Calibre sees coal potential

INDEPENDENTLY-owned engineering firm Calibre Global has been quietly building a strong presence in the Australian resources industry since its formation in 2002. The growth is set to continue after Calibre took full ownership of its rail engineering joint venture and now has coal rail infrastructure squarely in its sights.
Calibre sees coal potential Calibre sees coal potential Calibre sees coal potential Calibre sees coal potential Calibre sees coal potential

The Coppabella coal mine in Queensland's Bowen Basin supplies 30% of the global pulverised coal injection market.

Kristie Batten

The company’s growth has been so rapid it became the fastest growing private company in Western Australia in 2005.

Calibre has four divisions – projects, safety, controls and rail – and employs more than 650 people across its Perth, Adelaide and Brisbane offices.

The company has completed 11 major iron ore projects in the Pilbara, including Rio Tinto’s massive Yandi mine.

The Calibre Engenium Rail Joint Venture also has a tight hold on the Pilbara.

The JV was formed in 2005 and has become one of Australia’s largest heavy haul rail engineering providers, making a particularly large impact on WA’s iron ore sector.

It employs more than 280 personnel and generated revenue of around $A100 million in the 2009 financial year.

The JV completed the Lang Hancock rail project for the Rio-Hancock prospecting Hope Downs JV and is currently working on Rio’s Brockman 4 and Mesa ‘A’ rail projects.

The company is also signed up to complete all the rail engineering work associated with BHP Billiton’s iron ore expansion projects in the Pilbara.

The rail duplication project is underway as part of BHP’s Rapid Growth Project 5.

Calibre Engenium is also carrying out work on the Oakajee rail project and Murchison Metals’ Jack Hills rail feasibility study.

The JV has a growing presence in Queensland after being awarded the value engineering study for a new 210km rail line for the Surat Basin JV, while Hancock has also engaged the company to complete a prefeasibility study on a proposed rail line for the Alpha coal project.

The sale of its stake will allow Engenium to focus on its core business of developing new mining projects for junior companies.

As part of the deal, Engenium has agreed to limit its activity in the rail sector.

Engenium directors Damir Panzich and Greg O’Rourke – who was also the JV’s managing director – have resigned from the board, but will continue to work for Calibre Rail.

The acquisition of Engenium’s 50% stake will see Calibre integrate the JV operations into its existing rail business, which is expected to deliver improvements and synergies in the areas of project delivery, quality assurance and financial and client management.

“However, the key driver for the deal was about providing a better service to the client by offering a fully integrated mine to port capability,” Calibre managing director Rod Baxter said.

Baxter, perhaps best known for his role as MD of Consolidated Minerals prior to its takeover, was appointed MD of Calibre in July last year.

He said Calibre has designed and delivered most of the heavy haul rail projects in the Pilbara over the past five years.

“The rail venture has built a team of over 280 rail engineering and project delivery specialists,” he said.

“We see significant opportunities to leverage our skills in the delivery of major rail engineering projects to other bulk commodity transportation projects, particularly rail infrastructure in the coal sector.”

Baxter said the company would look at other regions as part of its growth plans for Calibre Rail.

“Our skill portfolio provides for us a platform to pursue opportunities in new geographic markets such as Africa and the subcontinent, as well as broaden our product offering both up and downstream on the mining value chain.”

Overall, Baxter said Calibre had a strong order book and expected substantial growth.

“Any further acquisitions will contribute significantly to what is already a strong organic growth outlook,” he said.

“We are looking to expand our presence and capability in the industry sectors of iron ore, bulk commodities and rail infrastructure, and enable further geographic and commodity diversification, particularly into high-growth markets and sectors.”

The company has not ruled out an initial public offering in the future.