WA headquartered mineral sands major Iluka Resources has rejected claims made by contractor Roche Mining, totaling $103.5 million, over the development of Iluka's Douglas Mineral Sand project in Victoria.
Iluka has received notices of dispute from Roche, concerning the contract for the design and construction of the Douglas project.
The notices of dispute follow on from claims submitted by Roche to Iluka in December 2005 requesting extensions of time and additional payments under the contract.
The total amount of the claims was $105.3 million with $65.9 million being claimed in respect of the mineral separation plant and $39.4 million being claimed in respect of the wet concentrator plant.
Roche's claims were assessed by Iluka and rejected as being without factual or contractual basis or merit, and not supported by proper quantification or documentation.
In addition the claims were discounted on the basis that they were time barred, which means they were submitted outside the contractually stipulated period for such claims to be considered.
The two companies will now pursue dispute resolution as set down in the contract.
The contract is a lump sum engineering, procurement and construction (EPC) contract. Roche undertook a detailed feasibility study on the construction schedule and the contract sum upon which the EPC contract was based.
Following completion of this feasibility study, the EPC contract for a lump sum of $197.8 million was awarded to Roche in July 2004.
The contract provided for completion of the wet concentrator plant on 14 April 2005 and the mineral separation plant on 15 October 2005.
As Iluka has previously advised, the Douglas Project is now significantly behind the original contract schedule.
The wet concentrator plant is currently in the commissioning phase and the mineral separation plant remains under construction.
Roche's most recent advice, given in December 2005, is that the project will be completed by the end of June 2006.
