Bateman Engineering Share Discussion Threads

[rivaldo] 19/6/2008 16:29

Simon, please can you forward a copy of the Dresdner note and any others you think might be of interest? Just having a look here.

TIA

[simon gordon] 18/6/2008 12:49

Mineweb - 18/6/08:

'China and Indian leaders now are in charge of 40% of the world's population. Both nations are also undergoing rapid urbanization with 500 million Chinese expected to move to cities or towns over the next three decades.'

[alun rm] 12/6/2008 17:02

Sliding down on low volume, this seems to be a case of 'no buyers' rather than lots of sellers. Either way, the market reacts as markets must with the price falling. Support is now nowhere to be seen, so it is a question of some sort of catalyst creating demand for the share. That can only really come if good news comes into the market place, or if a fund decides that the price is a bargain. No sign of either scenarios at this stage. But just 3 weeks to the trading update. If it is positive (as I expect) then this recent dip should be quickly reversed.

In the meantime, the price will slip as each seller comes into the market place.

[simon gordon] 10/6/2008 14:39

Ausenco only does one LSTK contract per year with all the rest EPCM.

MDM only does EPCM and is now worth more than BATE - MDM have 100 staff and BATE have 1,500.

Ausenco are on a forward p/e of 14x.

BATE with the LSTK approach has been caught with its pants down by demand inflation. BATE are moving toward the EPCM model with the Hybrid approach, aiming to get LSTK down to 50% of t/o from 80% but this will take time.

I think the problem for BATE was that prior to the Mining boom they specialised in process engineering and not project management. When the boom started they took on some large LSTK contracts and had the deep engineering skills but not the project management skills - hence the hiccups. With Eddie du Rand and Martin Smith appointed to senior management roles and the recrutiment of experienced Project Managers, BATE should be able to lick this problem. BATE are also sourcing engineers from India and plant from China, for example the CITIC agreeement, to counter demand inflation.

[stegrego] 10/6/2008 13:44

Their is little doubt that the market couldnt be better at the moment or the forseeable future.

The only problem is execution risk.

Otherwise it should be fairly plain sailing (barring wars etc)

The chances are there - can BATE take them?

[simon gordon] 10/6/2008 13:18

According to Ausenco the global pipeline for mining projects is between $120 and $150 billion US dollars.

The Australian pipeline - announced projects:

Metals ores mining development - A$54.2 billion
Metal processing - A$25.6 billion

Total = A$79.2 billion

I don't know over what timeline this will flow but it gives an idea of the wall of capital and potential orders BATE could tender for.

-----

Another bit of data:

In 2007 Metals Economics Group (MEG) estimated that exploration spend grew
by approximately 40% to US$10.5bn and is estimating that it will increase by between 25-35% in 2008 to over US$13bn (source: Metals Economics Group, Corporate Exploration Strategies Report, 2008). Such a strong level of exploration spend bodes well for more resources projects emerging over the coming years.

[simon gordon] 10/6/2008 11:17

Minesite - 9/6/08:

Is It A Bubble Or Is It A Boom?

One of the drawbacks to admitting to anyone that you used to work in mining is that they immediately ask you if the present boom is sustainable. The trite answer is: of course not, most commodity prices are well above the marginal cost of production and market forces will work to increase capacity and reduce demand to a level where the market is more balanced. A more relevant question is: how long will that take? That there is a boom is not in doubt, but the assertion that it is a bubble is harder to maintain.

It's not as if there are great stocks of metal being held off market to artificially sustain prices for the benefit of any particular party. The most relevant measure, inventory, expressed in terms of weeks of consumption, is at five weeks or less for every metal apart from nickel. Even that metal has only 11 weeks in stock which - not much considering the length of time it takes to mine, smelt and ship it to somewhere it can be turned into stainless steel.

Another indication that this is not a bubble is that even bulk and other commodities that have no terminal markets have experienced price rises comparable to those where such a facility exists. It is reasonable to suppose that bullion trading and the London Metal Exchange have attracted speculative money and investment funds seeking to capture returns from precious and base metals. That may well have pushed up prices at the margin. But this writer has yet to see an ETF for coal, iron ore or chromium. It wouldn't be impossible to take speculative positions in these commodities, but I suspect it wouldn't be easy. Besides, the reality is that ferrochrome, iron ore and coal are actually worth more to an end consumer who can make something with it, and add to his margin, than they are to a simple long only speculator.

If it's not bubble, the current market must be a boom. More bizarrely, it's a boom at a time when much of the western world is facing its toughest economic environment for decades. Although no one has actually declared a recession in any leading economy yet, the betting in favour of that must be increasing. Certainly, data like the jump in US unemployment from five per cent to 5.5 per cent gives strong grounds for believing that America's economic growth rate is slowing rapidly and may even be turning negative.

Of course no politician will want to herald a recession. They will deny until it is undeniable. After that they will then say that the recession is now history and that growth is round the corner. However, politicians have a responsibility to provide the right environment for growth. One of the key issues facing the mining industry right now is the lack of power in Southern Africa. Decades of under-pricing electricity has prevented new capacity from being added, and the resulting crisis has caused problems not just in South Africa but in surrounding countries. This crisis led directly to a cutback in platinum group metals production and also to the sudden closure of the Kombat copper mine in Namibia. Now flooded, that mine has effectively been lost to the industry. To replace that mine and add more capacity to cope with global growth in consumption will take a lot more time than many observers would like to think. This is certainly not a bubble and the boom is nowhere near finished yet.

[simon gordon] 06/6/2008 14:47

Moneyweek - 6/6/08:

For several years, the Pilbara region of Western Australia has witnessed a boom like few mining districts have ever seen. Like most bull markets today, the Pilbara's boom is related to Australia's neighbour to the north, China. China is consuming iron ore, coal, natural gas, copper, zinc and crude oil at a pace we've never seen before in human history.

Most of us know China's boom is a huge driver in the bull market in infrastructure, energy, metals and minerals. But there's another developing region you may not have considered... one that could make you a rich investor over the coming years: the Middle East.

From Dubai to Kuwait, there's an estimated $2.4 trillion in construction projects either underway or in development in the world's biggest oil patch.

Surprisingly, $1.4 trillion of that total is for projects in civil construction. This means spending on residential and commercial construction projects in the Middle East outweighs construction on oil, gas, power, petrochemical, industrial, and water projects combined.

The three largest civilian projects are:

1. King Abdullah Economic City, Saudi Arabia: $120 billion. The leading firm is Dubai-based developer Emaar.
2. Silk City Project, Kuwait: $86 billion. The leading firm is Tamdeen Real Estate.
3. Dubailand, UAE: $60 billion. The leading firm is Tatweer.

That's right... They're building giant new cities out of nothing. Four have already been launched. They are: King Abdullah Economic City, Jizan Economic City, Knowledge Economic City and Prince AbdulAziz Bin Mousaed Economic City

For example, in the United Arab Emirates, Dubai recently announced plans to build the world's largest aluminium smelter. It's a $5 billion project with the aim of producing a smelter that can generate 700,000 tons per year. Saudi Arabia has plans for its own $3.8 billion aluminium smelter. Oman has plans for a $2.2 billion smelter.

That's $11 billion for just three projects.

How can you profit from all this? The global building boom is going to require awesome amounts of iron ore and base metals... so producers of this stuff still have years of gains ahead of them.

Whichever investments you choose... realize the infrastructure boom isn't just focused on China. The US is spending to upgrade its "F" infrastructure rating. Russia is spending. Latin America is spending. And now, the Middle East is spending its oil money. It all points to big returns in infrastructure stocks.



-----

KENZ looks a solid bet as a GCC focused business.

Any others?

[simon gordon] 06/6/2008 09:41

Economist - 6/6/08:

The biggest investment boom in history is under way. Over half of the world's infrastructure investment is now taking place in emerging economies, where sales of excavators have risen more than fivefold since 2000. In total, emerging economies are likely to spend an estimated $1.2 trillion on roads, railways, electricity, telecommunications and other projects this year, equivalent to 6% of their combined GDPs-twice the average infrastructure-investment ratio in developed economies. Largely as a result, total fixed investment in emerging economies could increase by a staggering 16% in real terms this year, according to HSBC, whereas in rich economies it is forecast to be flat. Such investment will help support economic growth this year as America's economy stalls-and for many years to come.

The infrastructure boom has global implications. Increased investment means more imports of capital equipment, which will help to slim current-account surpluses in China and elsewhere, and so reduce global imbalances. Rising demand for building materials will keep commodity prices high.

[stegrego] 05/6/2008 19:01

Big-ish drop today on little volume...
New low coming? or rebound?

Sector news been good lately.

[simon gordon] 04/6/2008 14:53

South African competitor DRA:



-----

Mining Weekly - 25/4/08:

DRA division acting head Rodney Drew says, "The opportunities for new and expansion projects presenting themselves in South and Southern Africa, as well as overseas in regions such as China and Australia, are huge. Unfortunately, the single most difficult challenge facing contractors and consulting engineers in the South African mining industry is the acute lack of skills in the industry. Trying to attract and retain talent is an ongoing challenge for the entire industry."

DRA Mineral Projects has made considerable inroads into the mining industry since its establishment in 2007.

DRA is an engineering company which specialises in project management and process plant design. It has the capacity to combine expertise with proven, innovative technology to deliver a powerful engineering competence.

[simon gordon] 03/6/2008 10:41

Mining Top News - 3/6/08:

The booming mining sector will create another 90,000 jobs by 2020, with more than half the jobs growth in Western Australia.

This is a 70 per cent jump on the sector's current employment levels.

"We are confident we are three years into a 'super cycle' if global demand for our products – a decade and more of sustained demand – which some consider could even last 20 years," he said.

[affc21] 02/6/2008 17:19

Simon,
Probably justifies BATE's decision to go global and not rely on one countryies problems/politics and the risk that can entail.



Bateman burnt in India, shakes up management
Allan Seccombe
Posted: Thu, 13 Mar 2008
[miningmx.com]

Bateman's exposure to South Africa has dropped to 33% of revenue from more than half in the same period last year.
(Taken from article, as below:)

[simon gordon] 02/6/2008 10:57

Pretty gloomy outlook on South Africa from Minesite - 28/5/08:

In Johannesburg, when they're not swapping tales of the latest criminal atrocities, or contemplating emigration, the local folks like to raise their eyebrows on the mention of any bizarre news, and utter - albeit with a smile - the ironic phrase: "only in Africa!" Yes, "only in Africa" could economic growth be falling by such significant levels in the midst of the biggest mining boom in thirty years and in one of the world's greatest mining economies. Globally economic growth is running at over four per cent, but, in the face of that, during the first three months of 2008, while every man and his dog elsewhere was grabbing a rock hammer or a Geiger counter and attempting to sell metal to the Chinese, in South Africa economic output from the mining industry dropped by a staggering 22.1 per cent, down to its lowest level in four decades.

And despite soothing words from the South African government to ease the concerns of the general population, the local power utility, Eskom, still hasn't escaped the squeeze it's in. Regulation has kept electricity prices so low that there's been no money for investment in the grid, and in the face of soaring coal prices there's no longer enough money coming in to pay for fuel to fire the power stations. So after the government allowed it one tariff increase, Eskom is now seeking another, and a much more substantial one.

[affc21] 02/6/2008 10:42

Another Mining Services company "MDM Engineering" (probably known by a few posters on here), on the rise again this morning - apparently tipped by SCSW this weekend after previously being tipped by watshot.com
And before anyone asks, no I'm not invested in MDM :(
But, well done those that are.

I suppose my point is if/once the BATE management credibility issue is behind us with either a Trading Update(July?)/Final Results(September?),there is then the likely-hood of these also being tipped with a hopefully corresponding rise in the share price.
After all BATE/MDM are in the same booming Mining Services sector, so I'd have thought they should at least be extremely busy with contracted project work.

BATE Management also stated in the Half Year Results for the six months ended 31 December 2007 (released on 13 March 2008): they are confident of meeting full year end targets, with all losses from the Hindustan Zinc project accounted for in the First Half Results.


Below is copied from the Half Year Results:


Outlook

The first half of the 2008 year has been challenging in terms of managing
project execution risks. Various steps including the appointment of Eddie Du
Rand as Deputy Chief Executive Officer and the replacement of the Bateman India
Managing Director are intended to ensure a sharper focus on project execution
and its associated risk. Noting that the appropriate provisions were made in
the half year results for the loss making Indian project, I am confident of a
significant improvement in results for the second half of the current year. I
am therefore of the view, based on an assessment of the second half of the year,
that our results will meet management expectations.

Dr Sivi Gounden
Chief Executive Officer
12 March 2007

----and----

Chief Financial Officer's Report

Overview

The Hindustan Zinc project in India is behind schedule and is over budget,
resulting in an expected material project loss to completion, fully recognised
in the first half. The project is being monitored closely to ensure that no
further losses are incurred.





Please DYOR


From the 1H result's BATE earned EPS of 21.6c, which should make the full year target of EPS 53c achievable with as hoped for no more project cost over runs to report(i.e. with EPS of 31.4c from the 2H).

[affc21] 30/5/2008 15:46

I'm not a chartist, but it looks like BATE has broken out of its 9 month downtrend (broken through its upper downtrend line), as shown in the chart above. Normally a bullish signal.

[affc21] 30/5/2008 08:38

Simon, nice find and most informative article.
And Thanks for the input that you have posted on this thread of late.

[simon gordon] 30/5/2008 08:04

Mining Weekly -30/5/08:

Bulk materials handling company unaffected by current economic slowdown

Engineered products and equipment company Bateman Engineered Technologies (BET) has been awarded a number of large contracts in bulk materials hand-ling that have been well timed for the company, owing to a current economic slowdown. While other sectors may be struggling with factors like high energy and fuel prices, BET, ironically, seems to be benefiting from the subsequent increased global demand for coal.

"We are experiencing a very intense boom in bulk materials handling," says BET bulk materials handling GM Johan Erasmus. "With the current slowdown in the economy, bigger projects, which fewer companies can do, are staggered, allowing us to take advantage of them, such as the Douglas/Middelburg Optimisation (DMO) project, which was delayed, to our benefit."

BET has just been awarded the contract to supply coal-mining and prospecting company BHP Billiton Energy Coal South Africa's (Becsa's) DMO project with materials handling facilities. The contract, valued at about R348-million, is for the supply of two stockyards as part of the coal handling infrastructure, which will include stackers and reclaimers for run-of-mine and product coal. This lump-sum turnkey contract is expected to be completed by February 2010.

Commenting on the award, Bateman Engineering CEO Dr Sivi Gounden says, "This is the second award this year of a major materials handling contract from BHP Billiton and underscores our position as a leader in the delivery of world-class materials handling systems to the natural resources market. The contract further cements our valued relationship with BHP Billiton and is a significant addition to our reference list."

The DMO project scope, located in Mpumalanga province, includes the use of reserves across the Douglas and Middelburg Mine Services (MMS) collieries as well as the development of new mining areas with low strip-ratio coal, with the product being fed into a new 14-Mt-a-year coal-processing plant.

The new coal-processing plant will supplant the existing, less efficient washing plant at Douglas. The project will enable BHP Billiton to maintain energy coal exports from the combined Douglas colliery and the MMS colliery at around current levels (about 9,5-million tons a year is BHP Billiton's share), while simul- taneously fulfilling domestic contractual commitments. The expected life-of-mine is to 2034.

"The full value of the materials handling project, including the lump-sum portion, is in the region of R1-billion," says Erasmus. "For a company like us, being a product supply company and not a project house, it is a big contract but we are geared up for it."

Erasmus adds that in about two to three months, engineering office operations will taper off and on-site activities will escalate at the DMO, coinciding nicely with the timelines of other large projects on the go, such as the Richards Bay Coal Terminal (RBCT) Phase 5 expansion project, valued at R1,2-billion, which is already on site and out of the engineering office.

The RBCT, the single largest coal terminal in the world, contracted Bateman to provide an additional tandem tippler for train offloading, a bucket-wheel-type stacker-reclaimer, associated extensions to the existing conveyor system, replacement of the terminal control system, all civil works, rail loop extensions, as well as all other related services for the complete project. The expansion is due for completion by the end of the first half of 2009.

In January, Becsa awarded BET a R146-million lump-sum turnkey contract for the provision of a coal handling infrastructure for the Klipspruit colliery, not far from the DMO project, in Mpumalanga province. The new plant is part of Becsa's expansion of the opencast coal mine where capacity is being increased from 4,8 Mt a year to 8 Mt a year and will supply both export customers and South African energy provider Eskom.

Engineering work started at Klipspruit in January and site activities in May, with the project's completion expected to take place in two phases.

Phase one, which includes a run-of-mine tip, secondary and tertiary screening and crushing with a rotary breaker and con- veyors to connect with the rest of the plant, is to be completed by the end of February 2009. A bypass system to supply Eskom with unwashed coal forms the second phase of the project and is due for completion at the end of May 2009.

"The local market for what we do is vibrant and active," explains Erasmus, but adds that on the international scene, business is promising as well. "There are lots of projects on the go in India where they are also experiencing a power shortage. Lots of power stations are going up along with all their supporting coal supply projects. India is a big market for us at the moment."

"It is amazing that the Indian market, which is so foreign to us, actually recognises our ability to do these studies and designs," adds BET bulk materials handling manager for business development Rudi Pieterse. "They have great respect for our abilities."

Recently, Bateman Engineering acquired solid/liquid separation equipment supplier, the Delkor Group of Companies. Delkor has 30 years of design, engineering and supply in mineral and chemical processing applications that Bateman has absorbed, resulting in a 30% to 40% growth for the company on a global level. The transaction has been completed in all relevant jurisdictions, save China, where regulatory approval is still being waited for.

"The Delkor acquisition is a critical step toward our growth objectives," says Gounden. "It provides a platform to immediately globalise our equipment business which, to date, was focused largely on the Southern African market.

Delkor's impressive margins and history of growth will immediately contribute to our financial results."

[simon gordon] 29/5/2008 14:30

Mining Weekly - 29/5/08:

Diversified-miner Rio Tinto expected world mineral demand to double by 2022, a trend that CEO Tom Albanese said would lead to a doubling of demand in key Rio Tinto products over the next 15 years.

Sustained high prices were also expected, accompanied with higher expected growth rates, increased cash generation potential and lower market risk. "We will have a good cost position and margins over the coming decades, not just years," indicated Rio Tinto CFO Guy Elliot.

Supply-side pressures and constraints would also contribute to ongoing strong markets. Grades would continue to decline with ageing orebodies, delays in approvals, and regulatory and environmental delays were also a challenge, as well as continued skills constraints.

"There has never been a time at which our options for expansion have been so valuable. Rio Tinto has a clear road map to deliver industry-leading growth over the next few years, but this is just the beginning. Rio Tinto will continue to unlock value from tier one assets that are unrivalled in the sector," stated Albanese.



-----

Bateman Engineering showcased its technological expertise at a successful Process Engineering Forum held recently in Johannesburg, South Africa for its clients and staff. Introducing the Forum, Steve Burks, Chief Technology Officer of Bateman Engineering, outlined how the Group is employing technology to redress the global skills shortage, via a structured three-year growth plan. This plan includes establishing centres of excellence focused on unit processes or products, such as DC furnaces or SX plants, and which have many advantages including the ability to develop standard designs for re-use thus reducing skills requirements, cost and duration in all phases of the projects. Forming technology partnerships and acquiring or developing proprietary technology in house are also high focus areas with benefits such as a reduction in flowsheet development time, effort and failure rate.......

[simon gordon] 27/5/2008 15:48

Dresdner forecasts - 14/4/08:

06/08
T/O - $593m
PBT - $30.1m
EPS - 53c

06/09
T/O - $665.9m
PBT - $39.2m
EPS - 69.2c

06/10
T/O - $717.7m
PBT - $46.5m
EPS - 82.1c

*These figures include the Delkor acquisition.

[simon gordon] 27/5/2008 10:03

There is always the risk of something like this blowing up:

CNN Money - 23/5/08:

Minefinders Corporation Ltd. (the "Company") (TSX: MFL)(AMEX: MFN), a precious metals mining and exploration company, announced today that a subsidiary company has commenced a binding arbitration process seeking approximately US$10 million in damages from Ausenco International PTY of Brisbane, Australia and a related company, Ausenco Americas LLC.

The binding arbitration was launched on May 22, 2008 by Minefinders' subsidiary, Compania Minera Dolores S.A. de CV. ("CMD"), before the International Centre for Dispute Resolution of the American Arbitration Association. In addition to the damages, CMD seeks to recover the costs of the arbitration and its legal fees.

[simon gordon] 23/5/2008 20:08

FT - 23/5/08:

Aim is looking cheap – but it's still not worth it

Around this time last year, the nation's investment experts all started to point out how cheap the big FTSE 100 stocks looked and to suggest that we all switched out of smaller companies and into blue chips.

It wouldn't have been a bad idea. In the last year, the junior Alternative Investment Market (Aim) index has fallen around 14 per cent while the FTSE 100 is down only 6.5 per cent. Admittedly, you'd have been better off in cash – you'd have made 5 per cent there. But, relatively speaking, at least the experts were right.

Now, however, it's all the other way around. If you are looking for fundamentally cheap investments, you need to be looking at Aim where the average price-earnings (p/e) ratio has fallen to a mere 6.3 times.

There are 1,600 companies listed on this market, so there are obviously huge variations within this – miners and oil companies trading on p/e ratios of 20-plus and the odd outlier, such as fashion super-success ASOS, trading on 40 times. Even so, talk to a small-cap fund manager of any kind, and he'll be quick to point to a pile of favourite stocks all throwing off cash yet selling in the market for the bargain prices of 4r or 5 times earnings.

One example is AT Communications, a perfectly respectable telecoms company on a historic p/e of 5 times and a prospective p/e for 2008 of a mere 4.75 times.

So just why are there so many apparent bargains about? One answer might be, tax.

Until recently, capital gains on Aim-listed stocks were taxed at only 25 per cent of the normal rate for higher-rate taxpayers, as long as you held the stocks for two years – so an effective rate of 25 per cent of 40 per cent, which is 10 per cent. Now, however, you pay 18 per cent just like anyone investing anywhere else.

Then there is inheritance tax to consider. Certain Aim stocks are immune from inheritance tax. But now that couples are able to leave their nil-rate bands to each other (automatically combining their tax- free allowances) perhaps fewer people feel the need to bother with the kind of estate planning that Aim provides.

Of course, there is – as there should be – more to this than just tax. There's also general risk aversion. Smaller companies tend to be more geared to the domestic economy than larger multinational companies so, when things turn down,
their shares inevitably suffer more than most.

And things are turning down in the UK – big time. The housing market gets worse by the day; there are signs unemployment is about to take a turn for the worse as jobs in construction and retail start to go; oil prices have now started to "melt up" – even more quickly than I suggested they would in last week's column – and rising inflation means no interest rate cuts.

However, an annual survey of the market from Baker Tilly and Faegre & Benson, entitled "Taking Aim", throws another kind of light on the way things have changed in the market.

Back in 2005, there were 335 initial public offerings (IPOs) on Aim, raising an average of £17m each. In 2007, there were 82 but the average amount raised was a massive £231m. In some ways, this might look like a good thing – more money was raised in total. But for real smaller companies it might not be.

Why? It suggests, says John Glencross of Calculus Capital, that the London Stock Exchange (LSE) and the companies that work as brokers to Aim-listed companies are more interested in marketing Aim as a home "to foreign companies seeking an international listing, where the amounts involved are very large, than to growing UK companies which typically want under £10m". A number of last year's listings were also large funds of one sort or another, or property-related companies.

For these overseas companies, and the brokers getting paid for bringing them to the market, Aim also presents an opportunity for a form of regulatory arbitrage. Its relatively light regulation and less-than-arduous listing requirements make it an easier place to get a fundraising away – and earn those commissions.

This makes sense, of course, in that both the LSE and the brokers are looking to make money, and you make more from big listings and secondary fundraisings than small. But it does make it hard for small companies to get their hands on funding.

This might be the key to the low-looking valuations. Right now, a small company, however good, doesn't really have anywhere to go to get money to expand. The banks are closed or upping their rates; the debt markets have never been small-cap friendly; and if they only want a few million, Aim isn't suiting them very well either.

At the same time, liquidity has disappeared from the market itself. Spreads are wide and volumes are low. So buying and selling stakes in listed companies has become little easier than buying and selling in private companies.

The combination of these two factors means that, right now, being listed on Aim isn't really all that different to being a private company.

And what do private buyers pay for private companies? It depends on all sorts of issues but, in general, the answer is around five times profits. Look at it like this and maybe the seemingly cheap stocks rattling around Aim aren't so cheap after all.

It would be nice if there were something to be done about all this – small companies are incredibly important to the UK economy. But, as it probably won't be, I think we can expect the sector to continue to be starved of both funding and investor interest. Both are compelling reasons not to leap in just yet.

[simon gordon] 23/5/2008 10:01

Bullish outlook on the sector; Mining Weekly - 23/5/08:

'Multidisciplinary construction and engineering group Grinaker-LTA forecasts positive growth in its contract mining operations, Grinaker-LTA Mining Contracting MD Alf Wood tells Mining Weekly.

He says that this surge and upward spiral in the mining sector is largely influenced by the demand for commodities, predominantly in China and India.

"With the rise of platinum, chrome, coal and even the gold prices, the market is quite bullish for the mining houses as well as contractors, at the moment. We see a good five-year outlook in the industry, particularly with the expansion in China and India. They need commodities for their rapid growth," states Wood. '