PERTH company Resource Development Group has started international expansion of its mining services business, 15 months after the company founders completed the highly profitable sale of their rail engineering joint venture with Calibre Group.
RDG listed on the Australian Securities Exchange last month, following a $3.5 million initial public offering managed by Blackswan Equities.
Its core business is project management company Engenium, which has been operating since 2003 and counts Atlas Iron, BHP Billiton, Rio Tinto and Sherwin Iron among its current clients.
Engenium is perhaps best known for the successful Calibre Engenium joint venture, which won contracts on most of the iron ore expansion projects in the Pilbara between 2005 and 2010.
The joint venture had about 300 staff and $100 million in annual revenue when Calibre Group moved to full ownership in February 2010.
The consideration paid by Calibre was not disclosed at the time of the purchase, however 2009-10 financial statements lodged by RDG with the stock exchange show that Engenium recorded a profit of $29.9 million from the sale of non-current assets.
Apart from a small amount of plant and equipment, the only non-current asset on its books was its share of the joint venture.
The sale terms include a non-compete agreement, which stops Engenium providing certain rail engineering services for two years to February 2012.
Its current focus is project management and engineering services, primarily for iron ore companies in the Pilbara.
Parent company RDG is looking to build on the core Engenium business, which had revenue of $6.6 million and pre-tax profit of $1.1 million for the half-year to December 2010.
RDG has recently opened a London office and agreed to buy Bunbury-based engineering construction business Pacer Corporation, subject to certain performance hurdles.
The London office has been established to supply project services to the Nimba iron ore project in Guinea.
Nimba is a joint venture between Newmont, BHP Billiton and AREVA, and is currently assessing the development of a 30 million tonnes per annum iron ore mine, associated processing plant, and a rail line to port in Liberia.
RDG managing director Jeff Brill, who was a founding partner of Engenium, said the London office would also serve as a base to pursue other major projects in Africa.
He said the Nimba contract and the London office opening were significant milestones as the company pursued its objective of becoming a vertically integrated mining services provider.
Mr Brill said Engenium currently had about 60 staff and planned to grow to 100 staff.
