Suppliers News (April 24, 2006)

ABB to automate Goro for $21M

Swiss-based firm ABB will carry out electrical and automation work for Goro Nickel, a wholly owned subsidiary of Inco (n-t, n-n) at the company’s nickel operations in New Caledonia. The contract is worth roughly $21 million.

ABB will provide 690V MNS motor control centres, low-voltage variable-speed drives, switch rooms in containers, generator panels and low-voltage distribution boards. ABB says the control system at Goro will be one of the largest in the world.

ABB’s electrical and control equipment will be delivered in stages with most of the work being done in Brisbane, Australia. The first switch room has been delivered, while the initial control system components should arrive later this month.

“We expect that by having one supplier, project integration will be more effective, resulting in significant time savings,” says Ken Cunningham, a project manager with Goro Nickel.

Goro is scheduled to enter production sometime in late 2007 and will be one of the world’s largest nickel mines. With some 57 million tonnes of proven and probable reserves, Goro will help develop the fledgling New Caledonia economy. New Caledonia is host to about 25% of the world’s known nickel-laterite reserves.

The ABB Group of companies operates in around 100 countries and employs about 104,000 people.

Sandvik after driller Down Under

Sandvik is offering about $90 million to buy Australian firm SDS Corp., a designer and manufacturer of drilling equipment for mineral exploration. The deal is subject to regulatory approval.

The offer was made through Sandvik’s Australian subsidiary, Sandvik Mining and Construction Australia, and represents a premium of about 32% per share, compared with the average weighted share price of SDS during the previous three months.

The board of SDS has unanimously recommended that shareholders accept the offer. SDS had sales of roughly $98 million in fiscal 2005 and reports sales of $60 million through the first fiscal half of 2006. SDS has around 500 employees.

“SDS is a stable company with a strong market position and through the acquisition, we intend to continue expansion in Australia,” says Lars Josefsson, president of the Sandvik Mining and Construction business area.

Rocmec secures process patent in Canada

Pointe-Claire, Que.-based Rocmec Mining (rmi-v) has a Canadian patent in hand for its Thermal Rock Fragmentation in Narrow Vein Extraction process.

The patent gives Rocmec the exclusive rights to employ the thermal fragmentation process in narrow vein deposits in Canada. The Canadian patent is in addition to American and Moroccan patents obtained last year.

“Obtaining the patent for Canada is a major milestone in the development of the company,” says Donald Brisebois, Rocmec’s president and CEO.

In others news, Rocmec re- cently issued debentures totalling $850,000. Each debenture carries an annual interest rate of 12%, payable quarterly, and each can be reimbursed at maturity 36 months after being issued.

Semafo goes with Komatsu for Kiniero

Montreal-based Semafo (smf-t, semff-o) has spent $8 million to buy a mining fleet for the Kiniero gold mine in Guinea from a Komatsu dealer there.

Semafo says the equipment will result in greater productivity and reduced operating costs.

By its calculations, Semafo expects a 30% reduction in costs at Kiniero, representing a US$50-per-oz. cut in cash operating costs. Semafo says the equipment will pay for itself in less than three years.

The mine life at Kiniero is estimated at five years, with more than 357,000 oz. gold in reserves.

“The increase in Kiniero’s mine life fully justifies the capital investment for this equipment,” says Semafo president and CEO Benoit La Salle.

The fleet consists of two excavators, 10 haul trucks (HD465-7), three dozers, two wheel-loaders and a grader. The equipment is expected to be delivered and assembled on-site in the coming months. In addition, tires for the fleet were secured, as there is a worldwide shortage of tires for heavy equipment.

The original plan at Kiniero called for contract mining. The changeover from the outside mining contractor, BCM International, to owner mining should be completed by September.

Semafo operates the Kiniero mine in Guinea, the Samira Hill mine in Niger and is developing the Mana project in Burkina Faso.