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Fluor wins Khoemacau EPCM

Publishing Date : 05 August, 2019

Author : ALFRED MASOKOLA

Global engineering group Flour Corporation on Tuesday announced another major mining development contract in Botswana. Canyon Capital a company developing the Khoemacau Copper & Silver projects has awarded the American conceived giant Engineering  Procurement & Construction Management (EPCM)  services for it’s over P5 billion mining undertaking aimed at  unearthing the base metals for the next 21 years.


Fluor booked the undisclosed contract value in the second quarter of 2019.According to the New York Stock Exchange Listed multinational engineering outfit the contract follows a successfully working relationship after they worked with Canyon Capital on the first phase of preliminary and cost determinacy designs.


“We worked closely with Cupric Canyon in the project’s front-end engineering and design phase to establish a capital-efficient design and execution plan for the project,” said Tony Morgan President of Fluor’s Mining & Metals Business in a statement released from Irving Texas United States on Tuesday.


Fluor was also involved in construction management of the early works for the camp upgrade, bush clearing, transport corridor and surface infrastructure terrace preparation. In this next phase of intense mining infrastructure designs and reconfigurations Fluor’s scope entails upgrading the existing copper concentrator plant and new mine surface infrastructure.


The project is expected to produce an annual average of 62,000 metric tons of copper and 1.9 million ounces of silver with a life of mine in excess of 20 years. “We will leverage our local capabilities and extensive copper experience to execute the Khoemacau project with excellence, safely, on time, on budget and with quality,” added Morgan.


Engineering, Procurement, & Construction Management (EPCM) Contracts arrangement are common set ups used in mega industrial projects where a significant number of trade contactors are involved. On an EPCM contract the client employs the necessary trade contractors to construct the works. The EPCM 'contractor' designs the project, and then acts as a construction manager, coordinating the procurement process and then managing the trade contractors.


Effectively they are performing the role of a consultant during the construction phase. An EPCM contractor is not directly involved in the building and construction of the project, but is rather responsible for the detailed design and overall management of the project, on behalf of the owner or principal.

The EPCM contractor is mandated with ensuring that the engineering and design of the project is in compliance with the projects technical and functional specifications. Supervising, management and coordinating construction interface in accordance with a detailed schedule is the key responsibility of the EPCM contractor. When a need arises during the tenure of the project the EPCM contractor takes full responsibility of   establishing contractual arrangements on behalf of the owner with other contractors, vendors, sub-contractors and sub-vendors, through a tender process.


Flour Corporation raking 164 on the Global fortune 500 company’s scale, at an annual revenue of around $20billion established an office in Botswana in 2015 and has managed and delivered one of the country’s major projects. In September 2012 the company completed Jwaneng Mine expansion works, an over P3.5 billion project that delivered Cut 8. The Jwaneng Cut 8 was an over P24 billion mining investment that boosted mine’s lifespan from 2017 to 2024. Debswana has since commenced Cut 9, an over P15 billion project that will take Jwaneng to 2034.


During expansion into Cut 8 Fluor performed engineering, procurement, and construction management services for associated relocation and rebuilding of the mine surface infrastructure and completed the project in September 2012.Cut 8  enabled  the removal of overburden to allow the mine to access 91 million tonnes of ore that will yielding 102 million carats of diamonds until and 2024 .The P24 billion  Cut 8 project was and still remains  the largest ever single capital commitment in Botswana’s private sector.


The Khoemacau Copper & Silver Project is located in the North East of Botswana in the Ngamiland district, the project encompasses Kalahari Copper belt and the Bosetu Resource, the latter was acquired from Australian  Based Discovery Metal after insolvency in 2013.Early this year by Cupric Canyon Capital announced the successful signing of US$565 million (around P 5.9 billion) capital injection, as funding package to commence development of the Khoemacau project to unearth high grade copper and silver concentrate.


The US$565 million of funding comprised  a US$275 million (P2.9 billion) senior debt facility from Red Kite Mine Finance and a US$265 million (P2.8 billion) silver stream from Royal Gold AG a wholly owned subsidiary of Royal Gold, and a US$25 million (P263 million) subordinated debt facility also from Royal Gold.


During funding announcement Chief Executive Officer of Cupric Canyon Capital Johan Ferreira explained that the deal was expected to be closed in the 2nd quarter of 2019 opening giving way for second phase of construction which is expected to run for two years pushing the Starter Project to produce first sellable concentrate beginning in the first half of 2021, with subsequent ramp-up.

Flour‘s EPCM contract is also noted to included overseeing the upgrade of existing Expansion Project pre-feasibility study to a definitive feasibility study.


The Expansion Project includes the construction of a new 5.8 million tonnes per annum processing facility near Zone 5 which will produce approximately 100,000 tonnes of copper per annum. Founded in 1912, Flour Corporation is a global engineering, procurement, fabrication, construction and maintenance company that transforms the world by building prosperity and empowering progress. Fluor serves its clients by designing, building and maintaining safe, well executed, capital-efficient projects around the world. With headquarters in Irving, Texas, Fluor ranks 164 on the Fortune 500 list with revenue of $19.2 billion in 2018 and has more than 53,000 employees worldwide.


Head of Mining Base Metal Business at Flour Torny Morgan says his company has worked in Botswana since the early 2000s and opened an office in Gaborone in 2015. “From Gaborone, we deliver safety, cost-competitive innovations and execution excellence to clients. Fluor conducts business in a socially, economically and environmentally responsible manner, and the Botswana office provides local employment opportunities and supplier and skills development.” He said.

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