RCR Tomlinson managing director Paul Dalgleish.

RCR wins $120m contract at Rio's Silvergrass

Tuesday, 16 August, 2016 - 10:26

Engineering group RCR Tomlinson has won a $120 million contract to build processing infrastructure at Rio Tinto’s Silvergrass iron ore mine in the Pilbara.

RCR announced today it had been awarded the contract to deliver a primary crusher and overland conveyor system for the mine, which the mining giant said earlier this month it would commit $338 million to developing.

The scope of work involves engineering, procurement and construction of a new primary crusher, nine kilometres of overland conveyor and an associated 33-kilowatt power line at Rio’s Silvergrass East mine.

The conveyor system, which replaced Rio’s previously planned road haulage plans, will link its Silvergrass operations to its existing processing plant at Nammuldi at a lower cost.

“Our design was innovative and provides Rio Tinto with a solution that uses capital efficiently,” RCR managing director Paul Dalgleish said.

“This contract award demonstrates that RCR is certainly leading the iron ore processing industry and is a result of our innovative approach to cost competitive solutions.”

Work under the contract is expected to begin in the fourth quarter of the year.

Rio chief executive iron ore Chris Salisbury said despite tough market conditions the company remained committed to maximising expenditure with local companies like RCR.

Rio Tinto’s investment of $338 million to complete the development of the Silvergrass mine is a further demonstration of our continued re-investment in Western Australia, which is creating jobs during construction and operation,” he said.

The Silvergrass mine lies adjacent to Rio’s Nammuldi mines and forms part of the Greater Nammuldi precinct.

The Silvergrass project was originally expected to cost more than $US1 billion, however the project was effectively split into three stages.

The first two stages, named Nammuldi Incremental Tonnes stages one and two, incorporated construction of mine haul roads and other infrastructure.

NRW Holdings had a key role in the NIT project via a $140 million contract awarded in July last year.

The two NIT stages and the Silvergrass mine form the Silvergrass Complex, and will add an additional 20 million tonnes per annum capacity to the Greater Nammuldi precinct.

RCR shares were 2.5 per cent higher to $2.43 each at 10am.