Monadelphous-Lycopodium JV wins $400m Rio Tinto contract

Rio Tinto ASX LYL MND Mondium Lycopodium Monadelphous Western Turner Syncline
Rio Tinto has awarded Mondium a major contract to design and construct its Western Turner Syncline phase two mineral processing facilities in WA.

Iron ore mining giant Rio Tinto (ASX: RIO) has awarded a major engineering, procurement and construction (EPC) contract worth $400 million to a Western Australian joint venture between Monadelphous (ASX: MND) and Lycopodium (ASX: LYL).

Under the deal, Perth-based EPC company Mondium, in which Monadelphous owns 60% and Lycopodium holds 40%, will design and construct the Pilbara miner’s Western Turner Syncline phase two mine near Tom Price.

Mondium has been contracted to carry out all engineering design, procurement and site construction works associated with the development, including the process plant, overland conveyor and non-process infrastructure.

Work will begin during the current quarter and is expected to be completed in 2021.

Mondium will work closely with Rio to provide local employment and business opportunities in the region, the joint venture company stated.

Monadelphous managing director Rob Velletri said being chosen to partner with Rio to deliver these mine expansion works was a “great achievement” for Mondium.

“The award illustrates the strong progress Mondium has made in cementing itself as a preferred and trusted provider of EPC services,” he said.

Lycopodium managing director Peter De Leo added that the award further strengthened his company’s relationship with Rio, as it has successfully delivered numerous projects for the miner over the years.

Rio’s $1 billion upgrade

The Western Turner Syncline phase two project is part of Rio’s Greater Tom Price operations, where it approved a $1 billion investment in November.

The investment is intended to maintain production and cut costs at the mine and is expected to facilitate the mining of existing and new iron ore deposits, the construction of a new crusher and a 13km conveyor.

Rio said the new conveyor system is also expected to lower greenhouse gas emissions from the mine by 3.5% compared to road haulage options.

With construction scheduled to start this quarter, first ore from the crusher is anticipated in 2021.

Monadelphous’ recent contract wins

Today’s announcement adds to the $110 million worth of construction and maintenance contracts Monadelphous has already secured in the resources and energy sectors this month.

In early January, the engineering company announced it had been awarded several new contracts with BHP (ASX: BHP) including upgrading equipment at the Mining Area C iron ore mine site in the Pilbara, services associated with demolition and rehabilitation of facilities at Nelson Point in Port Hedland, and a 12-month extension for maintenance and shutdown services at the Kalgoorlie nickel smelter.

Monadelphous’ recent wins also include a three-year contract with Incitec Pivot (ASX: IPL)  in Queensland and a contract with thyssenkrupp at BHP’s South Flank project in WA.

Back in November, Monadelphous secured a five-year $100 million contract with Rio for mechanical and electrical maintenance services including shutdowns and scaffolding at the miner’s Pilbara iron ore operations.

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