Oakajee still on the cards: Barnett

Sinosteel Midwest, the local subsidiary for Chinese giant Sinosteel, said it would park the project “until certainty around the Oakajee Port & Rail development can be resolved”.The company had made no secret of its disappointment over delays for first start up at OPR, which has now been pushed out to the end of 2015.However, The West Australian quoted Barnett as saying while he couldn’t give assurances about timelines, the project remained one of the state’s major developments going forward. He also knocked back speculation that the decision represented a move by the Chinese to gain ownership in the project. “I don’t believe it’s that, but China in a broad sense, through its state-owned enterprises, is keen to be a direct participant in the Oakajee development,” the newspaper quoted him as saying. “I don’t underestimate the intensity of the commercial negotiations taking place. “This is a big roll of the dice for a number of companies. The state government has a stake in this, so does the Commonwealth, because it is so important to this state and this nation. As I have said for years, this project will never be easy.” Fears the magnetite iron ore sector may be under threat following the uncertainty over Oakajee have been quashed by Magnetite Network executive director Megan Anwyl. “It’s obviously a challenge for OPR to have one of their three foundation customers pull out, but I don’t think that we should be calling the end of the magnetite industry,” she said. “I think what is interesting is what the state government is going to do in the OPR context, given the deadline is coming. “It is an unwelcome complication for financing for OPR and Oakajee port but there have been a lot of uncertainties around the timeline there anyway.” Gindalbie Metals, one of the other two foundation customers and a member of the Magnetite Network, threw its support behind the Oakajee development and said it would continue to be engaged in talks with all parties involved. Gindalbie requires the development of Oakajee port for production beyond its anticipated Stage 2 expansion to 16Mtpa.Meantime, Padbury Mining believes Sinosteel’s decision to suspend development of Weld Range was understandable given the uncertainty over the Oakajee development. Padbury managing director Gary Stokes said the company shared Sinosteel’s concerns about the Oakajee development, which was why its shareholders approved the purchase of intellectual property developed by Yilgarn Infrastructure.“This purchase was intended to provide Padbury with a “plan B” to contribute to a possible infrastructure solution for the Mid West, should the current provider OPR not be able to deliver the project in its current form,” he said. Sinosteel’s shelving of Weld Range comes only days before Murchison was due to release feasibility studies for the OPR and Jack Hills expansion projects. Murchison and Mitsubishi have also received pressure over rising costs from the Oakajee project with speculation the cost figure could be above $7 billion.Murchison entered a trading halt yesterday afternoon to give it time to consider Sinosteel Midwest’s announcement.Murchison is expected to make an announcement before start of trading on Monday.

Weather hits Watpac profits

The Brisbane-based company said consolidated profit for the six months to December 31 was likely to fall in the range of $3-5 million after tax, much lower than the $10.4 million profit reported in the previous corresponding period.If the wet weather continues into the current quarter, Watpac said it was unclear whether its full-year results would exceed the previous year’s figure of $26.9 million.The company will provide a full-year guidance once the full impact of the weather is known.Production volumes for Watpac’s mining contracts in the Bowen Basin have been below budget and weather-related provisions for stand-down costs on those jobs have now been exceeded.The company said a civil project in Victoria had also been hit by the wet weather, resulting in difficult ground conditions.“While I expect the remainder of FY11 to be a challenging year for the contracting businesses in light of ongoing weather-related disruptions, Watpac continues to deliver on its long-term strategy of building our forward order book and delivering on the first of a number of property disposals which will return equity to the group,” Watpac managing director Greg Kempton said.Watpac currently has work on hand totalling $1.6 billion and says it is well positioned to capitalise on rebuilding opportunities in Queensland following the floods.The company is also expecting mining companies in the Bowen Basin to accelerate production to make up for lost output.

Barrick settles gold mine quarrel

Seymour Whyte and Clough were joint venture partners for the civil works at the $400 million project, completed in 2007.Claiming they had been underpaid on the contract, the JV partners won $17.6 million from Barrick in an adjudication under NSW security of payment legislation in 2008.Barrick took the fight to the Western Australian Supreme Court, commencing litigation to recover $8 million and attracting a $4.2 million counterclaim from the JV partners.The dispute had been in mediation.In a statement to the Australian Securities Exchange on Friday, Seymour Whyte said it had paid Barrick $950,000 in a settlement.Seymour Whyte company secretary Rob Leacock said he was unable to reveal the causes of the original dispute due to confidentiality agreements in the settlement. Seymour Whyte shares have slipped slightly to $1.08 since the company debuted at $1.10 on the ASX late last month.Leacock said the company was pleased with its market performance so far given the negative effect the resources super-profits tax had had on construction stocks.“We’re very pleased, but not altogether surprised because we always thought the pricing was conservative,” he said.

Industry Report – Projects

NEW SOUTH WALESRAILSouth West Rail Link – Glenfield Transport Interchange (Current)Principal: Transport Infrastructure Development CorporationScope: Glenfield station upgrade and bus/rail interchange, Glenfield Junction rail flyover, rail works, Glenfield multi-storey car park, Glenfield South substation and Seddon Park commuter carparkStatus: Shortlisted tenderers announced for rail track extension between Glenfield south and Leppington, includes new stations at Edmondson Park and Leppington, commuter carparking at both new stations, train stabling facility, May 2010. Project completion end 2015Contractors: Shortlist for track extension Glenfield South and Leppington – Leighton Abigroup Joint Venture, John Holland, Laing O’Rourke Australia Construction. Glenfield Junction Alliance made up of TIDC, MVM Rail, Macmahon, Bouygues Travaux Publics and Parsons Brinckerhoff (Glenfield station upgrade and bus/rail interchange, Glenfield Junction rail flyover), RailCorp and Novo Rail (rail works), North Shore Paving (Seddon Park carpark), St Hilliers (Glenfield multi-storey carpark)Value: $619 million (part of $2.1 billion project)(Update: State government announcement of shortlisted tenderers, May 2010)NEW SOUTH WALESRAILMajor Infrastructure for Broken Hill (Proposed)Principal: Australian Rail Track CorporationScope: Re-rail lines between Whyalla and Broken Hill and between Parkes and Broken Hill to allow both lines to be used by heavier trains (value $312 million). Replace old wooden sleepers on line between Parkes and Broken Hill with 1 million new concrete sleepers (value $253 million)Status: Federal government announcement of project, May 2010; construction commencing later in 2010Contractor: NAValue: $565 million(New project: Federal government announcement of project, May 2010)NEW SOUTH WALESRAILLight rail Lilyfield and Dulwich Hill, Sydney (Proposed)Principal: Transport and InfrastructureScope: 5.6km light rail extension from Lilyfield and Dulwich HillStatus: Preconstruction study available for three weeks of community consultation, following which state government to determine scope of work and develop environmental assessment for discussion. Submissions close June 7, 2010Contractors: NAValue: NA (first step in rollout of Sydney’s $500 million light rail expansion and part of NSW government’s $50.2 billion Metropolitan Transport Plan) (Update: State government announcement of project status, May 2010)QUEENSLANDENERGYAustralia Pacific LNG (APLNG), Laird Point, Curtis Island, Gladstone (Proposed)Principal: APLNG (Origin Energy, ConocoPhillips)Scope: 3.5 million tonne per annum increasing to 14-16Mtpa LNG four-train gas processing plant and associated facilities where gas will be cooled and liquefied for shipping overseas, gas transmission line to Queensland coastStatus: Final investment decision targeted for end 2010; first LNG to international markets in 2014Purpose: Further develop APLNG’s CSG fields, export to international markets, supply to power stations, industry and for domestic heating and cooking, create 5000 jobs during construction and 1000 jobs during operation of projectContractors: NA (Origin responsible for development and management of CSG facilities and pipeline, ConocoPhillips responsible for construction and management of LNG plant)Value: $35 billion(Update: Origin Energy announcement on status of FID, May 2010)QUEENSLANDWATERConnors River Dam and Pipelines Project, near Mt Bridget (Proposed)Principal: SunWaterScope: Dam with yield up to 49,500 megalitres per annum of high-priority water, 133km pipelineStatus: SunWater is expecting strong demand for water from dam due to increasing resources expansion in the Galilee and Bowen basins, and has called for foundation customers to reserve high-priority allocations, May 2010. Construction commencing mid-late 2011; water available from 2014Contractors: NAValue: $824 million(Update: SunWater call for water reservation from foundation customers, May 2010)VICTORIAROADSPrinces Highway duplication between Traralgon and Sale (Current)Principal: Roads and Ports, TransportScope: Rebuild road with two lanes in each direction, raised central median, safety improvements at four intersections. Stage 1, 1.5km stretch of highway between Traralgon-Maffra Road and Stammers Road in Traralgon East. Stage 2, upgrading 4.5km section between Wurruk and SaleStatus: State government has committed $35,000 to project in 2010 state budget; tenders advertised for Stage 2; work commencing 2010Contractors: Stage 1 (Fulton Hogan)Value: $175 million (federal government $140,000, state government $35,000)(Update: State government announcement of project status, May 2010)VICTORIARAILCardinia Road Railway Station, Melbourne (Proposed)Principal: Transport, Metro TrainsScope: Two platforms with passenger shelters and seating; pick-up bays for buses, taxi rank; park and ride facility, drop-off zone; electronic timetable and passenger information displays; closed-circuit camera security surveillance; pedestrian and bicycle access; underpass linkStatus: Call for tender closes June 11, 2010Contractors: Arup, Cox (architects)Value: Part of $220 million New Stations in Growth Areas program(New project: State government announcement of project, May 2010)VICTORIARAILLynbrook Railway Station, Melbourne (Proposed)Principal: Transport. Metro TrainsScope: Passenger shelters and seating; bus stops, taxi rank; park and ride facility, drop-off zone; electronic timetable and passenger information displays; closed-circuit camera security surveillance; pedestrian and bicycle accessStatus: Call for tender closes June 11, 2010Value: NA (part of $220 million New Stations in Growth Areas program)(New project: State government announcement of project, May 2010)VICTORIABUILDINGMen’s Prison, Ararat (Proposed)Principal: CorrectionsScope: Construct 350-bed men’s prisonStatus: Construction contract awarded to Aegis Consortium, May 2010; construction commencing 2010; completion 2012Contractors: Aegis Consortium (Bilfinger Berger, Commonwealth Bank, St Hilliers Contracting, Hawkins Construction and Programmed Facility Management)Value: NA(Update: State government announcement of award of contract, May 2010)WESTERN AUSTRALIAENERGYWheatstone Project, Ashburton North, Onslow, PilbaraPrincipal: Chevron, Apache Julimar (16.25%), Kufpec (8.75%)Scope: Initial two LNG processing trains each with a 4.3Mtpa capacity, domestic gas plant includes installation of gas-gathering, export and processing facilities in federal and state waters and on landStatus: Chevron announced final investment decision on track for 2011, May 2010Purpose: Facility to be supplied initially from Chevron’s 100% interest in the Wheatstone field and Chevron-operated Iago field (WA-253-P, WA-17-R)Contractors: Bechtel Oil, Gas & Chemicals (downstream FEED), Intecsea (upstream FEED – gas-gathering, export and processing facilities), Technip Oceania (upstream FEED – production platform), Golder Associates (geotechnical investigations, LNG plant)Value: NA(Update: Chevron announcement of status of final investment decision, May 2010)WESTERN AUSTRALIAWATEROrd-East Kimberley Expansion Project (Current)Principal: Regional Development, LandsScope: Ord irrigation scheme and East Kimberley Development package includes road infrastructure for 14,000ha development, including potentially Packsaddle area, Ord West Bank, Mantinea and M2 areaStatus: Construction commenced on 22 new agricultural lots, 19km channel, 14km road extension and irrigation control structures, May 2010Contractors: Construction – Moonamang Joint Venture (Leighton/Indigenous Business Australia Joint Venture); site works for accommodation village – Ertech; accommodation village – FleetwoodValue: $415 million program ($220 million from state’s Royalties for Regions funding and $195 million under federal government’s Nation Building – East Kimberley Development Package) (Update: State government announcement of project commencement, May 2010)WESTERN AUSTRALIARESOURCESChristmas Creek Iron Ore Project, East Pilbara (Current)Principal: Fortescue Metals GroupScope: 50Mtpa includes Stage 1, 19Mtpa crushing, washing, screening and fines processing operationStatus: Downer EDI awarded preferred tenderer status on six-year contract for provision of mining services, May 2010Contractors: Downer EDI (mining), Crushing Services International (crushing and processing)Value: $360 million(Update: Downer EDI announcement of contract award, May 2010)

Construction skills shortages a big issue, again

Executive general manager for SouthTech – Clarius Group’s engineering and building services division – Phil Desmet said skills shortages were one of the biggest issue facing businesses and governments involved in large infrastructure projects.“After hitting the bottom in October, the market has been gradually climbing ever since. There is now a readiness to make hiring decisions whereas several months ago companies in this sector were preparing for opportunities and holding back on making these hiring decisions,” Desmet said.“SouthTech is seeing two emerging trends as we come out of the GFC. New jobs are mainly filled by people moving from one organisation to another. “This is partly due to the fact that it is bonus time of the year and many do not receive bonuses in their current positions, prompting them to move on. This movement is particularly strong at the senior end of $100,000 per annum plus. “Second, there is certainly a stronger tendency towards permanency among new hires. This is a usual trend at the end of an economic downturn. “Companies initially hire temporary staff as they are unsure about how the market will move forward. They then move these new hires into permanent positions before taking on new permanent hires.”The skills index for construction tradespersons rose by a strong 1.4% in the March quarter, moving from 98.4 to 99.8 – a score of 100 indicates equal tension between supply and demand.The skills index for building and engineering professionals remained steady, while the index for associate professionals such as research, design engineers and surveyors moved from 100 to 100.5. Meanwhile, associated skills occupations experienced continued upsurges with metal tradespersons up 4.1 to 105.1 and electronics and electrical tradespersons up from 96.4 to 97.0.Desmet said although the index remained in the balanced range, the large movement between quarters indicated a strengthening of demand conditions that would likely continue over the next few quarters. He noted one of the main drivers for the increased labour demand in infrastructure related to the stimulus packages which are now coming online across the country, in particular railway and road projects. “This is likely to lead to shortages in engineering professionals in Victoria, Queensland and Western Australia. However, New South Wales remains against the trend with several local projects still on hold due to a lack of funding,” he said.“The main occupation groups of skill shortages include signal engineers, highway design engineers as well as principal tunnel and structure engineers.”

Safety in sewer thanks to hydraulic saw

Project engineer Kiran KC said Metropolitan Restorations was engaged by Sydney Water to replace the concrete platforms with steel structures.He said the company sought assistance from Kennards Concrete Care for the hire of the hydraulic-powered demolition saw after it became apparent that flammable gases in the sewer main and shaft had eaten away the platforms and would prevent the use of petrol or electric powered tools.A steel ladder, connecting the staged platforms and leading to the 40-year-old main, also required replacement.Safety was the highest priority for the team working in the confined shaft, which was 3.7m by 1.8m and the height of a 20-storey building.“The hydraulic saw played an important role because it produces no fumes,” the engineer said.“Our people were comfortable working with it and they found it very effective in cutting through the concrete which was 150-200 millimetres thick.“The concrete pieces, each weighing about 80 kilograms, were then winched to the top of the shaft.”

New dump truck saves on fuel

The new 860E-1K electric drive rigid frame dump truck, featuring a payload capacity of 254 tonnes, is designed to be matched to Komatsu PC5500-6 and PC8000-6-sized shovels and excavators, WA1200-3-sized wheel loaders, and large rope shovels.Power for the new 860E is the Komatsu SSDA16V160, a 2015-kilowatt, 16-cylinder, two-stage turbocharged Tier 2 certified diesel.According to Komatsu Australia’s National Product Manager – Mining, Kris Burford, Komatsu’s trolley-assist system can be used with either 1600 or 1800-volt lines, allowing the 860E to travel uphill faster while engine rpm reduces to idle speed, saving fuel and extending the life of the engine. “Trolley-assist has the potential to reduce fuel consumption by up to 30 per cent, and is proven technology that has been extensively used in some mining markets,” he said.“Trolley-assist is also available as an option on our existing 730E-7 dump trucks, on consultation with Komatsu.”The 860E-1K Komatsu-designed drive system produces a maximum speed of 64.5km per hour through a 35.52:1 final gear ratio powered by the latest Komatsu-Siemens control package. Burford also said another key feature of the 860E was its braking power.Braking power takes place through an ultra-quiet dynamic retarding system capable of generating 3470kW of braking power, and is assisted by four-wheel wet-disc brakes. “These braking elements, coupled with Komatsu’s traction control technology, provide excellent braking force even in difficult road conditions,” Burford said.With the new truck, Komatsu has also paid attention to increasing operator comfort and making driving easier and less tiring.“An integrated electronic dash display provides a standard suite of instrument gauges as well as payload data.“To further enhance productivity and comfort during long shifts, the 860E’s steering column tilts and telescopes to customise the operator’s driving position, while automatic speed control for uphill or downhill hauling makes it easier for the operator to maintain a desired speed.“We have also improved the access systems to the cab.”As with all Komatsu large mining equipment, the new truck features Komatsu’s Vehicle Health Monitoring System (VHMS).

Mardi-Mangrove on starting blocks

After two years of planning, investigations, environmental assessments, designs, statutory approvals and community liaison work, the physical construction of the site office in Yarramalong Road is set to start this month, followed by work at the Wyong River pump station next month. Construction of the two pipelines which includes a stretch of 1.9 kilometres from Wyong River to Mardi Dam and 19km from Mardi Dam to Mangrove Creek Dam will begin in April.Construction work is estimated to be completed in January 2011, with project commissioning and water flowing anticipated by June 2011.John Holland will be responsible for procurement of construction materials, limited design development, construction of capital works and integration with the overall water supply system, site restoration, and commissioning of capital works.The Mardi-Mangrove Link is a joint initiative of Wyong Shire and Gosford City Council with the Australian government funding of $80.3 million from the Water Smart Australia Program. Costs above $80.3 million will be jointly funded by the two councils.Once built, the project will become the largest water infrastructure built on the NSW Central Coast for 25 years.