The upgrade is part of Xstrata’s $US407 million ATCOM East Project and is being delivered by Sedgman and Sedgman South Africa under a staged, tripartite contract with Xstrata South Africa.
The new contract follows on from the $A75 million design and supply contract awarded in November last year, taking the total value of work awarded to Sedgman on the ATCOM upgrade project to $A123 million.
“Securing this construction contract on top of the engineering and procurement contract has really cemented the opportunity for Sedgman to showcase its technology leadership, innovation and commitment to excellence in this new market and to drive the future growth of our business there,” Sedgman managing director Mark Read said.
The ATCOM upgrade will increase the CHPP’s capacity from 1000 tonnes per hour to 1700tph, lifting total annual production capacity of saleable thermal coal production to more than 5 million tonnes.
ATCOM project completion is targeted for the end of this year.
Also in Africa, Sedgman will undertake a feasibility study for a new coal mine project in Mozambique’s Moatize Basin.
“Sedgman has already been working with Brazilian mining house Vale on its multi-billion dollar Moatize coal project in Mozambique and Riversdale Mining’s nearby Benga coal project,” Read said.
“This new study is for one of several regional projects in the company’s project pipeline which would largely be delivered through Sedgman South Africa’s expanding operations in Johannesburg where almost 30 staff are now based.”
Sedgman Coal chief operating officer Steve van Barneveld has been stationed in Johannesburg to coordinate development of the company’s operations in South Africa, support existing and new contracts and establish a permanent, locally-based leadership team.
“Sedgman South Africa continues to be developed as the central hub for all operations on the African continent and is expected to mature into a self-sufficient business, providing the region with a preferred engineering and project delivery service” Van Barneveld said.
Sedgman was trading up 0.65% mid-morning today at $A1.54.
Read said wining the new ATCOM construction contract supported Sedgman’s positive outlook, particularly for FY2011 and beyond as global business conditions improved.
“We expect to continue to grow our order book and capitalise on the increasing number of project opportunities both in Australia and abroad,” he said.
Sedgman is recognised internationally for its coal processing and materials handling technologies and is currently focused on a $5.5 billion global pipeline of targeted project opportunities in coal and metals.