Suppliers Roundup (August 16, 2004)

Fluor cashes in at Escondida

Engineering firm Fluor will receive US$700 million in return for engineering, construction and procurement services at the Escondida copper mine in northern Chile.

The contract was awarded by Minera Escondida, a Chilean company owned by an international consortium led by Melbourne-based BHP Billiton and London-based Rio Tinto.

A proprietary leaching process will be applied to marginal run-of-mine sulphide ore from the Escondida pit and a second, nearby pit under development.

The pregnant solution will be further treated by solvent-extraction and electrowinning facilities, supplied by Fluor, to produce copper cathode. Production is slated to begin in the second half of 2006.

Included in the project is a seawater desalination plant and pipeline, which will provide additional water to Escondida.

The project is the latest in a series of major projects at Escondida awarded to Fluor since the company was commissioned to design and build the original mine and processing plant in 1988. Fluor has offices in Santiago.

BHP Billiton owns 57.5% of Escondida; Rio Tinto, 30%; Japan-based JECO, 10%; and International Finance Corp., 2.5%.

Fluor had revenue of nearly US$9 billion in 2003.

Atlas Copco buys bit maker

Atlas Copco continued its 2004 spending spree by signing an agreement to acquire Baker Hughes Mining Tools, U.S.-based maker of drill bits and other tools for mining and oil exploration. The purchase price was not disclosed.

The acquisition will give Atlas Copco a greater selection of drill bits for companies looking beyond its Secoroc line of drilling tools.

Baker Hughes is a division of Houston-based Hughes Christensen and had revenue of US$40 million in 2003.

“The acquisition will strengthen our position in raise-boring consumables and allow us to enter into the rotary drilling consumables market for surface mining,” says Bjrn Rosengren, an executive with Atlas Copco.

Baker Hughes specializes in designing and making drill bits for rotary drilling and raise-boring. Its head office and manufacturing plant are in Grand Prairie, Tex.

Earlier this year, Atlas Copco acquired Ingersoll-Rand Drilling Solutions, a division of Bermuda-based Ingersoll-Rand Co., for roughly US$225 million. A month later, Atlas Copco’s Spanish unit purchased industrial rental firm Guimera.

The Baker Hughes deal has yet to be approved by regulators.

AMEC gets Pogo go-ahead

London-based engineering firm AMEC will build the US$280 million Pogo gold mine and related facilities in Alaska on behalf of Teck Cominco and Japan’s Sumitomo Metal Mining.

Situated 150 km southeast of Fairbanks, Pogo will be developed as a 2,500-ton-per-day underground mine and mill. Annual production over the projected 10-year mine life is pegged at 350,000-500,000 oz. Annual production during the first three years of commercial production is expected to be 460,000 oz. gold. Startup is slated for March 2006.

AMEC has worked on the Pogo project since 1998 and recently completed a final feasibility study.

“Teck Cominco is a key and long-term client to AMEC,” says Tim Watson, senior vice-president of AMEC’s mining and metals unit.

Teck Cominco budgeted US$75 million for development spending in 2004, most of which was earmarked for Pogo. The project is held 40% by Teck Cominco, 51% by Sumitomo Metal Mining, and 9% by Sumitomo.

AMEC specializes in bringing mining operations into production. AMEC had revenue of US$8.4 billion in 2003.

Telus to deliver SPOT images

Vancouver-based Telus Geomatics is the exclusive marketer and dealer of SPOT satellite imagery in Canada under a recent deal with Iunctus Geomatics of Lethbridge, Alta.

The SPOT system derives its name from the SPOT 5 satellite, which is capable of producing image resolutions of the earth measuring up to 2.5 metres in width while continuing to maintain a large, 60-by-60-km image footprint.

The images allow geologists to collect geologic and structural terrain information before setting foot on a given landscape, thereby reducing the time and costs associated with field exploration.

Customers can buy the imagery directly or simply access it using GeoExplorer, Telus’s web-based geographical information system. For example, GeoExplorer allows users in mining, energy, and forestry sectors to view, edit and manage map data on any computer connected to the Internet.

“This partnership provides our customers with cost-effective alternatives to purchase or access current satellite imagery,” says James Huff, general manager of Telus Geomatics.

Telus is the second largest communications firm in the country, with revenue of more than $7 billion in 2003.

Formed in 2000, Iunctus Geomatics is a supplier of optical satellite imagery in Canada.

Jacobi buys into carbon maker

Jacobi Carbons, a privately owned Sweden-based activated carbon manufacturer and supplier, has acquired a majority shareholding in Sri Lankan-based Bieco Link Carbons.

Bieco Link Carbon operates a coconut carbon production plant in Sri Lanka employing multiple activation technologies. As a result of the acquisition, Jacobi doubles its coconut-activated carbon capacity and expands its product line of coconut activated carbons.

Activated carbons are used in the gold recovery process.

Jacobi Carbons is a manufacturer and supplier of activated carbons produced from coal, coconut and wood.