WATPAC SECURES $300M DEAL IN WA
Written on the 27 April 2010
WATPAC Limited (WTP) continues to diversify it business after signing $300 million in contracts with a Western Australian miner.
The deal with BC Iron Limited (BCI) includes mining, crushing and screening activities at the Nullagine Iron Ore Joint Venture, as well as the continuation of the haul road construction project.
Managing director Greg Kempton (pictured) says the deal keeps the company on track towards its goal of $1.3 billion revenue this year, which would require more than $100 million each month.
“Just because we won a $300 million contract it doesn’t mean we’re $200 million in front, but if you average it out over the last six months it puts us on target as a group,” he says.
“It’s certainly a relief, but when I say relief it’s more of a satisfaction because we have targeted certain sectors of industry and one is iron ore. What’s also satisfying is that we were given the haul road contract and then they asked us to carry out the mining contract.”
The haul road contract is expected to start in June while the mining contract is set to begin in September with a five-year time period.
BC Iron’s Nullagine project is in a 50 per cent joint venture with Fortescue Metals Group (FMG).
“The Nullagine Iron Ore Joint Venture project is indicative of the impressive growth in the scope and complexity of the mining projects undertaken by Watpac in recent times,” says Kempton.
“It is also demonstrative of the success of our capital-raising venture in late 2009, which has allowed us to pursue a much wider range of projects in this sector.”
Kempton says the contracts also help Watpac assert its footprint in the ore rich west.
For BC Iron managing director Mike Young, the contracts are crucial for the long-term success of the project.
“We’re very pleased to be able to award these vital contracts to Watpac, who have considerable experience in the industry,” he says.
“With their help, we are looking forward to becoming the Pilbara’s next producer and exporter of iron ore later this year.”
WTP shares rose 5.4 per cent today to $1.47.