Category: News

Weir completes acquisition of ESCO Corp

The Weir Group has completed the acquisition of ESCO Corp, the world’s leading provider of ground engaging tools for surface mining and infrastructure markets, for an enterprise value of $1,285 million.  It follows regulatory clearance for the transaction, which was first announced on 19 April 2018.

Commenting, Weir Group Chief Executive Jon Stanton said:“We are delighted to formally welcome ESCO to Weir.  It is a great brand that is respected throughout the world for its quality, performance and reliability.  ESCO’s strength in extraction complements our leadership in the mill circuit, meaning that together we will have a comprehensive offering for mining companies around the world.”

Current ESCO President and Chief Operating Officer Jon Owens will continue to lead the business as it becomes a division of the Weir Group.  He will also join Weir’s Group Executive committee with immediate effect.

Owens said: “This is an exciting day for ESCO and all our people.  As part of Weir we can create something that is genuinely unique that will help more customers improve their productivity and safety.  No other mining equipment provider will be able to offer customers market-leading solutions from extraction to concentration supported by a service centre network that covers every major mining region in the world.”

ESCO has surface mining’s most extensive installed base of lip systems that house short-cycle consumables, such as teeth, shrouds, adaptors, blades and locking systems, with aftermarket sales representing about 90% of ESCO revenues.  ESCO’s extraction products sit upstream from Weir’s traditional strength in slurry handling equipment with market leading brands including both Warman® and GEHO® pumps, Cavex® hydrocyclones and Linatex® rubber products.

ESCO was founded in Portland, Oregon, in 1913 and currently employs around 2,600 people with operations in 19 countries.  In 2017 it generated revenues of $632 million.

Ricardo Garib, Division President of Weir Minerals, said the combination would be beneficial to customers around the world: “It is great to welcome ESCO to Weir.  They are a business we have admired for some time.  By working together we’ll be able to give customers easier access to more market-leading products and services.  With our global network of over 100 service centres, that means customers will have more of the superior solutions they require, where and when they need them.”

Joe Weber, Vice President of Global Sales for Weir’s ESCO division agreed: “As mining markets grow customers are looking for partners they can trust to help them increase productivity and safety while also lowering their total cost of ownership.  That requires a relentless focus on innovation, quality and close customer proximity, which are the hallmarks of the ESCO® brand.

“As part of Weir we’ll benefit from combining some of the world’s leading materials scientists, applications engineers and developing digital technology to deliver increased innovation in the future, ensuring ESCO remains surface mining’s preferred provider of ground engaging solutions.”

This Steel Producer Is Building a $240m Plant

Nucor Corp. will build a $240 million galvanizing line at the company’s sheet mill in Arkansas. The new line will have an annual capacity of approximately 500,000 tons and is expected to be operational in the first half of 2021.

The project is in addition to a $230 million investment currently underway to build a specialty cold mill complex at Nucor Steel Arkansas. These projects are part of Nucor’s strategy to increase its automotive market share.

Galvanizing is the process of applying a protective zinc coating to steel or iron, to prevent rusting. The most common method is hot-dip galvanizing, in which parts are submerged in a bath of molten zinc.

Cold rolled steel is processed in cold reduction mills, where the material is cooled at room temperature followed by annealing or rolling. The process produces steel with closer dimensional tolerances and a wider range of surface finishes.

Nucor says it is also evaluating building additional galvanizing lines at its other sheet mills as part of efforts to further expand its sheet business.

Nucor and its affiliates manufacture steel products, with operating facilities primarily in the U.S. and Canada.

Biggest wind farm in the southern hemisphere proposed for Victoria

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In development since 2006, the proposed $1.7 billion Golden Plains Wind Farm would sprawl across 167 square kilometres of farmland near the small town of Rokewood in southwest Victoria, about 40km south of Ballarat.

The wind farm would consist of 228 turbines – each standing 230m tall at their highest point, and will have an energy generation capacity of between 800MW and 1000MW.

According to planning documents, the wind farm would produce up to 3500 gigawatt-hours of energy a year – equal to the average annual energy consumption of at least 450,000 homes.

The project’s proponents, the German-backed, Gisborne-based company West Wind Energy says it hopes to begin construction sometime next year, but the project still requires planning approval from the Andrews state government. A planning panel will consider the proposal at a hearing due to begin on July 30.

The planning documents state that if the project gets the green light, the wind farm would begin to operate by 2021 and be in full flight by 2025. It would then be decommissioned and pulled down sometime after 2050.

 

Federal budget 2018: $24B for new infrastructure projects

The federal government handed down its 2018-19 budget this week and $24 billion has been earmarked for infrastructure projects.
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The big spend on infrastructure is forecasted provide four-fold benefit to the economy, i.e.   every dollar the government invests will deliver a $4 return to the economy.

This $24 billion allocation puts total federal government investment in infrastructure projects over the next decade at $75 billion.

The 2018-19 package

Rail and road infrastructure is the major focus of this year’s budget and new national initiatives include $3.5 billion on roads of strategic importance – $1.5 billion for the Northern Australia Package, $400 million for the Tasmanian Roads Package, $100 million for the NSW and ACT Barton Highway Corridor Package and $1.5 billion for future national priorities – $1 billion Urban Congestion Fund, and $250 million for Major Project Business Case Fund.

Turning to the states and territories, the biggest winner this year is Victoria which was allocated $7.8 billion. This includes $5 billion for the Melbourne airport rail project, $175 billion for the North East Link, and $475 million for Monash Rail.

The $24 billion in new infrastructure investment also includes:

  • $5.2 billion for Queensland including $3.3 billion for the Bruce Highway extension, $1 billion for the M1 expansion, and $390 million for Brisbane Metro.
  • $2.8 billion for WA of which $1.05 billion will go towards Metronet Rail, $944 million to Perth’s congestion package, and $560 million for the Bunbury Outer Ring Road.
  • $1.8 billion for South Australia. $1.2 billion will be spent on the North-South Corridor and $220 million on the Gawler Rail Line electrification.
  • $1.25 billion for NSW including $971 million for the Pacific Highway Coffs Harbour Bypass and $400 million for the Port Botany Rail Duplication.
  • $921 million for Tasmania of which $461 million will go towards replacing the Bridgewater Bridge. $400 million will be allocated to a Tasmanian road package.
  • $259.6 million for the NT, including $180 million for the Central Arnhem Road upgrade and $100 million for the Buntine Highway upgrade.

2018-19 budget papers can be found here.

FLSmidth realignment to focus on mining and cement

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FLSmidth will realign the global group from July, with focus on the mining and cement industries.

The organisation announced last week it would focus on the two industries, supported by a regional setup that would aim to strengthen customer focus and lifecycle solutions, combined with a new central digital organisation.

FLSmidth’s plan will realign the organisation from four divisions into the two aforementioned industries. From a country perspective, it will deliver an agile regional structure, according to FLSmidth.

With end markets recovering, group chief executive Thomas Schulz said FLSmidth’s customers were accelerating to invest in productivity enhancing and digital solutions.

“To support our customers’ growth, the two industries, cement and mining, will deliver integrated productivity offerings through the regions,” Schulz said.

“Our decentralised organisation will give us a strong point of entry to offer our customers key products, shorter delivery times and a strong service setup.”

The two industries will be supported by seven regions: Australia, North America, South America, Europe, Russia and North Africa, Sub-Saharan Africa and Middle East, Asia, and Subcontinental India.

According to FLSmidth, the regions will drive customer relations, sales and service for both industries. A central digital organisation will drive an enhanced, unified approach to digitalisation.

Schulz said this new way of working was a natural step forward for FLSmidth.

“We already have one of the strongest brands in the cement and mining industries. By enhancing our service level, investing in digitalisation and bringing stronger life-cycle offerings to the market, we will expand and grow our wallet share with targeted customers,” Schulz said.

Weir to acquire ESCO for $US1.28bn

Weir has entered into an agreement to purchase US ground engaging tools (GET) specialist ESCO for $US1.28 billion ($1.67 billion).

The transaction has been approved by Weir’s board of directors and is not subject to shareholder approval.

As part of the acquisition, Weir will gain access to ESCO’s 10 manufacturing facilities, six foundries and 22 service and supply centres, in 19 countries.

Weir hopes it can leverage ESCO strong position in the GET sector to prioritise upstream growth opportunities in the minerals and oil and gas sectors; around 40 per cent of large primary mover machines across the globe utilise ESCO product.

ESCO chairman and chief executive officer Cal Collins called the merger exciting, stating: “[It] combined two premium brands and positions us to better serve our customers around the world. The merger of ESCO into Weir is also a great fit, both culturally and strategically.”

GET parts include the likes of teeth (usually for shovels and drag lines), blades, shrouds, locking systems and other edge wear parts. ESCO brands include the Nemisys lip system and Ultralok mining tooth system, which Weir intends to bring to new territories via its extensive global network.

Weir Group chief executive officer Jon Stanton called ESCO a “leading global brand” that would allow Weir to pursue new revenue opportunities.

“Together, Weir Minerals and ESCO will create a unique customer proposition as the premium provider of mission critical surface mining solutions from extraction to concentration, built on proprietary technology superior wear life and supported by an unrivalled service network.”

Coal wagon delivery bolsters Aurizon in the Hunter Valley

Rail operator Aurizon has received a newly-built batch of coal wagons at the Port of Newcastle in New South Wales.

Aurizon has described the development as a clear symbol of the continuing growth in coal exports and Hunter Valley’s coal industry employment.

Catherine Baxter, Aurizon’s general manager in NSW, said the 32 wagons in the consignment were only one part of a 284-wagon order, with each wagon having capacity to carry up to 97.8t of coal.

“These wagons will enter service for our newest customers, AGL Macquarie and MACH Energy, demonstrating the strong growth we have seen in our New South Wales Coal haulage operations since we started in 2005,” Baxter said.

“Our coal haulage has increased from 180,000t in 2005 to 48Mt in 2017, underlining the broader opportunities in the coal sector for regional employment and income generated in, and for the local community.”

The Minerals Council of NSW revealed last month that stronger coal prices have added more than 1000 mining jobs in the Hunter Valley over the past year.

“When we started out in the Hunter Valley, we had less than 10 employees and we now proudly employ more than 450 people across our operations,” Baxter said.

Australian coal exports have also continued to grow in value, with 2017 exports valued at $56.5 billion or 35 per cent higher than in 2016, according to Department of Trade and Foreign Affairs’ data.

Mineral Resources to acquire Atlas Iron

Mineral Resources (MinRes) has secured a deal to acquire iron ore company Atlas Iron through a scheme of arrangement that values the target at around $280 million.

The amalgamation of MinRes’ Pilbara iron ore assets with those owned by Atlas would deliver greater synergies and economies of scale, a MinRes announcement explained.

MinRes stated that a combined entity would drive down operating costs to ensure the consolidated iron ore business would be sustainable in the new environment of lower global prices for low-grade iron ore.

Under the proposal, Atlas shareholders will receive one new MinRes share for every 571 shares they hold. Based on the closing prices of both companies on April 4, this is a 59 per cent premium on Atlas’ value.

Atlas’ board has unanimously recommended that its shareholders vote in favour of the agreement and intends to back the deal in the absence of a superior proposal.

MinRes managing director Chris Ellison said the acquisition of Atlas, which would include a portfolio of iron ore assets and export capacity allocation at Utah Point, was on strategy for the company.

“The culture that has been developed within Atlas is an exceptionally good fit with that which has been fostered in MinRes,” Ellison said.

“The majority of the Atlas senior leadership team have been running the business for many years and their skillset, experience and intimate knowledge of the Atlas business will be an extremely valuable asset within the consolidated Atlas-MinRes business.”

Atlas’ key assets include the Abydos and Mt Webber mines in the Pilbara region. The company also owns the Corunna Downs project, which it approved for development last year until a fall in iron ore prices.

Cliff Lawrenson, Atlas managing director, said the combination with MinRes would not only protect, but also enhance the company’s business.

“The combined organisation will have the scale and financial security to support current operations, as well as providing access to capital to contemplate further development opportunities,” Lawrenson said.

“The scrip nature of the scheme also delivers a number of key benefits to Atlas shareholders, including; retained exposure to Atlas, the opportunity to benefit from potential synergies driven by the combination and greater diversification of revenue and commodity exposure.”

MinRes expects the acquisition will be completed by August this year.

In addition to the deal, MinRes and Atlas have created an alliance after they identified a range of opportunities they could progress together.

The companies will pursue several existing and potential future commodity opportunities. They will create a new vehicle, to be controlled by Atlas, that will be responsible for managing lithium and manganese operations.

MinRes will provide the initial working capital for these operations, before Atlas funds the initiative moving forward.

Dalgaranga two months from gold production

Gascoyne Resources is two months away from producing first gold at the Dalgaranga gold project in Western Australia.

The company today reported that process plant construction is 90 per cent complete and it is on schedule for wet ore commissioning and first gold in May.

Installation of the SAG mill, crusher and mechanical equipment are “well advanced”, according to Gascoyne, while electrical installation is under way and water services have been commissioned and handed over to the operations team.

“GR Engineering has progressed significantly with the design, engineering and construction of the 2.5 million tonne per annum Dalgaranga processing plant,” The company said in an ASX announcement.

“Design and engineering is complete and construction over 90 per cent complete with completion expected in around two months, approximately one month ahead of schedule.”

Dalgaranga’s mining contractor, NRW Holdings, has launched mining at the Sly Fox, Golden Wings and Gilbey deposits, with a fleet of four excavators and 18 trucks mobilised to site.

Construction of the mining workshops and associated facilities is continuing and expected to be operational by the end of this month.

FLSmidth completes acquisition of Sandvik Mining Systems projects business

With the transfer of assets in South Africa now completed, the previously announced acquisition of the Sandvik Mining Systems projects business has been finalised. The acquisition includes continuous surface mining and minerals handling technologies and competences that strengthen the company’s core minerals business.

By integrating the mining systems projects business into its offerings, FLSmidth closes the gap and covers a wider range of the full mining value chain from the primary crushing point in the mine and the transport from pit to plant all the way through the minerals processing plant to the tailings handling.

“With the completion of the South African assets we have added references, local expertise and improved ability to deliver complete solutions to our Sub-Saharan customers. We welcome our new colleagues and customers to FLSmidth,” said Manfred Schaffer, Group Executive Vice President, Minerals Division.

As part of the transfer, FLSmidth will either assume existing orders or provide project management services on behalf of Sandvik on selected ongoing projects and supply parts and services for the installed equipment.