Roy Hill contractor into administration

The Australian subsidiary of Spanish engineering contractor Duro Felguera has been placed into voluntary administration after becoming mired in multiple legal disputes related to construction of the Roy Hill iron ore project.

The sole director of Duro Felguera Australia appointed KordaMentha partners Rahul Goyal, Scott Langdon and John Bumbak as joint administrators late last Friday.

That was after its parent company withdrew financial support.

Mr Goyal said creditors were chasing about $90 million from the local subsidiary, which has about $27 million in a solicitor’s trust account and a further $14 million in bank deposits.

A large chunk of that money stems from a May 2018 ruling by the Supreme Court of Western Australia, which ordered Duro to set aside $20 million because of concerns it would not be able to pay potential claims.

That application was brought by specialist transport company Trans Global Projects Pty Ltd, which claimed Duro owed it $30.1 million for work on the Roy Hill project.

Duro, in turn, claimed it was owed $26.4 million by Trans Global.

The matter went to arbitration in Perth and it is understood a ruling was due to be handed down once Duro paid its arbitration fees.

Another big creditor is Chinese contractor DHHI, which also has claims against Duro arising from its work on construction of the Roy Hill mine.

In addition, Duro had multiple claims against South Korean company Samsung C&T Corporation, which was the head contractor on Roy Hill.

Duro recovered about $19 million from Samsung through multiple Supreme Court actions and a further €38 million ($65 million) via an arbitration hearing in Singapore that concluded early last year.

The latter ruling was a fraction of the $310 million Duro had claimed.

Duro’s work at Roy Hill included the supply of all processing equipment and the electrical/control system, in addition to the design, manufacturing and delivery on site of the bulk handling system, both at the processing plant and the port.

The mine project cost in excess of $10 billion to develop and has been in production since 2015.

Having reached its nameplate capacity of 55 million tonnes per year, mine owner Roy Hill Holdings is investing in further upgrades to lift capacity to 60mtpa.

Contractors on this phase include DHHI, which has supplied modules for a tailings project at the mine.