GHD, GRD Minproc win Cape Lambert work

25/09/2009 - 12:32

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GHD and GRD Minproc have jointly won a key contract for the Cape Lambert iron ore project by a Chinese company, while GHD will separately carry out studies for the operation's port, power and water needs.

GHD, GRD Minproc win Cape Lambert work

GHD and GRD Minproc have jointly won a key contract for the Cape Lambert iron ore project by a Chinese company, while GHD will separately carry out studies for the operation's port, power and water needs.

GRD Minproc, a subsidiary of GRD, and GHD will conduct overall study management for the project, held by MCC Australia Holdings, a local subsidiary of China Metallurgical Group Corporation.

China Metallurgical Group Corp last year bought the project from Leederville-based Cape Lambert Iron Ore for $400 million.

MCC plans to develop an iron ore mine with an initial capacity of 15 million tonnes a year of magnetite concentrate.

GRD chief executive Cliff Lawrenson said the contract award was a further strengthening of the company's relationship with MCC and, in particular, recognition of the support and capability GRD could offer to MCC's expanding role in WA's magnetite sector.

MCC is also the engineering, procurement and construction management contractor for CITIC Pacific's Sino iron project, where GRD Minproc is working with Chinese design institute NETC to provide engineering services for the project's processing facility.

GHD WA operating centre manager Graham Greenacre said the project is aligned with the company's strategy to migrate its infrastructure design capability into the resources sector.

GHD will also carry out a concept study for a new 350 megawatt power station with combined cycle and open-cycle gas turbines.

"In addition, a detailed investigation of port options is required, with infrastructure to support ship loading, workshops, warehousing, site offices and fire controls to be incorporated," said Mr Greenacre.

"Finally, the 110,000m³ per day desalination plant will be adjacent to the port for potable water supply, process water, power station cooling and steam generation, fire control and dust suppression."

Meantime, Mr Lawrenson said general marketing conditions for GRD Minproc remain very challenging, especially in the near term.

"In the recent release of our financial results for the first half of 2009, we reported a reduction in GRD Minproc's revenue for the opening six months of the year," he said.

"Trading conditions have been more challenging than expected so far in the second half of 2009 and as a result we believe the second half group profit will be below the profit recorded in the first half of 2009."

GRD reported a first half net profit of $5.2 million.

"The slower than expected ramp-up of secured jobs combined with the ongoing delay in companies committing to large projects is placing pressure on our revenue stream; however, GRD Minproc continues to aggressively pursue additional project delivery work," Mr Lawrenson said.

"While the short to medium term outlook remains uncertain, the potential for increased momentum on existing projects and ongoing and new study work provides greater optimism for the 2010 financial year."

Shares in GRD were unchanged at 53.5 cents at 14:11 AEST.

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