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DRA secured new contracts, rebased the business in 2022

The Two Rivers platinum mine

The Two Rivers platinum mine

28th February 2023

By: Donna Slater

Creamer Media Chief Photographer and Senior Contributing Editor


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Deals worth A$638-million were awarded to multidisciplinary engineering, project management and operations management group DRA Global in 2022, as the group sought to strengthen its relationships with longstanding clients and broadened its geographic footprint.

"Financial year 2022 saw the continuation of almost four decades of DRA’s engineering and project delivery excellence, where we delivered more than with 470 projects, studies and consulting assignments, and operated 14 processing facilities and two underground mining sites," the group highlighted on February 28.

CEO James Smith said the group entered 2023 with committed orders of A$858-million and about 60% of forecast 2023 financial year revenue.

The company attributed its success in 2022 to the expansion of its services and capabilities in hydrometallurgy, underground mining, advisory and sustainability solutions.

In its Europe, Middle East and Africa (EMEA) jurisdiction – which DRA says provided the foundation for the group’s performance – DRA deepened its relationship with the joint venture-operated Kamoa-Kakula copper project, with the award of new scope of works including the Phase 3 concentrator and debottlenecking of the Phase 1 and 2 concentrators.

DRA also continued the long-standing relationship with African Rainbow Minerals’ Two Rivers platinum mine with the award of an engineering, procurement and construction management (EPCM) services contract for the Merensky concentrator.

The company was also awarded an EPCM contract for Al Masane Al Kobra’s Moyeath copper/zinc project in Saudi Arabia, and significantly progressed the bankable feasibility study for European Lithium’s Wolfsberg lithium project in Austria, with the scope including the design of processing facilities and integrated financial assessment.

In EMEA, DRA said it was responding to increasing demand for studies in battery minerals, and strong project delivery in a challenging environment.

For its operations business in EMEA, DRA secured the extension of an operations and maintenance contract for Ma’aden’s Ad Duwayhi gold carbon-in-leach processing plant, as well as secured an operations and maintenance contract for the same company’s hybrid photovoltaic-low fuel oil power plant.

DRA also contracted to undertake underground development, construction and long-hole mining at Phalaborwa Mining Company’s copper mine and was awarded a second renewal for operation of the Phola facility – a joint venture between Thungela and Seriti Resources, which was completed by DRA Projects in 2010.

In 2022, the group provided advisory services to a number of projects and operational sites involving operational readiness, digital enhancement, advanced asset care and sustainability solutions.

The EMEA operations business of DRA experienced growth in the platinum sector, underground mechanised mining and the laboratory services business.

In this regard, it also continued to grow the capacity and expertise of its Minopex Technical Advisory practice, including refining and developing the digital MinoCore platform.

In 2022, DRA restructured its Asia and Pacific (APAC) business to focus on core strengths of engineering, project delivery and operations management following the resolution of legacy fixed-price construction contracts and the sale of the G&S Engineering business.

For the jurisdiction including APAC and the Americas, DRA continued to provide exploration and production services for the El Domo Curipamba copper/gold project, in Ecuador, and was engaged by Foran Mining Corporation to execute engineering and procurement services for the McIlvenna Bay project – Canada’s first carbon neutral copper development project.

In the APAC and Americas region, the group conducted a feasibility study for the development of Albemarle Corporation’s Kings Mountain strategic critical minerals project, delivered a full suite of engineering services to Pilbara Minerals’ Pilgangoora lithium/tantalum concentrator project, and started EPCM services for Hastings Technology Metals’ Yangibana rare earths project.

DRA says its APAC and Americas business demonstrated its expertise in battery element and critical metals projects, delivered advisory services to provide innovative solutions to reduce carbon footprint and water consumption, and continued to enhance relationships and secure work with key clients including Barrick Gold, Anglo American, Compañía Minera Antamina SA, Hastings Technology Metals and Nemsaka Lithium.

Specifically in South America, DRA experienced solid growth with a portfolio of well-known clients.

For the 2022 financial year, DRA experienced a reduction in revenue with a 24.6% decline year-on-year to A$894.7-million.

However, the group pointed out that its 2021 financial year operational revenue included a number of large fixed-price construction contracts in APAC, through the G&S Engineering business.

During the first half of the 2022 financial year, the group also incurred significant losses associated with fixed-price contracts as it progressed completing works and commercial resolutions.

As a result, DRA decided to no longer pursue fixed-price construction contracts, with the combined result being a year-on-year reduction in operations revenue to A$412-million in 2022.

Projects revenue of A$483-million was also lower partly owing to certain large-scale engineering, procurement and construction contracts being completed in 2022 as opposed to a full year of revenue in 2021.

“Despite a challenging first half, DRA performed solidly in the second half of the financial year to deliver a modest full-year underlying earnings before interest and tax profit of A$7-million – a A$23.4-million turnaround in the second half,” Smith said.

Having reshaped DRA’s operating model and corporate structure, commercially resolved legacy fixed-price construction contracts and divested the G&S Engineering business in APAC, he said 2022 was a year in which DRA rebased its business.

“Our performance throughout the second half of the year demonstrates the positive trajectory expected as we move forward,” he added.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online




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