30/03/2021 - 12:00

BCI awards $90m in contracts

30/03/2021 - 12:00

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BCI Minerals has awarded two separate contracts to progress the development of its Mardie salt and potash project on the Pilbara coast.

BCI awards $90m in contracts
BCI expects to make a final investment decision for its Mardie salt and potash project in Q2 of this year. Photo: BCI Minerals

BCI Minerals has awarded two separate contracts to progress the development of its Mardie salt and potash project on the Pilbara coast.

The contracts, totalling $90 million, were awarded to local business Engenium and the Australian subsidiary of WBHO Construction.

Perth-headquartered WBHO Infrastructure has been tasked with building a large-scale trial pond and two evaporation ponds for the Mardie project next month, under an initial earthworks package.

Construction works will span 24 square kilometres, BCI says. 

Its Mardie project comprises nine evaporation ponds and both salt and sulphate of potash (SOP) plants.

A definitive feasibility study released in July last year estimates the project will produce 4.4 million tonnes of high-purity salt per annum and 120,000tpa of SOP.

Total development costs are budgeted at $779 million.

Engenium, which also has offices in Perth and Karratha, will be responsible for managing Mardie’s construction program.

BCI said Engenium would help Mardie to achieve construction-ready status ahead of the main building works scheduled to begin in the second half of this year.

Meanwhile, a final investment decision for the project is scheduled for the second quarter of 2021.

“The award of the initial earthworks contract in particular represents a key milestone in BCI’s progress toward main construction and demonstrates board confidence in Mardie’s development pathway,” BCI managing director Alwyn Vorster said.

He said the contracts would be funded by BCI’s strong cash balance and income from a royalty held over the Iron Valley project in the Pilbara, operated by Mineral Resources. BCI had earned a full-year record of $23 million from the royalty in FY20.

Works under the WBHO and Engenium contracts are under way, while local contractors are completing the company’s Karratha office fit-out and expansion of the Mardie accommodation village.

Those contracts were awarded this year along with minor earthworks and Aboriginal heritage surveys, which are being carried out by local indigenous businesses.

The company says all Mardie's contracts are in line with DFS cost estimates, with further development funding to be sourced from both equity and a recent $450 million Northern Australia Infrastructure Facility loan during the second half of 2022.

Shares in BCI were up 1.7 per cent to trade at 30  cents.

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