Resource Generation subsidiary Ledjadja Coal has awarded Sedgman $US310 million ($418 million) of mineral processing contracts.
Under the agreement, CIMIC-owned Sedgman will be responsible for the design, civil, structural, mechanical, piping, electrical and commissioning works of Ledjadja Coal’s Boikarabelo Coal Handling and Preparation Plant (CHPP) in South Africa.
The Boikarabelo operation consists of an open cut coal mine in the Waterberg coal fields of Limpopo province. The mine has an expected annual production of 6 million tonnes (Mt) of coal.
Sedgman managing director Grant Fraser said, “We are pleased to be able to deliver our whole-of-life approach to this important project – building the processing plant and providing ongoing operational involvement for Resource Generation, and its South African subsidiary Ledjadja Coal.”
The contract, on top of ancillary works contracts, will give Sedgman a revenue of approximately $US210 million over 26 months.
Further, Sedgman will take over control of the plant’s ongoing operations and maintenance, which will give the ASX-listed company a further $US100 million of revenue over four years of post completion work at the facility.
Debt providers of the Boikarabelo operation are in the final process of receiving credit approvals. Once funding has been finalised, Ledjadja Coal is expected to commence its operation.
The coal mine has both export and domestic offtake agreements in place for the first seven years of production, with a significant proportion already secured for the following 30 years.
In the past, Sedgman also engineered, procured and constructed Peabody’s JV Moorvale coal mine, Evolution Mining’s Mungari gold mine and one of the world’s largest gold mines, Guyana Goldfields’ Aurora project.