Suppliers News (May 01, 2006)

Caterpillar profits skyrocket

Caterpillar (CAT-N) says quarterly profits rose 45% and predicts even better things at fiscal year-end, thanks in large part to continued demand for commodities.

The Peoria, Ill.-based company posted a first-quarter profit of $840 million, or US$1.20 per share, up from $581 million, or US81, in the corresponding period of 2005. Sales tallied to US$9.39 billion, an increase of 13%.

On the strength of the robust quarter, Caterpillar now forecasts that its full-year earnings will clock in somewhere between US$4.85 to US$5.20 per share, a boost of US20 either way over earlier predictions. Sales are expected to hit US$40 billion for the full year.

Shares in the company trade in a 52-week range of US$40 to US$80.

Caterpillar builds heavy equipment for mining and construction companies, as well as diesel engines and gas turbines for power generation. These days, mining and construction companies need more earth-moving equipment to increase production and take advantage of record commodity prices, including a gold price exceeding US$600 per oz.

Quadrem does deals worth $1M every hour

The number of purchase orders flowing through Quadrem, an Internet-based transaction hub for suppliers of all shapes and sizes, reached an all-time high of 180,000 orders worth US$1.1 billion in March, a sharp increase from 117,000 orders worth US$489 million placed during the same month a year earlier.

“We’re supporting transactions worth more than one-million dollars (US) every hour,” says Quadrem CEO Charles Jackson.

The company recently reported two consecutive years of revenue growth exceeding 60%. All the orders placed through Quadrem in 2005 were worth a combined US$7.2 billion.

Quadrem was launched in 2000 and has locations in Australia, Brazil, Canada, Chile, Mexico, Peru, Saudi Arabia, South Africa, and the U.S.

Aker Kvaerner to help expand Boddington

Norwegian engineering firm Aker Kvaerner and Aussie contractor Clough Murray & Roberts (CMR), through their AKCMR joint venture, will expand the Boddington gold project in Western Australia, situated about 130 km southeast of Perth.

The contract is worth A$111 million (US$82.5 million), with Aker Kvaerner subsidiary, Aker Kvaerner Australia, taking home about 60% — roughly A$66 million (US$49 million). The contract comes on the heels of a completed pre-engineering contract worth A$4 million (US$2.9 million).

Aker Kvaerner will design and build facilities at the largely oxide operation for treating primary ore at a rate of about 35 million tonnes per year to produce around 850,000 oz. gold and 200,000 tonnes copper annually. Part of the expansion will include the use of high-pressure grinding rolls.

The bulk of the engineering work for the process plant at Boddington will be done through Aker Kvaerner’s office in Chile.

“This is a great opportunity for CMR and Aker Kvaerner to develop a significant international-scale project in Western Australia for major resource clients,” says Tom Quinn, managing director of Aker Kvaerner Australia.

Two-thirds of the Boddington project is held by Newmont Mining (NMC-T, NEM-N), with the balance owned by AngloGold Ashanti (AU-N). Initial production is expected in late 2008. The project has an estimated mine life of more than 15 years, with Newmont’s share of annual production expected to be about 700,000 oz. gold for the first five years of production, and average around 600,000 oz. over the life of the project, with cash costs of about US$210 per oz.

Thiessen Team to sell drilling business

Langley, B.C.-based Thiessen Team will sell its global rotary and raise-bore drilling business to Atlas Copco, one of the world’s largest suppliers of mining equipment. The acquisition gives Atlas Copco yet another product to offer its customers.

Thiessen Team has supplied the mining industry with drilling equipment for about 50 years. The new company will likely be called Atlas Copco Thiessen.

Thiessen says its operations will continue as before and that existing sales staff and other contacts will remain the same.

The Thiessen business unit that sells breakers, booms and mobile equipment is not part of the sale, and neither is Thiessen Team USA, which operates a shotcrete manufacturing operation south of the border.

Fluor to build power plant in Nevada

California-based engineering firm Fluor (FLR-N) will design and build a 200-MW, coal-fired power plant in Eureka Cty., Nev., for Newmont Mining (NMC-T, NEM-N). The contract is worth US$400 million.

Some employees in Fluor’s Greenville, S.C., office began initial work on the project in 2004 after getting the go-ahead from Newmont. The recent announcement made everything official.

The plant will provide a low-cost and reliable supply of electricity to Newmont’s Nevada mining operations, including the Midas, Lone Tree and Twin Creeks mines. The power plant will go on-stream in 2008 and is designed to exceed the Environmental Protection Agency’s stringent guidelines for emissions.

Headquartered in Aliso Viejo, Calif., Fluor reported revenue of US$13.2 billion in 2005.

Semafo buys Mana fleet

Montreal-based Semafo (SMF-T) has bought a fleet of heavy equipment for its Mana gold project in Burkina Faso.

The $8.6-million fleet was bought from a Komatsu dealer there and is similar to the one recently purchased for the companys Kiniero project (T.N.M., April 21-27) in Guinea. Semafo also secured a supply of tires and spare parts for maintenance and repairs.

The purchase follows a detailed in-house study that concluded that the company could save as much as 35% in operating costs by buying and operating its own heavy equipment.

The fleet will consist of two excavators, three dozers, 10 haul trucks, a grader, two wheel loaders and a water truck. The equipment should start arriving before year-end.