UGL Gets A$99.5 Million Contract for Work on BHP's Jimblebar Mine

   By Robb M. Stewart 
 

MELBOURNE--Engineering firm UGL Ltd. (UGL.AU) said in a statement Wednesday that it has secured a 99.5 million Australian dollar (US$101.4 million) contract from BHP Billiton (BHP) for work on the Jimblebar iron ore mining operation in Western Australia, including building and installing equipment for stockpiling and crushing ore.

Last month AusGroup Ltd. (5GJ.SG) said that it was given a A$48 million contract for mechanical and piping work at Jimblebar, while Downer EDI Ltd. (DOW.AU) said it received a A$71.7 million contract for electrical work.

BHP is pushing ahead with expansion of the mine despite a fall in market prices for the steelmaking ingredient. Benchmark prices fell to their lowest in 31 months last week as demand from top consumer China remained soft.

July iron ore exports from Port Hedland, the export hub used by BHP, fell on month, for the second month in a row, as shipments to China declined.

BHP is reviewing the pace and sequence of new iron ore growth projects, although it has affirmed its commitment to projects under way in the remote western Pilbara region.

Last year it approved spending US$3.4 billion to develop the Jimblebar mine and rail links as part of a wider expansion of its mining capacity in the Pilbara.

The company is seeking to fill its annual allocation of 240 million metric tons at Port Hedland's inner harbor, and has ambitions to grow its mining and export capacity beyond that.

Write to Robb M. Stewart at [e-mail]

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