The past 12 months have been an upwards journey for construction and engineering company SRG Global (ASX: SRG). Following an $80 million contract with two US companies, SRG has secured another win as its aboriginal joint venture “Bugarrba” gains a five-year term contract with Aussie mining giant Fortesue’s Iron Bridge site, worth $40 million.
The five-year-term contract with Iron Bridge—an unincorporated joint venture between Fortescue Metals Group (ASX: FMG) subsidiary FMG Iron Bridge and Formosa Steel IB — comprises a master agreement for maintenance and shutdown services to provide engineered scaffold services across its new magnetite project in Western Australia.
As part of the Iron Bridge Magnetite Project, Iron Bridge will deliver 22 million tonnes per annum of high grade 67% iron magnetite concentrate product. The site includes the world class North Star and Glacier Valley magnetite ore bodies, located 145km south of Port Hedland.
The contract is expected to begin in early 2023 as Iron Bridge aims to ramp up its full production run rate following March 2023.
Terry Wilson, Bugarrba Board Member commented “Bugarrba are excited to secure another important contract for the Njamal people and are looking forward to working with Iron Bridge Operations located on the traditional lands of the Njamal people”
Bugarrba is a joint venture with members of the Njamal People and SRG Global. The traditional land of the Njamal people covers 42,000 square km within the Pilbara and its name means ‘Country’ in the Njamal language. Bugarrba aspires to provide sustainable employment opportunities to its people and Aboriginal people more broadly. This aligns with Iron Bridge’s vision, too.
A crucial aspect of Iron Bridge’s project is the involvement of local and indigenous people. Given that, the company actively looked for vendors that fit the criteria. Suffice it to say, this contract is a win-win for both companies.
SRG Global Managing Director, David Macgeorge, shared, “SRG is tremendously proud of our Bugarrba joint venture, seeing its continued success and contribution to Aboriginal people, and working with Iron Bridge Operations, on what is such an innovative project for Western Australia.”
FY22 has been a year of profitable partnerships for SRG. In July 2022, the Company secured a $90 million contract with Northern Star and Meridian Energy in Western Australia and New Zealand. In September 2022, it secured two contracts worth $80 million with Alcoa and Albemarle.
The Company also reported an underlying EBITDA of $57.2m, up 22% on FY21, with its revenue amounting to $644.2 million. Given that nearly all of its contracts are over three-years-long, SRG forecasts a growth of 25% in FY23. Evidently, the contract with Iron Bridge is one of the many SRG has earned this year. In fact, as of June 30, 2022, the Company has record work in hand worth $1.3 billion, an increase of 30% since 30 June 2021. SRG has its eyes set on diversifying its portfolio and staying on track with its growth strategy.
Alinda is a Business Reporter for The Sentiment
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