Suppliers Roundup (September 26, 2005)

Finning does deals down south

Finning International (FTT-T), sellers of Caterpillar heavy equipment, says its South American business has sold three equipment packages and maintenance contracts worth a combined $250 million to customers in Chile and Argentina.

“Robust commodity prices have supported our customers’ decisions to expand their production capabilities by acquiring additional equipment and renewing existing fleets,” says Finning CEO Doug Whitehead.

At the Spence copper project, near Sierra Gorda in northern Chile, Finning will service and maintain equipment under a $57-million, 3-year maintenance contract with Compania Minera Riochilex, most of which is held by BHP Billiton (BHP-N, BHP-A), with the balance belonging to London-based Rio Tinto (RTP-N).

Spence hosts oxide reserves of 79 million tonnes grading 1.18% copper and sulphide reserves of 231 million tonnes grading 1.13% copper.

The Spence deal is the most recent transaction under an agreement that began in February 2003 between BHP Billiton and Caterpillar.

The maintenance contract at Spence covers twenty-one 793 trucks, two 994D front-loaders, and other support equipment, which started arriving in March. Finning recently sold four more 793 trucks to Riochilex for $9 million, and all of the equipmemnt should be commissioned by May 2006.

In another deal, Finning sold 33 Caterpillar production and support machines worth $43 million, as well as a $55-million, 5-year maintenance contract to Anglo American Chile, a division of Anglo Base Metals, owner of the Mantoverde copper mine in Chile. Finning will service the entire Cat fleet at Mantoverde, which has reported reserves of 350 million tonnes at 0.7% copper.

At the Veladero gold project in Argentina, Finning will deliver 17 pieces of Caterpillar equipment to Minera Argentina Gold S.A., a unit of Barrick Gold (ABX-T, ABX-N). The $35-million equipment package includes twelve 793 mining trucks, two D11R bulldozers, two 16H motorgraders and one 854G wheel-dozer.

Finning will deliver the new machines to Minera Argentina Gold in February 2006. They will be covered through November 2009 by maintenance contracts worth a combined $51 million.

Finning sells, rents, finances and provides customer support for Caterpillar equipment and engines in Western Canada, the U.K., and South America.

Raglan plant treats more runoff

The water runoff treatment plant at Falconbridge‘s (FAL.LV-T, FAL-N) Raglan nickel mine in northern Quebec is treating roughly 50% more water than it was a year ago.

The plant, designed by Vancouver-based BioteQ Environmental Technologies (BQE-V) to handle wastewater from mining operations, can now treat up to 180 cubic metres of nickel-heavy runoff per hour (625,000 cubic metres annually, based on a 5-month operating season), a 50% increase from the 120 cubic metres being treated a year ago.

The increase comes as a result of modifications BioteQ made to the plant. Treated water quality remains below 0.15 parts per million nickel, compared with the target of 0.5 parts per million.

The Raglan plant employs BioteQ’s proprietary biosulphide nickel treatment process that selectively recovers nickel from low-grade wastewater. The treated water can be released directly into the environment.

The plant at Raglan opened in mid-June, 2004, and BioteQ receives 63 monthly payments of $24,500 per month until January 2009, roughly covering BioteQ’s costs. There is an additional charge of $1.06 per cubic metre of water treated, with a minimum of 550,000 cubic metres slated for treatment each year.

BioteQ designs, builds and operates water-treatment plants that recover salable metals.

Quadrem keeps growing

Quadrem, the online market for mining and construction equipment, is on track to deliver its best year ever.

The company expects to have 1.4 million purchase orders worth US$6 billion by the end of 2005, a 50% increase over 2004. Meanwhile, Quadrem’s trading network has grown 131% to 400 purchasing agents.

Some larger mining companies are taking note.

South American mining titan Companhia Vale do Rio Doce (RIO-N) recently signed a 5-year contract with Quadrem to buy all of its equipment through the e-marketplace by the end of 2006.

Another major, Rio Tinto (RTP-N), spends well over US$1 billion annually through Quadrem.

“Rio Tinto is focused on increasing the amount of spending we support with Quadrem’s electronic procurement solutions,” says John McGagh, head of procurement with Rio Tinto. “We have removed waste and inefficiency from our global supply chain while yielding value for our suppliers.”

In 2004, Quadrem more than doubled its member companies, whereas revenue leapt 70%.

Established in 2000, Quadrem has locations in Australia, Brazil, Canada, Chile, France, Mexico, The Netherlands, Peru, Singapore, South Africa, the United Arab Emirates and the U.S.

Met-Chem to build concentrator for CVG

Met-Chem Canada has been awarded a contract by engineering firm Duro Felguera Plantas Industriales of Spain to design and build an iron concentrator in Venezuela for Ferrominera Orinoco, a subsidiary of government-owned Corporacin Venezolana de Guyana (CVG).

The US$300-million concentrator could produce as much as 8 million tonnes of iron ore concentrate per year. It will be located in Venezuela’s Piar iron ore district.

Montreal-based Met-Chem offers expertise in feasibility studies, engineering, project construction, startup and commissioning. The company was founded in 1969.