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Downer wins $100M in BHP contracts

BHP Billiton Iron Ore has agreed to $A100 million in contracts with Downer EDI for work on the mi...

Justin Niessner

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Downer was awarded two contracts, including $40 million of work on a rail package for BHP’s ore car repair workshop and $60 million of work on Port Hedland shiploaders.

The contractor will upgrade two conveyors at BHP’s Nelson Point port operation, followed by deconstruction of the site’s existing shiploaders.

BHP approved a $US301 million ($A346 million) investment in November to replace two shiploaders at Nelson Point, both more than 40 years old.

The new 12,500-tonne-per-hour loaders are expected to increase reliability of the inner harbour facilities, contribute to debottlenecking initiatives and increase BHP’s supply chain capacity towards 270 million tonnes of iron ore per annum.

Final work for the Downer contract is expected to be completed in the first half of 2015.

Downer’s rail package with BHP involves the design and construction of rail works for the miner’s ore car repair shop.

This includes the design of a signalling and communications system, construction of new track equipment rooms, and new cable and routes.

The shop represents part of the Mooka marshalling yards 33km south of Port Hedland.

Development at Mooka has been part of a BHP expansion plan in the area, which comprises additional berths at Burgess Point, a car dumper at Finucane Island and optimisation of Port Hedland’s inner harbour.

Downer said its work on the rail contract was expected to be completed in the second half of 2014.

Progress at Mooka last year included engagement of a consortium including Laing O’Rourke, John Holland and NRW as well as infrastructure development company Georgiou Group to establish camp accommodation, villages and rail works

Contractors NRW Holdings and Calibre Group were also brought in to develop the project.

For Downer, the award follows an $A80 million contract last month for electrical work at Rio Tinto’s Yandicoogina mine.

At Hancock Prospecting’s Roy Hill iron ore project, Downer also recently scored a $500 million contract for 4.5 years of infrastructure construction and full-scale mining.

The contractor has said that the capital needed for its work at Roy Hill over the 2015 financial year was expected to be $110 million, including $40 million for new equipment and $70 million provided from existing equipment.

Shares in Downer were last trading 3.1% higher at $5.

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