News – Page 11 – Ying Hui International

Australian manufacturing’s ongoing industrial evolution focus for NMW

National Manufacturing Week (NMW), held at the Melbourne Convention and Exhibition Centre from May 14-17, will highlight the continuous growth and change the industry is experiencing.

NMW will feature a theme of ‘Industrial Evolution’ throughout the four days of the conference program and exhibition with a specific focus on driving further innovation in local manufacturing, continuing the evolution of the industry advanced technology solutions, sharing insights to stay ahead of the game, while celebrating Australian manufacturing’s resurgence.

NMW exhibition director Robby Clark said this year’s event promises to support the continuing high-tech and highly integrated evolution of the industry.

“There’s been a resurgence of late in Australian manufacturing, which is being generated by the industry’s collective realisation, active progression and evolution to being technologically advanced, highly integrated, automation and high-level engineering.

“Equally, we’ve also seen Industry 4.0 or the Internet of Things become a reality from technological forecast, which for manufacturing has manifested in operations – for example in smart factories where sensors are providing actionable intelligence or underpinning greater automation.

“Knowledge gathering and solution sourcing are critical steps for manufacturing professionals looking to navigate this industrial evolution that is currently underway. The exhibitors for this year’s event will provide manufacturers with the latest range of products and solutions designed to improve operations and operational performance, increase efficiency and resolve challenges, while the content within the conference program will offer specific advice and visibility into how industry leaders are managing change,” said Clark.

At National Manufacturing Week 2019, the exhibition floor will feature more than 200 leading industrial suppliers of game-changing solutions, new technology, advanced manufacturing products and operational services.

Visitors will be able to take advantage of six designated product zones to navigate through the exhibition floor, which segment the extensive range of products and solutions into key operational categories. The six product zones for 2019’s event are automation and robotics, engineering, Industrial Internet of Things, safety, welding technology, and manufacturing solutions.

Key exhibitors across these six product zones include:

Automation and Robotics – Pilz, Universal Robots, Wago; Engineering – Faro, Prytec, BE;

Manufacturing Solutions – Flow Power, Combilift, Intelli Particle;

Industrial Internet of Things – Epicor, ECi Solutions, Cadgroup; Safety – Vanguard Wireless, Atom, Axelent;

Welding Technology – BOC, Lincoln Electric and Supagas.

There will also be an extensive conference programme that will feature a line-up of more than 70 industry speakers and panellists, who will share their exclusive insights about current industry challenges and recommendations for operational success. With the program’s sessions segmented across two streams, each with their own dedicated theatre, of “Industry 4.0” and “Connected Manufacturing”.

“This year’s conference program will be our most extensive and in-depth to date, with delegates offered unprecedented access to industry leaders with the expertise, knowledge and understanding to develop the strategies and practices for generating further growth,” said Clark.

Must-see theatre programs

The Industry 4.0 Theatre program will offer attendees the latest opinions, developments and research about the impact of Industry 4.0 on businesses and operations. A key highlight of this program will be the opening keynote, which will be delivered by Australia’s chief scientist, Dr Alan Finkel, followed by an innovation and collaboration stories series run by the Advanced Manufacturing Growth Centre (AMGC).

Across days 2-4 of this stream’s conference sessions, other noteworthy speakers include Swinburne University director of Factory of the Future Dr Nico Adams, CSIRO Data61 principal research consultant Dr Elliot Duff, Innovative Manufacturing CRC CEO David Chuter, Siemens head of digital enterprise Christopher Vains, and AMCG managing director Dr Jens Goennemann.

The Connected Manufacturing Theatre program offers expert advice about business management, design and industrial challenges.

Conference sessions within this stream will focus on industry topics, including environment and energy policies, process improvement and optimisation, safety innovation, safety policies, safety management and culture, mental health and well-being, marketing and sales, additive manufacturing and design, and government grants and tariffs.

Industry leaders who will feature in some of these sessions, include Efic Business Development Director Philip Smith, Australian Packaging Covenant Organisation CEO Brooke Donnelly, and Fonterra Cooperative Group HR Systems Owner Toni Kennington.

Clark said this year is NMW’s most extensive program ever, in both speaker volume and industry experience. “We are really looking forward to seeing the best game-changing, innovative and high-tech solutions that our industry-leading exhibitors are planning to demonstrate and display.”

Industry support is key

Strategic partners and industry associations supporting NMW in 2019 include Weld Australia, AMGC, Innovative Manufacturing CRC and Engineers Australia. These respective partnerships strengthen NMW’s depth and relevance of insight sharing and cement the event’s status as a key hub for the manufacturing community to come together.

As a strategic partner of this year’s event, Weld Australia will have an interactive presence on the exhibition floor offering visitors deeper insight into the latest welding skills training available. Weld Australia marketing and communications manager Donna South said Weld Australia will have an advanced welder training hub on the exhibition floor. “[This] will showcase the augmented and virtual reality technology that is revolutionising welder training here in Australia, and around the world.

“Attendees will have the chance to see and try a range of different welding simulators, which are making welder training and upskilling safer, more cost-efficient and engaging for new and experienced welders,” said South.

Improving business by understanding challenges

With NMW featuring a variety of Industry 4.0 applications that are helping lead the way for a strong future for the manufacturing industry, Clark said implementing smart solutions is a must.

“Manufacturing is no different from any other industry, in terms of needing to understand the change and challenges ahead, develop strategies and acquire the knowledge or capabilities to manage these changes or evolutions, while ensuring their customer service and productivity are not detrimentally impacted during this management of change.

“IoT is understandably forcing rapid change across the industry from operational practices and execution, to higher integration, reconsideration of approaches to production or task completion and the requirement to plan for future change, which are typified by the increasing level of ‘smart factories’ or factories with smart solutions.

“Therefore, we know businesses within the industry are actively considering and working to improve their operational practices and refine their approach or strategy for continued success. Because improving a business isn’t a process where ticking a box or achieving that next milestone is the measurement of success.”

To stay ahead of the game, Clark said manufacturers should acquire the latest insights, and collaborate and engage with industry peers.

“Whether your objective is to improve efficiency, productivity or increase quality, it’s crucial to take advantage of opportunities like NMW that support your business in its pursuit of future growth, by providing a forum to engage with industry leading solutions and operational experts.” said Clark.

Registration is now open for the 20th edition of National Manufacturing Week (14-17 May 2019), with free registration available at: www.nationalmanufacturingweek.com.au.

Lincom Group and McLanahan announce partnership

Original equipment manufacturers (OEM) Lincom Group and McLanahan Corporation have signed a contract that will see the former become the official Australian distributor of McLanahan’s sand and aggregates processing range.

This includes the distribution of McLanahan machinery designed for washing and classifying, tailings and water management and dewatering that will benefit both parties.

The collaboration will increase Lincom’s product offering while offering new distribution channels for McLanahan.

Lincom and McLanahan are both family-owned companies with extensive experience in the materials handling and material processing fields in the mining indudstry.

The partnership would bring more McLanahan products and installations in the market, according to Lincom chief executive Stephen Watterson.

“As a leading provider of material processing equipment, we are always looking into the best quality equipment for our customers and to machine plant that complement the range we already successfully provide,” Watterson said.

“McLanahan Corporation is a global provider with a reputation of top quality, with the highest standards for engineering and manufacturing, which is of huge importance to us.”

Fortescue approves $3.7bn Iron Bridge stage two expansion

Fortescue Metals Group subsidiary FMG Magnetite and joint venture partner Formosa Steel have agreed to the development of stage two of the Iron Bridge magnetite project in the Pilbara, Western Australia.

The $US2.6 billion ($3.7 billion) development includes a 22 million wet metric tonnes-per-year ore processing facility (OPF), an airstrip and expanded village, a 195-kilometre Canning Basin water pipeline and a 135-kilometre concentrate pipeline to Fortescue’s Herb Elliot port facility in Port Hedland.

The project will employ around 3000 people during construction and 900 full time positions once operations commence.

The development follows Fortescue’s $US500 million ($703 million) stage one construction of large scale pilot and demonstration plants, which have validated key equipment and magnetite production processes for the full-scale stage two OPF.

“The Iron Bridge project holds Australia’s largest JORC-compliant magnetite resource supporting a long mine life,” Fortescue chief executive Elizabeth Gaines said.

“The project is well progressed and ready for detailed design and execution with the majority of key approvals already in place. The innovative design, including the use of a dry crushing and grinding circuit, will deliver an industry-leading energy efficient operation with globally competitive capital intensity and operating costs.

“Our focus has been to create the most energy and cost-efficient ore processing facility, tailored to the specific ore we will mine.”

The Iron Bridge project is targeted to produce 22 million wet metric tonnes per year once full operational capacity is achieved.

First ore will be delivered in the first half of 2022, with ramp up to full production within 12 months at an all-in sustaining cost of $US45–55 per dry metric tonne.

This project will also deliver a premium product with iron content of 67 per cent, further enhancing the range of products available to Fortescue’s customers, according to Gaines.

When combined with the Eliwana development, the Iron Bridge expansion will increase Fortescue’s average product grade and provide the ability to deliver the majority of the company’s products at greater than 60 per cent iron, consistent with Fortescue’s long-term goal.

Coincidental to news of the approval, Fortescue has also updated the Iron Bridge’s magnetite mineral resource estimate, with ore reserves climbing up to 716 million tonnes on June 2018’s 705 million tonnes.

“This update supports the development of stage two of our Iron Bridge magnetite project announced today which holds Australia’s largest JORC compliant magnetite resource,” Gaines said.

“We are confident in the long-term demand for this premium product, supported by market fundamentals, including global supply conditions, investment in higher efficiency steel-making capacity, as well as the competitive advantage of proximity of the Pilbara to key markets in China and the region.

“We are ready to build this plant and develop this mine, and are confident that our early work will support rapid progress to full production.”

FMG Magnetite is a subsidiary of FMG IB, a Hong Kong registered company owned by Fortescue (88 per cent) and a subsidiary of Baosteel Resources International Company (12 per cent).

Barrick launches $25bn bid for Newmont

Barrick Gold has officially unveiled an offer to merge with Newmont Mining after several days of anticipation it would make a tilt for the gold rival.

The $US17.8 billion ($24.8 billion) all-share transaction would create the world’s largest gold company, with three Australian assets – the Super Pit and Boddington in Western Australia, and Tanami in the Northern Territory.

Barrick’s offer, however, represents a negative premium based on Newmont’s closing price on February 22. It also has the potential to derail Newmont’s $US10 billion plans to merge with Goldcorp, a deal the United States-based company believes offers better value than the Barrick tie-up.

Barrick chief executive officer Mark Bristow said the proposed merger with Newmont would unlock more than $7 billion of real synergies.

“The combination of Barrick and Newmont will create what is clearly the world’s best gold company, with the largest portfolio of Tier 1 gold assets and the highest level of free cash flow to drive future growth and support sustainable shareholder returns, run by a management team with an unparalleled record of delivering growth,” Bristow said.

A major portion of the synergies between the companies would be in Nevada, United States, where the deal would combine Barrick’s mineral endowments with Newmont’s processing plants and infrastructure.

Bristow said the proposed merger would secure Nevada’s position as the world’s most prospective gold region.

“Most important, it will enable us to consider our Nevada assets as one complex, which will result in better mine planning and fully realise the state’s enormous geological potential for all stakeholders,” Bristow said.

“Considered globally, the merger represents a radical and long-overdue restructuring of the gold industry, and a transformative shift from short-term survival tactics to the long-term creation of sustainable value.”

The Canadian company confirmed last Friday that it was reviewing the opportunity to make a takeover bid for Newmont following media speculation about a potential deal.

Barrick also completed a $US6.5 billion acquisition of Randgold Resources in January.

Newmont responded to the Barrick offer by stating it had a long history of evaluating potential transactions, and undertakes robust analysis and diligence on a continuous basis of acquisition opportunities.

“Newmont has previously reviewed and rejected potential combinations with each of Barrick and Randgold Resources, prior to their merger,” Newmont stated.

“Newmont’s proposed combination with Goldcorp represents the best opportunity to create optimal value for Newmont’s shareholders and other stakeholders.”

The company plans to fully evaluate the Barrick proposal and respond in due course.

Liebherr loads productivity into latest excavators

Liebherr is ready to strengthen the reputation of the R 9100/R 9150 excavators when its B versions of the machines arrive at Australian mines this year.

As the R 9100 has proved to be a worthy successor to the R 984 C excavators over the past seven years, Liebherr is convinced the B versions will add further benefits.

Liebherr delivered widespread improvements on the R 984 C with the R 9100 and R 9150, and set similar expectations during development of the new models.

The original versions have, however, provided a strong foundation for Liebherr to build on.

Liebherr launched the R 9100 in 2010 and the R 9150 two years later. Since 2012, the OEM has sold machines for operation in 21 countries over six continents.

The excavators have operated for more than one million hours at the mines, with a third of the machines recording more than 15,000 hours each.

They are used across operations for numerous commodities, including gold, coal, iron ore, copper, nickel and manganese.

Australian miners and contractors are amongst the users of the machines, including Blue Cap Mining, which operates two R 9150 excavators at gold sites in Western Australia and Queensland.

Blue Cap general manager Paul Allen says the R 9150 has many notable qualities that have made it suitable for the small hard rock operations where they are in use.

“We have seen both excavators perform well at different sites with different challenges,” Allen tells Australian Mining.

“Part of the reason we went for the 9150 was the specification and capacity of the machine, its hydraulic system and the additional power you are pulling in that unit – it has 565kW.”

Blue Cap pairs the excavators with haul trucks in the 100-tonne class, a match that been a strong fit for the designs of the pits at the gold sites.

Another key factor that helped the R 9150 stand out for Blue Cap was the technology Liebherr included on the machines, Allen continues.

“It was (at the time) more about some of the newer technology that Liebherr embedded around productivity and fuel efficiency,” he says.

“We are seeing around 15-20 per cent more efficiency out of this digger compared to some competition.”

With the success of Blue Cap’s R 9150 excavators, Allen has taken a keen interest in the updates incorporated on Liebherr’s updated models.

The B-version excavators were launched in January and the first machine in Australia will be received this month.

Liebherr senior product manager – mining excavators George Barturen backs the new excavators to drive productivity at mining operations, whatever the environment.

“Such systems are robustly designed and will be very well suited to the Australian mining environment from our extensive experience over the last five decades,” Barturen says.

“The B series machines, as was the R 9100 are suited to all mining and quarrying operators as the machine brings a competitive advantage regardless of the mined commodity with a reduced cost per tonne.”

Blue Cap’s R 9150 at the Red Dog site. image: Blue Cap Mining.

Stepping up operations

Liebherr’s updated hydraulic excavators have been developed to provide a step forward in performance and reliability, while lowering the cost per tonne.

Both models have received upgrades across the machine, including the latest generation of Liebherr’s D9512 engine, which offers an increased lifetime target of 15,000 hours, and other features that support maintenance efficiency.

The B versions include the exclusive EVO Bucket Solution, maximising loading capacity and ensuring optimal penetration efficiency.

With contoured sidewalls and augmented depth, the EVO Bucket has a 7.5m³ capacity on the R 9100 B and 8.8m³ and 9.6m³ on the R 9150 B, the latter being available on machines configured with a shorter boom.

The buckets match the excavators with the Liebherr T 236 truck, as well as other articulated and rigid trucks in the 50–100-tonne class.

Liebherr has positioned the R 9150 B directly between the 100-tonne and 200-tonne class machines with its bucket capacities. The R 9150 B begins to challenge the productivity of larger machines in the 200-tonne class with 12m³ buckets.

Barturen says incorporating the patented EVO Bucket design to the new machines is the most significant advance that increases productivity.

“This has brought about an increase in bucket payload with a reduction in bucket weight, whilst maintaining the same fast cycle time,” Barturen says.

“Additionally, the EVO Bucket for backhoe machines Liebherr is introducing several patented innovations together with machine functional control systems to provide the operator with semi-automatic functions increasing the overall efficiency and productivity of both machines.”

Barturen, a Liebherr employee since 1991, has worked closely with the company’s mining excavator team on the development of the B versions.

Alongside fellow Liebherr product manager Michel Runser, Barturen has guided the excavators through their final stages of development before launch.

“The main drivers in the development process were to improve the machine as a whole, enhancing machine safety, improving reliability and productivity KPIs and introduce operator comfort options, both active and passive.” Barturen says.

“The Australian mining industry drives continuous improvement of the machines through the different standards, guidelines and mining industry associations.

“Additionally, Liebherr has an internal global reporting system, which brings feedback directly into the factory from the field, speeding up the implementation and introduction of suggested improvements to suit the market, which is continuously driving improvement.”

Updated Liebherr engine

This series of Liebherr excavator was the first to introduce the OEM’s own diesel engines, a milestone reflected in the B versions. The R 9100 B and R 9150 B are equipped with Liebherr’s latest D9512 V12 diesel engine, which exists in Tier 2 and USA/EPA Tier 4 final version.

Liebherr Australia executive general manager, customer service, Tony Johnstone says the company’s service team has updated its skillset to support the new engine since its introduction.

Johnstone believes this has led to a new approach for the team, which has previously serviced and maintained engines from other OEMs.

“For us the challenge has been the development of our service technicians to be ready to work on the machines, understand the systems and be able to provide the best services that are required for customers,” Johnstone says.

“We’ve also had the challenge of upskilling our technical trainers so that we could train all of our service technicians in the Liebherr engine.”

Liebherr’s Australian-based technicians completed training on the engines in the company’s Switzerland engine factory certified training centre, with focus on control systems, maintenance and diagnostics.

In addition, customer training will be provided by Liebherr certified trainers at the new technical training centre at the Para Hills West facility in Adelaide.

The company has also ensured it has widespread availability of the unique service and maintenance parts for the engine.

“We had to stock appropriately for parts and for the future which we are working on now; we are enabling our remanufacturing centre to rebuild and run the D95 series engine,” Johnstone says.

“It has been a ground up approach because it was the first Liebherr engine in a Liebherr mining excavator.”

Liebherr’s preparation for the change of engine has the services team well placed to support the B versions once they arrive in Australia.

The R 9150 B will also be available in electric drive.

The updated features of the B version machines. Image: Liebherr.

Comfort and safety first

The B-version machines feature an upper structure that is accessible via a robust fixed ladder or 45-degree access stair in option. It integrates one large central platform equipped with slip resistant surfaces.

Liebherr has designed the new arrangement with wide catwalks to facilitate maintenance and to ensure comfort during operations.

“Included in the upgrade was the integration of hard safety systems – an improved catwalk on the left side of the machine, together with a handrail installation on the counterweight for added safety during machine and engine maintenance tasks,” Barturen says.

“Integration of HEPA filtration of the operator cabin is available should the requirement be needed.”

The cab, updated with improved ergonomics and operator attenuation, provides the ideal working platform and optimal comfort for operators.

Liebherr’s resiliently mounted cabin on ISO mounts reduces vibration, while a new cabin interior liner provides a two decibel decrease in noise levels in the cabin for the operator.

Technology advances

Liebherr has shown its awareness of modern connectivity needs, equipping the B version machines with GSM data transmission, together with the ability to transmit on customer site networks to provide operating parameters, error codes and machine faults.

Machine end users can access the data through the Liebherr Mining Data (LMD) platform, and generate custom reports to track and analyse machine data.

Barturen says the excavator product team focused on Liebherr’s six pillars of mining: safety and environment, productivity, efficiency, reliability, customer service, safety, and environment when enhancing the machines with technology.

“Improvements to the machines’ operating systems provides enhanced machine operational efficiency. Together with the integration of machine data management and analytics, the B series will enable customers to increase the effective utilisation of the machine in lowering the cost per tonne,” Barturen says.

“Customer service is enhanced by on board systems for the management of the machines’ maintenance and reliability interfacing with the Liebherr developed Troubleshoot Advisor.”

The data collected by the connectivity kit is recorded in a worldwide database for processing and assessment by Liebherr.

RCR finds buyer for energy division

The Environmental Group Limited (EGL) has secured a deal to purchase RCR Tomlinson subsidiary RCR Energy Service.

Melbourne-based EGL is dealing with the beleaguered engineering group’s administrator McGrathNicol to make the acquisition, which should be completed within the next week.

RCR Energy Service’s primary focus is on commercial gas and steam boilers, as well as thermal oil heaters and hot water heaters.

Perth-based RCR Tomlinson made headlines last November with the announcement of its administration due to insurmountable money problems, including around $630 million in debts.

The company saw a massive 60 per cent share wipe out in August last year and by the time of its administration its value hovered around 85–87 cents, down from $2.12 at the end of July.

In particular, the company suffered severe financial issues related to several failed solar farm investments — two Queensland solar projects saw a combined write down of $57 million, for example.

Despite this, EGL has cited RCR Energy Service’s “strong track record of profitability” as an attractive quality of the acquisition.

The company generated $21.5 million in sales and $1.5 million in earnings before interest and tax (EBIT) in the 2018 financial year.

RCR Energy Service’s senior management team will transfer to EGL once the acquisition is complete and the company will operate under the name Tomlinson Energy Service.

“EGL will continue to pursue new growth and acquisition opportunities that fit our environmental platform,” EGL chairman Lynn Richardson said.

“This will provide existing and new shareholders with the benefits of investment in a company committed to reducing pollution and the effective use of world resources.”

EGL did not reveal the cost of the acquisition at the request of McGrathNicol, but this information should be made available by the end of January. The acquisition will be funded by EGL’s existing debt facilities.

Massive steel plant plans for SA

INSIDE CONSTRUCTIONJanuary 8, 2019, 9:28 am 150

CFG Alliance is planning to construct a steel plant in Whyalla, South Australia, which will be the largest in the western world, according to company chairman Sanjeev Gupta.

Gupta announced the new project, Next-Gen Steel, alongside Prime Minister Scott Morrison and leader of the opposition Bill Shorten at a press conference in Whyalla on December last year.

“This is the turnaround state, and this is the comeback city in Australia when we’re talking about Whyalla,” Morrison said.

The project will create a new steel plant for Whyalla capable of producing 10 million tonnes a year.

Gupta also announced that the existing Whyalla steelworks would also be transformed through a $600 million investment into a 1.8 million tonnes a year steel producer.

GFG Alliance purchased the steelworks in 2017, saving hundreds of jobs in the process.

The company signed two contracts with Danieli and CISDI Engineering for the development of rail and structural heavy section mill and a pulverised coal injection (PCI) plant respectively over the next three years at Whyalla.

“The transformation will vastly improve the operations, financial and environmental performance of the operations, paving the way for Whyalla to become an enticing, global hub for innovative industry,” Gupta said.

The creation of the new next-gen steel operation with a capacity of 10 million tonnes a year (and the infrastructure to eventually double that capacity) and the upgrades to the current Whyalla operation is expected to increase the town’s population fourfold to around 80,000.

“This is a major boost for our long-term outlook and gives Whyalla City Council and other industries and businesses more confidence to be able to plan for the future,” said Clare McLaughlin, Whyalla mayor.

“The plant will also have state-of-the-art environmental controls, which is yet another positive for the community on top of the financial investment and job creation.”

RCR Tomlinson administrators reveal debts of up to $630m from collapsed engineering firm

By Kathryn Diss

Updated Tue at 12:20am

A line of about 30 people holding takeaway coffees and folders.

PHOTO: RCR Tomlinson creditors are owed hundreds of millions of dollars. (ABC News: Glyn Jones)

The administrators of failed engineering firm RCR Tomlinson have revealed the company has debts totalling hundreds of millions of dollars, including up to $250 million owed to about 4,000 subcontractors and suppliers.

Key points:

The engineering firm ran into trouble after an aggressive move into solar
A total of $630 million is owed to creditors, subcontractors and suppliers
The collapse came after a $100m injection of funds just three months ago

Administrators McGrathNicol revealed to creditors across the country that RCR’s total unpaid debts amounted to up to $630 million, but it could not say how much was recoverable until it started to sell off parts of the business.

The company, which employed 2,800 people directly and engaged with thousands of subcontracting firms across dozens of projects around the country, went into administration last month after its bank refused to lend it more money to pay its debts.

At its peak in August last year, RCR Tomlinson was valued at almost $1 billion.

Since McGrathNicol was appointed, the company’s workforce has reduced by 270, with most of the redundancies coming from the infrastructure arm, which includes its solar contracts.

Employee entitlements excluding redundancy total $32 million. Under the Corporations Act, employees are paid first, followed by secured creditors, unsecured creditors and shareholders.

RCR creditors — who is owed what

Trade creditors (subcontractors and suppliers) — $100-250 million
Secured creditors — $235 million
Unsecured bond issuers — $113 million
2,800 employee entitlements totalling $32 million, excluding redundancy

Burned by solar

McGrathNicol partner Jason Preston told creditors initial investigations revealed the company’s collapse was largely caused by problems with its solar farm developments, which left the business exposed to a number of risks, particularly if there were project delays.

This was attributed to the way in which the contracts were structured.

RCR signed engineering procurement and construction contracts, or EPCs, for its solar projects, in which it provided a fixed price for its customers.

If the contract took longer to complete, and therefore cost more to deliver, RCR had to absorb the increase.

PHOTO: RCR Tomlinson’s work on two solar farms in Queensland were hit with a $57m writedown. (Supplied: RCR Tomlinson)

This meant the company consumed “significant amounts of cash very quickly,” McGrathNicol told creditors.

The administrators indicated they were likely to apply to push the next creditor’s meeting back by three months due to the complex nature of the business, adding the RCR group was made up for 41 companies spanning a number of sectors including, energy, mining, resources, water and renewables.

The company had been a successful engineering firm for 120 years — predominantly in the mining and resources industry — before making its aggressive move into the solar industry.

RCR ran at the solar power movement hard and has been involved in building farms across the country, but it was a $57 million write-down on the value of two of its Queensland projects that burned it.

A stunning collapse

It was the failure of an engineering firm that left many reeling — so what went wrong for RCR Tomlinson?

At the first meeting creditors, held across four states, McGrathNicol told suppliers, contractors and employees it was working to sell the business but could not quantify how much it would raise in the sale.

McGrathNicol last week managed to secure funding to support ongoing trading of the company and said it hoped to find a buyer or buyers by the end of the year, having received interest from more than 180 parties.

“Our priority is to prepare the business for sale to bring certainty to employees, customers and suppliers,” McGrathNicol partner Jason Preston said.

“The business has been challenged by unprofitable solar contracts within its renewable operations, however the balance of the business operates across industries which are seeing increasing demand for services.”

Among the solar projects left in limbo include the expansion of Synergy’s Greenough solar farm in Western Australia’s Midwest.

A wide shot of rows and rows of solar farm panels on the ground at a solar farm under a blue sky.

PHOTO: RCR Tomlinson was working on the expansion of the Greenough River Solar Farm in WA’s Midwest. (ABC News: Sarah Tallier)

The energy utility has terminated its contract with RCR and has started the process of finding a new contractor.

Site activities will remain suspended during the replacement process.

Subcontractors gravely concerned

The company owes between $100 million and $250 million to 4,000 trade creditors across the country, which includes subcontractors and suppliers.

A line of people snakes through the foyer of a building.

PHOTO: Dozens of creditors queued up to find out how much money they could expect to get back following the collapse. (ABC News: Glyn Jones)

Mike Hollier runs a metal fabrication business which was working for RCR’s power division.

“I’m owed $42,000, part of that is made up of $27,000 of gear that they have and the rest sitting in the yard, which is about $13,000,” he said.

“It was a big shock, they’re a big company, you don’t expect that sort of thing. No, I didn’t think they’d go under.

“I don’t really know what will happen to all the stuff I have supplied to them when they sell it off. It seems I’d lose that from what I can gather.”

Mike Hollier in mid-speech, wearing a yellow shirt and reading glasses on his forehead.

PHOTO: Mike Hollier runs a metal fabrication business and is owed about $42,000. (ABC News: Glyn Jones)

Marco Da Silva said he was hopeful the business would be sold, but was not confident of getting the $25,000 he was owed.

“Ideally, we’d like to get our money, so hopefully they can sell the businesses off in their individual capacity and we can continue to trade out of that,” Mr Da Silva said.

“It’s negative, but one has to remain unemotional and try and apply themselves and focus on the business and do the right things by the staff.”

Marco Da Silva wearing a blue and green shirt, speaks to a journalist.

PHOTO: Marco Da Silva is not confident of getting the $25,000 he is owed. (ABC News: Glyn Jones)

Australian Subcontractors Association board member Louise Stewart said she had grave concerns leaving the meeting.

“I’m very concerned. There was no talk of a project bank account being set up. RCR haven’t been paid by a number of their clients, the project owners, the principals that actually own the projects,” Mrs Stewart said.

“What we don’t want to happen is for those funds to be paid directly to RCR, who are now in administration, and those monies to be used to pay secured creditors.

“Subcontractors are the biggest class of creditor affected here.

“We want to see that money going to subcontractors who have done the work, they should be paid and it’s very important that happens.”

Collapse after a $100m injection of funds

The collapse of the business, which is one of the oldest engineering names in Australia, stunned many in the investing world.

Just three months ago, RCR raised $100 million from shareholders to buffer itself against the losses it had incurred on the solar projects, but it wasn’t enough to save the business.

The move led many in investor circles to question what the board had not been telling shareholders and raised questions about whether the nation’s corporate regulator, the Australian Securities and Investments Commission (ASIC), would get involved.

Areial shot of the Curtis Island LNG plant

PHOTO: The collapse of the business stunned many in the investing world. (www.rcrtom.com.au)

The company is also facing a class action which was launched on behalf of shareholders in the New South Wales Supreme Court.

Lawyers Quinn Emanuel Urquhart and Sullivan filed the action, saying investors paid too much for their shares because the market was not informed of the problems the company was having with their solar projects.

Fundamentally, many analysts said the company ran too hard at the solar game without knowing enough about it, and found itself working in an environment of rising equipment costs, increasing wages and a lack of workers skilled in the renewable energy space.

Penrith substation maintenance work being done by RCR Tomlinson emplyees

PHOTO: RCR Tomlinson has more than 3,400 employees working on projects around Australia. (Supplied: RCR Tomlinson)

It also underestimated the time it could take to gain grid approval from the nation’s electricity regulator, the Australian Energy Market Operator (AEMO), which has toughened its testing regime to ensure reliability of the network.

RCR’s collapse prompted AEMO to issue a warning to all new entrants to “discuss early with network businesses … prior to making commercial commitments” so as to “avoid delays during project development, registration and commissioning”.

McGrathNicol said it would like to ask for a three-month extension for the second meeting with creditors to give more time to investigate what went wrong with the business.

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Topics: business-economics-and-finance, industry,

BHP’s South Flank to receive world’s largest rail-mounted stackers and reclaimer from thyssenkrupp

thyssenkrupp Industrial Solutions has been awarded one of the largest fabrication and construction projects the company has ever handled in Western Australia, with an order from BHP’s South Flank iron ore operation.

Under the €150 million ($171 million) contract, thyssenkrupp will design, supply, construct and commission large-scale stockyard machines for South Flank, in the central Pilbara region.

BHP is targeting first ore extraction at the operation in 2021 and expects to ramp up to 80 Mt/y of output. This will replace production from the existing Yandi mine, which is reaching the end of its economic life. The company carried out the first blast at the project in September.

thyssenkrupp will supply two stackers that deposit iron ore into stockyards for loading, and a reclaimer for loading the ore on to trains for transport to Port Hedland. The machines will have a capacity of 20,000 t/h, making them the largest rail-mounted stackers and reclaimer in the world, according to the company.

Torsten Gerlach, CEO Mining Technologies at thyssenkrupp Industrial Solutions, said: “South Flank will be one of the largest iron-ore operations worldwide. We look forward to contributing to this project by combining longstanding global expertise in the mining business with local experience.

“Our strong partnership with BHP extends globally, but the Pilbara region is a core area where we have provided material handling solutions for decades. With our field service teams, we are supporting our customer on a daily basis.”

The design of the machines incorporates the latest Australian design standard requirements and technology improvements centred on safe construction, operation and maintenance activities, according to the company.

Subbies call for overhaul of system to protect themselves from corporate failures

Australia’s subcontractors are demanding the government legislate on how building firms structure bank accounts amid claims that corporate failures in the construction sector are causing a “crisis” and leaving suppliers without payments.

The Australian Subcontractors Association (ASA) demands that the Federal government take swift action to protect suppliers who are being “forced into insolvency” by the collapse of larger construction firms.

This comes after the recent collapse of engineering giant RCR Tomlinson, which had delayed payments to suppliers for up to 12 months.

“When it comes to the collapse of companies that rely on subcontractors to undertake the work, the domino effect can be devastating. Unfortunately, the subbies are often left to fend for themselves,” said Loise Stewart, ASA spokesperson.

“When companies fail to pay subcontractors for work done, the subbies still have to pay employee entitlements and taxes.

“Thousands of subcontracting businesses will be adversely impacted by the recent collapse of engineering firm RCR Tomlinson – in just the latest example of the flow-on effects to SMEs from corporate failures.”

A 2015 Senate inquiry into insolvency found that the industry is burdened every year by an estimated $3 billion in unpaid debts, including subcontractor payments. In 2018 alone, there have been 1,642 construction businesses that have become insolvent. A high percentage of these is attributed to misconduct.

“Sadly, non-payment issues have long plagued the industry – as evidenced by the subcontractor to RCR Tomlinson that has lost $9 million due to the company not paying for work done,” Stewart said.

“We have been advised by subbies that RCR has been delaying payments as far back as 12 months in order to prop up its own cash flow. And it’s unlikely any of these subcontractors will see their money.”

The ASA is now calling on the Federal minister for small business Michael McCormack to take action to protect subcontractors “all the way down the supply chain in the event of an insolvency”.

“The Federal government Review of Security of Payment Laws by John Murray has already made recommendations for cascading statutory trusts to be rolled out across the industry, however, there has been no further action,” Stewart said.

“When Craig Laundy was minister for small business, he said if state governments did not act before the end of the year, the Commonwealth would take action. We are still waiting for that to happen.”

Stewart added that national legislation is needed, and either cascading statutory trusts or cascading project bank accounts must be mandated.

“The Queensland government is certainly taking the lead on this and has made project bank accounts a legal requirement,” Stewart continues.

“However, greater responsibility needs to be taken at all levels. Governments need to act to legally impost these solutions and ensure pay subcontractors, rather than spending their money.”

RCR Tomlinson announced on November 22 that it had entered voluntary administration with the intention of commencing an immediate sale process.

McGrathNicol is the appointed administrator. The first meeting of creditors will be held simultaneously in four locations (Sydney, Brisbane, Melbourne and Perth) on December 3, 2018.

At the time of its collapse, the ASX-listed group employed more than 3,400 people in Australia, as well as in New Zealand and other areas within Southeast Asia.