New large-scale mining projects may be few and far between at present, while small and medium sized developments remain on the rise. Global engineering firm Fluor is adapting its local mining and metals business model to cater to this current economic environment, writes Laura Cornish.

Fluor has been active in Africa’s mining sector for the past 50 years, but its project volume could be considered relatively small. This is set to change, following the implementation and commencement of a strategy aimed at growing this specific business unit and its mining work in Africa.

Driving the strategy is the newly appointed Fluor SA Mining & Metals general manager, Russell Ayres, who will oversee the implementation of a greater mining team and a growing mining project portfolio.

Ayres, who has been with Fluor for 12 years, joined the South African company at the beginning of this year and is already putting plans into action. “My primary focus is to build, grow and develop a core set of team members who will facilitate and specialise in the small- to medium-sized project area in the range of US$200 million to US$300 million, which continues to flourish in current economic conditions,” explains Ayres.

“Ultimately, the intention is to take on a multitude of projects of this scope and broaden our overall workload, in addition to tendering on the few big projects advancing to the execution phase. By remaining active and continuously gaining more experience, we will position ourselves to take on more mega projects as they re-emerge.”

Fluor – and Ayres in particular – has already proved this concept successful having spent 10 years in China implementing it. “It took only three years to convert the concept from idea to reality. I believe it is the most successful route to better establishing yourself and gaining greater industry recognition,” he continues.

Ayres’ connection and understanding of China’s industrial sectors has multiple benefits for Fluor’s African business. “There are so many similarities between China and Africa, particularly with regards to major challenges, such as a lack of infrastructure, language barriers and cultural diversity. These are challenges I have learnt to overcome with great success and this understanding and experience that I bring to the South African and African subsidiaries will carry us forward into the most remote African regions with ease.”

Fluor also has a team of 300 based in China that specialises in procurement and services the entire global Fluor entity. This has major benefits for clients, particularly with regards to pricing and lead times, especially where these can not be met locally. “Thanks to our strict pre-qualification process, we are able to source the best equipment, at the best price and best delivery time frames, here and in China.”

High profile projects

Following the successful completion of three major mining projects over the past few years, Fluor is currently tendering on three mining projects and is underway with a pre-feasibility study for a new treatment plant at Debswana’s Letlhakane diamond mine, north of Botswana’s capital, Gaborone.

Its flagship project to date is the work it undertook for the Jwaneng diamond mine Cut 8 expansion project in Botswana as well, which it completed in September 2012. The company’s responsibilities included relocating and rebuilding portions of the mine infrastructure affected by the pit expansion. The scope included earthworks, civil construction, pilings, structural steel erection and electrical installation.

The Jwaneng opencast diamond mine is the largest (by value) in the world. Its expansion facilitates greater access to kimberlite ore. The expansion enables the removal of overburden to allow the mine to access 91 Mt of ore that will yield about 102 million carats and extends the mine’s life to 2028.

Fluor (through its Botswana subsidiary) was also involved in the Phase 1 expansion of the Morupule coal mine, increasing production to 3.2 Mtpa. The coal supplies Botswana Power Corporation’s Morupule power station. Fluor managed the engineering, procurement and construction management for the project, which started in 2010. The main target was to complete the relevant facilities to support meeting the ‘first coal’ milestone by mid-November 2011, which the company achieved two weeks ahead of schedule.

Completion of the infrastructure portion of the project was achieved in mid-July 2012.

ServiTrade acquisition

In November last year, Fluor’s integrated mobile equipment and tool solutions unit, AMECO, acquired ServiTrade, a Mozambique-based construction equipment rental and project services company. ServiTrade provides fully operated and maintained equipment, camp services, transportation and batch plant services to the infrastructure, mining, natural gas and power industries with an execution model aligned with AMECO’s.

“One of our strategic growth initiatives has been to increase our presence in Africa, so AMECO took this approach to expand in the market and position early in this high growth region,” Gary Bernardez, president of AMECO said when the acquisition was announced. “ServiTrade’s long-term presence and high level of activity with AMECO’s global accounts, stable economic factors and the desire to establish a sustainable presence in sub-Saharan and eastern Africa further solidified our decision.”

Founded in 1998, ServiTrade is one of East Africa’s premier project services companies for projects throughout the region. ServiTrade is based in Maputo, Mozambique, with additional locations throughout the country.

 “The acquisition has made us the biggest mining equipment hiring company in Mozambique and is another arm of our strategy to increase, grow and expand our mining presence in Africa,” Ayres adds.

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