02/09/2013 - 07:07

Forge JV wins $1.47bn Roy Hill deal

02/09/2013 - 07:07

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Bulk earthworks are under way at the Roy Hill mine in the Pilbara.

A joint venture led by Perth-based mining and engineering contractor Forge Group has secured a $1.47 billion construction contract at Gina Rinehart's $10 billion Roy Hill iron ore project in the Pilbara.

Forge announced this morning that its joint venture with Spanish contractor Duro Felguera had been successful in a competitive tender process for the works.

The company said its share of the contract would be around $830 million, its largest-ever deal.

Forge's forward order book will increase to $2.1 billion.

The works will include construction of a 55 million tonnes per year processing plant, as well as structural earthworks, foundations, steelwork, mechanical and electrical equipment, instrumentation, controls, cabling, conveyers and in-plant roads.

Forge Group managing director David Simpson said full works under the contract would not commence until Roy Hill Holdings had negotiated a comprehensive debt financing arrangement for the mine.

Forge will employ a workforce of 1,300 on the project at its peak.

"Roy Hill is Forge Group's largest single contract to date and is a clear indication of our growing reputation as an EPC contractor with the capacity to undertake projects of world-class scale," Mr Simpson said in a statement.

Forge joins a host of fellow Western Australia-based resources services firms to win work at Roy Hill, with contractor NRW Holdings announcing last week it was in line for a $20 million earthworks deal.

NRW's announcement followed engineering firm Calibre Group saying it had started work on a $23 million contract at the mine, a deal which was awarded by lead contractor Samsung C&T.

The giant South Korean group holds the $US5.8 billion engineering, procurement and construction contract for the Roy Hill mine.

National air carrier Qantas began charter flights to the Roy Hill mine midway through last month, through its regional subsidiary Network Aviation.

First production at Roy Hill is scheduled for the third quarter of 2015.

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