Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
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Aecon Group’s Lockerbie and Hole Eastern Division has signed a letter of intent with the Potash Corp of Saskatchewan for a project valued at over C$250 million to install the interior of a new process mill at the mine site near Rocanville. The scope of work for the project includes the installation of all utilities and equipment for the new mill, including the process piping, electrical, mechanical, instrumentation, HVAC, and all processing equipment in the mill, where potash ore from the nearby mine will be processed.
This project will create approximately 800 jobs at the construction site. Site preparation is expected to begin in early 2012 and this portion of the project is scheduled for completion in the fall of 2013, ready to turn over to PotashCorp for commissioning and startup.
This builds on October’s award of a similar project on a smaller scale at the PCS Picadilly mine in New Brunswick. This project brings the total value of projects announced by Aecon since September for a number of clients to over C$850 million.
PotashCorp believes new potash supply will be required in coming years to keep pace with rising demand. In 2003, it began a C$7.5 billion expansion program designed to raise annual operational capability at existing mines to 17.1 Mt by 2015 – approximately double the 2005 level.
By mid-2011, two-thirds of this expansion capital was already spent and five parts of a nine-project program were completed. The company is continuing work on the remaining four expansions at Cory, Allan, Rocanville and New Brunswick. Operational capability is expected to grow in each of the next four years, providing the opportunity to significantly increase sales volumes as demand for potash rises.
“Our Lockerbie and Hole Eastern division has more than 40 years of experience installing the complex mine site equipment and systems needed to operate processing plants like this one,” said Teri McKibbon, Aecon’s COO. “People around the world rely on Canada and PCS to mine and process potash. We are extremely proud to be part of an industry that helps put this country on the world stage.”
