Global and multidisciplinary EPC company Forge Group believes the lumpsum turnkey approach to mining projects is regaining popularity – on a larger scale as well, COO Brett Smith tells Laura Cornish.Typical to the cyclical nature and evolution of the mining industry, its approach to the design and development of new projects, is the same. “While most mining companies have shown a preference for the EPCM model over recent years, the level of interest in the EPC turnkey model is growing rapidly,” Smith point outs. And despite its reputation for being successful for ensuring bankability on small- and medium-sized projects, Smith says large-scale projects being developed by mid-tier and majors are also being delivered as EPC contracts. Forge Group is already seeing evidence of this in its work in the power and infrastructure, mineral and resources and oil and gas sectors in geographies where it operates. Majors such as BHP Billiton, Rio Tinto and Xstrata are all revaluating the benefits of EPC contracts. “The EPC model mitigates client risk, and requires the contractor to deliver according to an agreed timeframe, budget and operational performance requirements.” Primarily situated in Australasia and West Africa, with an office in South Africa, Forge Group is proving that large-scale mining EPC contracts can be an optimal, cost-effective option. “To be successful, certain upfront requirements are essential – including a close client relationship. Our integrated approach with full multidiscipline engineering and construction capability enables us to understand our clients’ needs. Supporting this approach in Africa we back this capability with a team that fully understands the country they are working in and the commodity they are working with.” Considering these elements are Forge Group’s primary focus points and strengths, its success in the mining industry is easy to understand. Its mining portfolio includes major EPC contracts, with values of at least AU$400 million (R3.66 billion). And while the company has an established presence in West Africa, it is focusing on other major African mining territories, in particular Mozambique, the Democratic Republic of the Congo, Mali, Sierra Leone and Ghana.
The company is currently providing the civils, structural, mechanical, piping, electrical and instrumentation works for the upgrade of ore processing facilities for AngloGold Ashanti’s Obuasi mine in Ghana.It is also underway with the project management, supervision, labour and equipment for the structural, mechanical and piping, and electrical and instrumentation works associate with Phase 1 of London Mining’s Marampa iron ore project in Sierra Leone. “Our commodity strengths in general include gold, base metals and iron ore, and also expand beyond minerals processing plants. Forge has developed a strong reputation in the power and construction industries, additional strengths that could prove useful to the mining industry.” The majority of mining projects in Africa are dependent on ancillary infrastructure and power. So much so that they can influence the viability of a project in its entirety.Forge’s expertise in the power sector is substantial, bolstered by the acquisition during 2012 of CTEC, which now operates as Forge Group Power following a restructuring of the Group at the end of last year. “We are currently constructing an independent combined cycle power station for Diamantina power station in Australia. We are also completing EPC contracts for the Cape Lambert and West Angelas power station for Rio Tinto Iron Ore.” Such prestigious clients and projects are sufficient evidence that the company can deliver on the capabilities it promises. “Ultimately, we will remain a global entity with a strong presence in Australia, but we want Africa to constitute between 20% and 30% of the entire Forge Group’s business. Because our strengths are aligned with the industry’s growing needs and requirements, we are confident of achieving this,” Smith concludes.