Gindalbie Metals has adopted an innovative approach for developing its $1.8 billion Karara iron ore project, with four engineering companies being given roles.
Gindalbie Metals has adopted an innovative approach for developing its $1.8 billion Karara iron ore project, with four engineering companies being given roles.
The front-end engineering contract has been split between Bateman Engineering and ProMet Engineers.
This continues the rapid expansion of Bateman's Western Australian operations, following its recent acquisition of Perth-based firm Metplant Engineering Services.
The FEED contractors will report to the project management contractor WorleyParsons, which will have oversight of the entire project.
In addition, Gindalbie's joint venture partner in the project, Chinese steel maker Ansteel, has been handing the design of the concentrator through its engineering arm.
The allocation of work to four different engineering firms is designed to help Gindalbie draw on the expertise of specialist suppliers.
It also comes at a time when engineering firms continue to be stretched by the large volume of work on mining, petroleum and infrastructure projects.
Judging by recent profit reports from listed engineering companies, the sector is reaping big financial rewards from the current boom conditions.
Perth-based engineers Clough, GRD Minproc, Southern Cross Electrical Engineering, and Emerson Stewart have all reported strong profit growth (though GRD's overall result was adversely affected by its loss-making infrastructure arm).
Sydney-based WorleyParsons, which is the largest engineering firm in Perth, and Brisbane-based Sedgman, which last year bought Perth firm Intermet Engineering for $32.7 million, have also reported strong results.
Bateman, which is listed on London's Alternative Investment Market, relaunched in the Australian market at the start of this year to capture a share of the surging work.
The group has about 150 staff in WA following its Metplant acquisition, which was signed-off in July after five months of talks.
Bateman Australia managing director Peter Strimaitis said the acquisition would bolster the group's position in the nickel, gold and magnetite sectors.
It would also extend Bateman's geographic coverage to Vietnam and Egypt, where Metplant is currently working.
"Bateman globally has operated in more than 60 countries, but so far these haven't included Egypt and, more importantly, Vietnam," Mr Strimaitis said in a statement announcing the Metplant deal.
Bateman is expected to handle a little more than half of Karara's front-end engineering work, which WA Business News understands is budgeted to cost about $25 million.
The balance will be handed by ProMet, which has previously worked on the Karara project's feasibility studies.
Karara, located east of Geraldton, will be one of the first magnetite iron ore projects to be developed in Australia.
Gindalbie is aiming to mine 20 million tonnes of magnetite ore, which will be processed into 8mt of concentrate. The concentrate will provide feedstock for an iron and steel plant Ansteel is building in China.
The Karara project also involves mining a smaller volume of hematite ore, which can be shipped direct to steel mills.
Gindalbie is pressing ahead with work on the project, even though it has not yet obtained final environmental approvals.
It recently placed orders for $70 million of long-lead items, including two high-pressure grinding rolls and four large ball mills.
Gindalbie is also continuing its drilling program at Karara, and recently announced a doubling of its indicated and inferred magnetite resource to 1.85 billion tonnes.
