Engineering and construction company Civmec (ASX: CVL) has been awarded a key contract at the Iron Bridge Project, Australia’s largest magnetite resource, owned by joint venture partners Fortescue Metals (ASX: FMG) and Formosa Steel.
The contract will see Civmec’s Metals & Minerals division construct structural concrete components for the Project’s dry plant which will include ore crushing areas, screening areas, grinding areas and ore stockpile. All together, it will involve more than 350,00m3 of earthworks.
To fulfill the contract, Civmec will employ more than 200 skilled workers to engineer more than 5,000 tons of steel reinforcement and 38,000m3 of concrete.
“Through our current delivery of works for Fortescue in the Pilbara, we have formed a strong working relationship built on transparency, trust and collaboration and reliable execution. Hence, we are extremely pleased to be given this further opportunity to continue to work with Fortescue on the Iron Bridge project,” said Civmec CEO, Patrick Tallon.
“The Iron Bridge Joint Venture has demonstrated and refined each step of the magnetite ore processing system and conducted full-scale trials to ensure the effectiveness of the process and gain confidence in the overall project success.”
In total, the Iron Bridge Project has a declared value of USD $2.6 billion and will play a major role on the global metals market courtesy of the 716 million tonnes of ore reserves comprising high grade iron (60%+ Fe).
The mine is expected to support annual production of 22 million tonnes per annum and is located in the Pilbara region, 145km south of Port Hedland.
While Civmec did not declare the specific value of this contract awarded, it has increased their current order book to approximately AUD $901 million. Works at Iron Bridge will commence immediately with Civmec hoping to complete their Iron Bridge engagement by March 2022.
In the 9 months up to 31 March 2020, Civmec has reported $261m in sales revenue for $28m gross profit across their Oil & Gas, Mining & Minerals, and Marine & Defence divisions.
The Iron Bridge contract continues a recent string of wins for Civmec which last month was awarded a contract by the Australian Marine Complex to build a new submarine facility in Western Australia which will become the primary base for all Australian Defence Force personnel operating in the Indian Ocean.
CVL shares responded well to news of the contract to open at $0.45, a 12.5% rise on their previous $0.40 close.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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