WestStar Industrial subsidiary awarded $4.5m Rio Tinto contract
WestStar Industrial business SIMPEC Pty Ltd has been awarded a $4.5m contract by Rio Tinto Iron Ore.
Construction conglomerate WestStar Industrial (ASX: WSI) is continuing its project winning streak, announcing its wholly-owned subsidiary SIMPEC has been awarded a new $4.5 million contract with mining giant Rio Tinto (ASX: RIO).
This is the latest in a number of gigs recently won by the engineering contractor business and involves SIMPEC designing and constructing a remote draft survey system at Rio Tinto Iron Ore’s Cape Lambert Port facility in Western Australia.
It closely follows SIMPEC’s largest contract award to date – an $8 million deal to work on piping and insulation at the Tianqi Lithium Kwinana processing plant in WA.
The business is also engaged on another Rio Tinto site, having recently been awarded a $4 million contract by ATCO Structures and Logistics to supply and install electrical and communications systems for the miner’s West Angelas construction camp.
The Cape Lambert Port facility, located about 40km from Karratha in north west WA, has two terminals capable of shipping more than 185 million tonnes of iron ore per year.
According to WestStar, SIMPEC’s remote draft survey system is expected to increase ship turnaround and safety.
The work is due to commence this month with completion anticipated in the second quarter of 2019.
Over the past year, SIMPEC has tendered for more than $150 million of work with its order book for the 2019 financial year now standing at $30 million.
“To deliver an order book of $30 million only halfway through the year is a tremendous result for SIMPEC and the whole WestStar group,” WestStar director Philip Re said.
“SIMPEC is building great momentum and traction in the market and we look forward to the award of further contracts,” he added.
Other recent project wins include a $1.7 million contract at Iluka Resources’ (ASX: ILU) Cataby iron sands mine and various deals adding up to $2 million including work with the Salini Impreglio-NRW joint venture on the Forestfield-Airport Link project in WA.
Securing funds
Last week, WestStar told the market it had received commitments for a working capital facility of up to $1 million.
According to the company, the facility will ensure it is fully funded to “meet the short-term guarantee and cashflow requirements” of its recent contract wins.
Mr Re said the facility would also ensure WestStar would be “ready to scale if new contracts are awarded”.
WestStar advised the facility is unsecured and repayable within 12 months, with an interest rate of 10% payable on the drawn balance.