Resource-sector services company Sedgman has secured a $48-million construction contract for the upgrade of Xstrata Coal's Atcom coal handling and preparation plant (CHPP) in South Africa's Mpumalanga province.

The Atcom upgrade would increase the CHPP's capacity from 1 000 t/h to 1 700 t/h, lifting total yearly production capacity of saleable thermal coal production to over five-million tons, Sedgman said on Tuesday.

The upgrade forms part of Xstrata Coal's $407-million Atcom east project that the company plans to integrate into the existing Xstrata Coal South Africa operations.

Sedgman MD Mark Read said last week that Xstrata Coal was targeting project completion by the end of the 2010 calendar year, after Xstrata announced in October 2009 that it had received approval from its board for the full implementation of the Atcom east project.

The CCHP contract followed on from the $75-million design and supply contract announced by Sedgman in November, taking the total value of work awarded to the company on the Atcom upgrade project to $123-million.

"Securing this construction contract on top of the engineering and procurement contract has really cemented the opportunity for Sedgman to showcase its capabilities in this new market and to drive the future growth of our business there," said Read.

Read said Sedgman had also been engaged to undertake a feasibility study for a new coal mine project in Mozambique's emerging, Moatize basin, which had attracted the attention of the world's largest resource companies.

"Sedgman has already been working with Brazilian mining house Vale on its multibillion dollar Moatize coal project in Mozambique and Riversdale Mining's nearby Benga coal project.

"This new study is for one of several regional projects in the company's project pipeline, which would largely be delivered through Sedgman South Africa's expanding operations in Johannesburg," said Read.

Meanwhile, Read said that winning the new Atcom construction contract supported Sedgman's positive outlook, particularly for 2011 financial year and beyond as global business conditions improved.

"We expect to continue to grow our order book and capitalise on the increasing number of project opportunities both in Australia and abroad," he said.

The company is currently focused on a $5,5- billion global pipeline of targeted project opportunities in coal and metals.

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