French company Sodexo is set to become one of the biggest service providers in the Pilbara after signing a $2.5 billion contract to manage all of Rio Tinto’s mine camps and other facilities for 10 years.
French company Sodexo is set to become one of the biggest service providers in the Pilbara after signing a $2.5 billion contract to manage all of Rio Tinto’s mine camps and other facilities for 10 years.
Sodexo expects to employ 900 people to service the Rio facilities, which are spread across five towns, 15 mine sites and three ports and include airports, commercial buildings and residential buildings.
The services will encompass everything from catering, cleaning and waste management to grounds maintenance, aerodrome management and transport services.
Sodexo was short-listed for the contract in November, along with ISS Facility Services and Spotless Facilities Services, as reported exclusively by Business News.
Compass Group’s ESS Support Services Worldwide and listed company Broadspectrum (formerly Transfield Services) also bid for the work, but failed to make the short list.
Rio Tinto chief executive iron ore and Australia Andrew Harding said the contract would deliver significant cost savings, along with improved and consistent services across the Pilbara.
“We are continuing to identify safer, smarter and more cost effective ways that will best position our Pilbara iron ore business for the future,” Mr Harding said in a statement.
“The long-term contract with Sodexo offers many benefits, including improved services for our people, innovation and investment in systems, sub-contracting opportunities for local businesses and suppliers.”
Sodexo is one of four incumbent suppliers to Rio, and is expected to employ many of the workers displaced from the others.
These include ESS, which has a joint venture with indigenous business Eastern Guruma to manage some of Rio’s camps in the Tom Price area.
The other incumbents are believed to be ISS and Spotless.
Sodexo’s CEO mining worldwide, Johnpaul Dimech, said the Rio win was the largest contract the company had ever signed.
“We brought together a team of 100 people to work on this,” Mr Dimech told Business News.
“We’ve brought the best of Sodexo globally; we’re leveraging the expertise that comes from our operations in 80 countries.”
Singapore-based Mr Dimech said a key to Sodexo’s success was its ability to manage and integrate the broad range of services it provided.
He added that local and indigenous employment would be a priority, but was not able to provide any specifics.
The company’s latest Reconciliation Action Plan states that the company has achieved 10 per cent Aboriginal and Torres Strait Islander employment in its resources services business.
The Rio win comes four months after Sodexo was awarded a contract to run facilities on Shell’s Prelude Floating LNG facility, including accommodation management, waste management, housekeeping and laundry services.
It also holds contracts in Western Australia with gold miners Newmont Mining, Northern Star Resources and Gold Fields, Mid West iron ore miner Karara Mining, and Woodside Petroleum.
That makes Sodexo the fifth largest facilities management company in WA with 1,254 employees, according to the BNiQ search engine.
Nationally, Sodexo employs more than 4,000 people, while globally it has 420,000 employees in 80 countries, making it the 19th largest employer worldwide.
Sodexo will commence a phased implementation of the Rio contract from mid June.
Rio’s decision to appoint a single contract for all its Pilbara operations follows a similar move by Fortescue Metals Group in 2013.
FMG awarded six five-year contracts collectively worth $500 million to joint ventures between Brisbane-based Morris Corporation and five indigenous businesses, including Eastern Guruma and MIB Group.
