaboration with Caterpillar and WesTrac, Thiess introduced a new Caterpillar MD6250 drill rig with autonomous drilling capability at Mount Pleasant in a phased 12-month pilot project, it said.

The autonomous drill uses state-of-the-art guidance technologies to assist operators in drilling holes to the exact location and depth specified by the drill plan, resulting in safer and more efficient blasting.

Thiess General Manager Autonomous Services, Matt Petty, said the purpose of the pilot was to test the functionality and application of the technology while determining its viability for Thiess’ team, operations and clients.

“This trial is an exciting opportunity for us to investigate the applicability of the technology at our operations and train our people in the remote management of autonomous equipment,” Petty said. “The results are showing significant productivity improvements, safer operations and upskilling opportunities for our people.”

The phased pilot program is progressing through three stages of drill automation – operator mission assist, semi-autonomous drilling and full autonomy and perception, Thiess said.

The current stage, semi-autonomous drilling, automates the entire drilling cycle for one row, including moving between holes, from a remote operator station, it added.

“The drill is now controlled by satellite-guided precision ensuring the blast holes are drilled exactly to the design coordinates and desired floor elevation,” Petty said. “This stage allows our operators to select a row of holes for the drill to navigate and auto drill. Operators also help to monitor and authorise the auto-tram between holes to ensure safety is maintained.”

In the coming months, the drill will be fitted with proximity detection and collision avoidance technology, enabling full automation, Thiess said.

Mount Pleasant Drill Operator, Zac Brasington, said the remote operation of the drill had proven safety, precision and equipment utilisation benefits for his team.

“Working remotely eliminates operators’ exposure to potential high-risk activities and allows the drill to function without operator restrictions,” Brasington said. “The remote station replicates the seat and controls of the machine’s cab, allowing us, as operators, to control the machine with minimal decrease in functionality or productivity.

“It’s also helping drive consistency at our operation with improved accuracy in hole placement, trajectory and depth.”

Thiess’ team has been working closely with Caterpillar and the WesTrac team on the implementation plan throughout the trial process, it said.

Brasington added: “I’ve also had the opportunity to gain new skills and competencies. It’s very rewarding knowing I’m one of the few operators, worldwide, who is able to operate an autonomous drill.”

The outcome of the trial will help to inform how Thiess delivers automation as part of its services offering, according to the company.

Thiess first began mining at Mount Pleasant on November 20, 2017, following a successful five-month mobilisation period. The contractor is responsible for providing a full mining service and increasing mining production to 10.5 Mt/y run-of-mine, according to its website. The team is also undertaking progressive rehabilitation at the site.

Wenco fleet management solution to monitor, control production at Antofagasta’s Centinela

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Thiess has chosen the Wenco Mine Performance Suite to run its operations at Antofagasta’s Centinela copper mine in northern Chile.

Centinela sits 1,350 km north of Santiago in the Antofagasta Region of Chile. Antofagasta Minerals has contracted Thiess, the world’s largest mining contractor, to develop the Encuentro Oxides pit, which will contribute to the mine’s production of 50,000 t/y of copper cathode for a planned lifespan of 15 years.

To monitor and control this production, Thiess is leveraging the Wencomine fleet management system. The system will optimise productivity and efficiency across the pit’s 56 active units, including 12 high-precision loading units and five high-precision drill rigs, according to Wenco.

Wenco’s data solutions are designed to boost productivity, decrease operating costs, extend equipment life, and give mining companies actionable insights into their operations. Its Mine Performance Suite consists of systems for fleet management, high-precision machine guidance, predictive maintenance, collision avoidance, and mining business intelligence.

Unlike other solution providers, Wenco, a Hitachi Group Company since 2009, has designed its systems with an “open systems philosophy” that, it says, “empowers customers to freely integrate systems to support their unique business processes, data requirements, and reporting needs”.

Thiess chose Wenco for its reputation in delivering strong production functionality and a streamlined implementation process with minimal impact on day-to-day mine operations, it said.

Wenco said: “Expanding the business relationship with Thiess in South America is strategically important for Wenco as well. Contractor-operated sites are common throughout the region and they stand as a significant growth market for the company. Likewise, contractor partnerships form a key part of the open and interoperable ecosystem of partners pushed by Wenco and its parent company, Hitachi Construction Machinery.”

Wenco Regional Manager — Latin America, José Eugenio Saravia, said: “We’re very pleased to implement the Wenco Mine Performance Suite at the Encuentro Oxides development.

“Wenco has worked with Thiess at various mining developments around the world and our solutions are ideal for the productivity improvements and ease of deployment they require. We’re looking forward to a long and profitable business together.”

This sale is another boon to Wenco in the region, following recent sales to Chinchillas and Pucamarca mines and a new partnership with Brazil mining solutions provider Tecwise.

“Contractors like Thiess are a major growth area for Wenco and the industry as a whole. We’re seeing a great many more opportunities of this sort throughout Latin America,” Saravia says.

“As well, we’re seeing more and more customers excited to partner with a Hitachi-owned company like Wenco, who can deliver the reliability and support only available from a major OEM and global mining leader.”

Thiess to play major role in Debswana Jwaneng diamond mine Cut-9 project

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Thiess, through Majwe Mining Joint Venture (Majwe), has secured a A$1.7 billion ($1.2 billion) contract at Debswana Diamond Co’s Jwaneng Mine Cut-9 project in Botswana.

Majwe, a JV between Thiess (70%) and long-term local partner Bothakga Burrow Botswana (30%), will provide full scope mining services over nine years, including drill and on-bench services, mine planning, equipment maintenance, load and haul, and mining operations, it said.

This new volume-based contract follows Majwe’s successful completion of the Cut 8 project at the diamond mine in November 2018.

Michael Wright, CEO of CIMIC Group, the owners of Thiess, said: “This new contract strengthens Thiess’ presence in Botswana and builds on our operational and technical teams’ solid performance at Jwaneng since 2011.

CIMIC Group Mining and Minerals Executive and Thiess Managing Director, Douglas Thompson, said: “I am pleased to be extending our long-term relationship with Debswana Diamond Company and Majwe, delivering scalable and innovative solutions that are tailored to our client’s production and expansion needs.”

Last month, Basil Read Mining Botswana, a wholly owned subsidiary of Basil Read Mining, entered into an agreement with Thiess Botswana and Bothakga Burrow Botswana to sell its 28% interest in the Majwe JV to the two firms.

Jwaneng, reportedly the richest diamond mine in the world by value, produces more than 10 Mct per year of diamonds.

The most recently completed Cut-8 project, which took the 2.5 km by 1.5 km mine from a depth of 400 m to 650 m, ensured continuous production until at least 2024.

Cut-9, meanwhile, is expected to extend the life of mine to 2035 and yield an estimated 53 Mct of rough diamonds from 44 Mt of treated material, Debswana said.

Debswana will invest approximately $2 billion over the life of the project, with the company’s shareholders approving the budget for 2019 so that the next phase of work can commence.

At its peak Cut-9 is expected to create more than 1,000 jobs, the majority of which will be held by Batswana citizens.

The high level CEEP key performance indicators for the Cut-9 project include, but are not limited to the establishment of an Apprentice and Artisan Training Centre, a Component Rebuild Centre, which is expected to mature into a self-sustaining business within three years from the launch of the project, and additional local business development initiatives.

Thiess to help expand operations at Bayan’s Melak coal mine in Indonesia

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CIMIC Group subsidiary, Thiess, says it has secured a A$172 million ($121 million) contract extension from Bayan Resources to expand operations at the Melak coal mine in East Kalimantan, Indonesia.

Under the 12-month extension, which takes the contract out to 2023, Thiess will increase coal production and overburden removal and continue to provide additional mining services, including drill and blast, and coal loading to the barge facility, it said.

CIMIC Group Mining and Minerals Executive and Thiess Managing Director, Douglas Thompson, said: “I’m pleased to be continuing our relationship with Bayan Resources and extending our operations at Melak where our team has delivered exceptional technical solutions for almost 10 years.”

In 2008, Thiess was awarded a contract to develop and operate the Melak greenfield coal mine. The mine is divided into the two different mine concessions, Teguh Sinar Abadi and Firman Ketaun Perkasa.

Basil Read subsidiary to sell out of Majwe Mining JV in Botswana

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Basil Read Mining Botswana (BRMB), a wholly owned subsidiary of Basil Read Mining, has entered into an agreement with Thiess Botswana and Bothakga Burrow Botswana (BBB) to sell its 28% interest in the Majwe Mining joint venture to the two firms.

BRMB will sell 28 ordinary shares constituting 28% of the issued shares of Majwe for an amount of BWP85 million ($8.1 million) of which Thiess will acquire 10 ordinary shares and BBB will purchase 18 ordinary shares of the joint venture.

The joint venture dates to 2011 when entered into a pact with Leighton Botswana (later named Thiess Botswana) and BBB to bid for, and if successful, carry out the surface mining works project at Debswana’s Jwaneng diamond mine (pictured) Cut 8 contract mining project. On being awarded the contract in May 2011, the MMJV was incorporated.

The Cut 8 project was for a 66-month period ending in November 2016, but was extended through the addition of Cut 8.3, which ended on November 23, 2018.

In 2017, Debswana issued an expression of interest for the mining works project for the next stage of the Jwaneng mine development, known as the Cut 9 contract mining project. Majwe JV responded to this and was subsequently invited to submit a tender bid in February 2018.

Basil Read said the negotiations are still ongoing and at an advanced stage, with the project expected to commence this year.

The company said: “BRMB’s participation in the Cut 9 project would mean that BRMB continues being restricted from competing in Botswana as an independent entity, and thus limit its ability to unlock capital by growing and expanding its current business in Botswana.

“Participation in the Cut 9 project also requires the provision of both parent company and on-demand financial guarantees, further adding onerous obligations on BRMB. A call made on the guarantees would offset any returns from the project.

“Moreover, the shareholders of Majwe JV have been engaged in negotiations to increase the local citizen economic empowerment levels from the current 12% held by BBB up to 30% as per the tender requirement for the Cut 9 project. This will result in BRMB’s shareholding being diluted significantly.”

The company concluded: “Thus, the Basil Read group is of the view that the Majwe JV shareholding is a non-core asset. In our view, the required capital outlay can be used far more beneficially by funding the required plant and equipment replacements to pursue other opportunities for our mining business both in Botswana and elsewhere.”

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

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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.”