Environmental management technology company Envirosuite (ASX: EVS) has announced a noteworthy boost to its bottom line after receiving a “significant upgrade order” from Carbones del Cerrejon, a joint venture owned by BHP Billiton (ASX: BHP), Glencore (LSE: GLEN) and Anglo American (LSE: AAL).
Cerrejon is currently the largest coal mine in Latin America spanning over 690 square kilometres and ranks as the 10th largest coal mine in the world, producing around 32 million tonnes of coal each year.
Envirosuite has supplied Cerrejon and its neighbouring port facilities with its ‘Environmental Compliance’ and ‘Risk Management’ solutions for the past two years, with today’s announcement indicating that the relationship is not only expected to continue but that Cerrejon will become Envirosuite’s largest mining client.
Up until now, Envirosuite has provided tools assisting Cerrejon in managing compliance performance and risk of dust and air pollution caused by the mining and port operations. However, the latest upgrade expands the nature of their agreement to include more services and a higher net spend by the major miners.
Hefty Cerrejon potential
Envirosuite has said that the mine made two purchase orders for two additional solutions as well as associated equipment and installation and maintenance services, with a value of $600,000.
The new solutions are said to be the ‘Blasting’ solution and ‘Water Monitoring’ solution with the contract value further boosted by an “incremental recurring revenue fee” of approximately $160,000.
The company’s environmental solutions will enable Cerrejon to meet its increasing regulatory commitments and assist in its desire to improve its relationship with the community through improved management processes.
Meanwhile, the ‘Blasting’ solution will be used for simulating and managing the environmental impact of blasting activities at Cerrejon, including air blast overpressure, ground vibration and flyrock.
Through the Envirosuite platform, the mining operations will use predictive models to support the planning of blasting activities, as well as monitoring equipment to measure any potential impacts during “blasting events”.
“This will assist the mine in meeting its new regulatory requirement for its operational licence which mandates that blast monitoring equipment and a management system be adopted,” according to Envirosuite.
Last but not least, Envirosuite’s ‘Water Monitoring’ solution will enable Cerrejon to manage the real-time monitoring of water quality and run-off from the mine. The continuous surface water monitoring is an enhancement to ensure the compliance limits at the mine’s discharge points are met accordingly.
The expanded contract announced today will involve supporting Cerrejon’s existing operations which consist of an integrated facility that includes a large open cut coal mine, a railway and a port for exporting coal.
In a further sign of its growing commercial presence in Latin America, Envirosuite recently established a Colombian entity and is “investing in a local office”, the company said. The move is designed to help Envirosuite address the Latin American mining market from both its Chilean and Colombian offices.
The company’s Latin American revenue spree was boosted in July this year after it secured a subscription deal with Chilean agricultural giant Agrosuper for the use of its software-as-a-service (SaaS) platform.
The deal was signed for an initial six months at A$27,000 per month which equates to an annualised revenue of A$324,000 – representing the largest ever SaaS subscription in Envirosuite’s history and building on the company’s entry into the Latin American market.
“We are delighted with this upgrade which follows a year’s worth of consultation provided by Envirosuite and which now makes Cerrejon our largest mining client. Cerrejon is a cornerstone reference client in Latin American mining circles and has been working hard to adopt global best-practice in its environmental management practices. Our association with Cerrejon and increased presence means we are very well placed to build up our base of mining clients in the region,” said Peter White, CEO of Envirosuite.
Despite this morning’s upbeat contract news, Envirosuite shares were down around 1.5% by the start of the afternoon trade, trading at $0.069 per share.