Sedgman tipped to win Benga contract

Given the go-ahead by joint venture partners Riversdale Mining and India’s Tata Steel, the construction of the open cut operation will start later this year once the last environmental approvals are obtained.In a trading report, Goldman said Sedgman was likely to be awarded the design and procurement aspects of the CHPP for Benga.The broker expects that Sedgman has already started detailed engineering on the plant, including procurement of long lead items to ensure it is ready for first coal in 2010.Goldman noted Sedgman’s involvement in the feasibility study for the funded project and said it had already factored in around $80 million in revenue for Sedgman in the current financial year without including construction-related earnings.“We expect Sedgman to play a significant role in the construction of the CHPP and have included the associated construction revenues in our financial year 2011 forecasts,” the broker said.“We note that Sedgman is yet to make any announcement on this project though we would expect this to occur once the engineering and procurement contract has been finalised in the next few weeks or so.”First-stage Benga development has the mine targeting 5.3 million ROM tonnes per year for 1.7Mt of hard coking coal and 300,000t export thermal coal. Goldman has a buy recommendation on Sedgman with a target price of $2.69.Shares in the CHPP specialist shed 8.5c this morning to $1.525, while the All Ordinaries index was down 2%.

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