[miningmx.com] — AIM-listed MDM Engineering had so far seen no sign of any slowdown on mining projects planned for Africa because of global economic worries.
That’s according to executive director George Bennett who told Miningmx, “conditions now are very different to what happened in 2008 when a number of companies postponed projects and subsequently wished they had not.’
Bennett added that, “another major difference is that currently some 40% of the projects being carried out are being funded by Chinese backers and they take a 30 year investment view, not an 18-month one. In 2008 there was minimal Chinese involvement.
“We are still seeing increasing demand for tenders ranging from feasibility studies to execution projects. We are seeing a lot of activity in the gold, copper and cobalt fields. Uranium has gone quiet but we expect that to pick up.
“I think the guys learnt a few lessons from 2008 and, given the present situation, we are not too worried about Europe having a problem. Having said that, clearly, conditions can still change at very short notice.’
He said MDM currently had a pipeline of “potential upcoming projects’ on its books with project values totalling between $1.5bn and $2bn.
The company had seven execution projects in process worth $580m in total while it was carrying out five bankable feasibility studies (BFS) on projects with a total estimated value of $1.4bn.
The major contracts under execution were the Namoya gold plant for Banro in the Democratic Republic of Congo; the Kalagadi Umtu manganese project in South Africa and the Tharisa chrome/platinum plant also in South Africa.
By far the most important of the BFS being undertaken concerned the Amari Manganese Kongoni project at Hotazel in the Northern Cape followed by the tailings plant being looked at by Global Initiatives to treat surface material at the BCL Selebi Phikwe mine in Botswana.
Bennett said MDM had set a strategic target of having at least 10 projects under execution at any one time and expected to achieve this during calendar 2012.
He said MDM’s strategy was to focus on African projects and the company had formed a strategic partnership with listed Australian engineering and project services company GR Engineering Services (GRES).
Bennett commented, “GRES is a very similar outfit to MDM and our aim is to attract more Australian business given the extent of the Australian involvement in Africa where 180 Aussie companies control some 400 projects.
“Some of our competitors have set up branches in Perth but our experience is that Australians like dealing with Australians so we have gone a different route and set up this JV.’
So far MDM in partnership with GRES had submitted a proposal for the engineering/procurement/construction (EPC) contract for the gold plant Chalice Gold is looking to build in Eritrea.
In South Africa, MDM was pitching for work from unlisted Taung Gold for the Evander 6 shaft project and the Evander first module as well as to Gold One International for the Rand Uranium Tailings project as well as the Randfontein and Cooke dumps consolidation.
“We think there’s a lot of work coming involving treatment of the dumps on the West Rand,’ Bennett commented.
But he pointed out that MDM had been negatively affected previously in this region when Gold Fields had decided at very short notice not to go ahead with its proposed West Wits tailings project to recover gold and uranium.
MDM more than doubled revenues to $19.8m in the six months to end-
September and reported a profit before tax of $3.3m compared with a loss of $2.5m in the previous comparable six months.
