Almonty news Almonty Industries signs EPC contract for Sangdong
2017-12-28 11:14 ET - News Release
Mr. Lewis Black reports
ALMONTY ANNOUNCES THE SIGNING OF THE EPC CONTRACT FOR THE SANGDONG MINE DEVELOPMENT WITH POSCO E&C; WORK TO COMMENCE EFFECTIVE JANUARY 2ND, 2018
Almonty Industries Inc. has signed an EPC (engineering, procurement and construction) contract with Posco E&C for the development works at the Sangdong tungsten and molybdenum mine located in the Republic of South Korea.
The EPC contract, entered into on Dec. 28, 2017, with Posco E&C, one of top-tier general contractors in South Korea and a subsidiary of the third-largest steel mill in the world, is a turnkey-based contract for the development and construction of primary facilities for processing tungsten ore mined out of the Sangdong mine. Under the EPC contract, Posco E&C is responsible for not only engineering, civil and architectural, machinery, and electrical works of processing plant and auxiliary facilities, but also commissioning of such facilities.
The EPC contract has a net contract price of 40.3 billion Korean won (approximately $37.3-million (U.S.)), and, including the value of primary equipment which will be erected and installed by Posco E&C, the EPC price reaches 54 billion Korean won (approximately $50-million (U.S.)), which accounts for 65 per cent of the total capital expenditure budgeted for the Sangdong project. The remaining 35 per cent will be spent for the development of underground transportation galleries and accesses to tungsten veins, mine infrastructure, backfill plant, owner's cost, and other expenses. The primary facilities of the processing plant will be built for 900,000-tonne-to-1.2-million-tonne-per-year capacity while the initial years of operation targets 640,000 tonnes per year.
The EPC contract stipulates a construction period of 18 months and commissioning period of six months. Following general rules of EPC contracts, cost overrun and project delay will be the responsibility of the EPC contractor.
Almonty's chairman, president and chief executive officer, Lewis Black, said: "The signing of the EPC contract for Sangdong mine redevelopment will be an important and meaningful step to Almonty for bringing what was historically one of the largest and lowest-cost tungsten mines in the world back into production. We are particularly pleased to work with Posco E&C, which is a part of the prestigious Posco Group. Posco has been committed to the Sangdong mine project by offering a competitive contract price as the project carries the historical implication of rebuilding its original mother company. Posco was founded by Korea Tungsten (ex Sangdong mine) in 1968. Based on the current EPC and mine development contracts, we believe that Sangdong will be in commercial production after ramp-up latest Q3 2019. The production at Sangdong mine will undoubtedly contribute to a much enhanced leadership of Almonty in the global tungsten space."
About Almonty Industries Inc.
The principal business of Almonty is the mining, processing and shipping of tungsten concentrate from its Los Santos mine in western Spain, its Wolfram camp mine in North Queensland, Australia, and its Panasqueira mine in Portugal, as well as the development of the Sangdong tungsten mine in Gangwon province, South Korea, and the Valtreixal tin/tungsten project in northwestern Spain.
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