Contract documentation for Mareesburg platinum project completed

27th April 2012 By: Leandi Kolver - Creamer Media Deputy Editor

Contract documentation for platinum miner Eastern Platinum’s Mareesburg platinum-group metals project, in Limpopo, has been completed and tenders have closed, reports consulting engineering firm UWP Consulting.

The contract was put out to tender, using both traditional and UWP’s Integrated Construction Unit (ICU) methodology, and the adjudication process is well advanced. The contract should be awarded by the end of April, says international business development director Rod Stewart.
“A benefit of the ICU method is that it is structured to create a happy medium between owner mining and contract mining, as the owner can be involved in the planning and execution of the mining contract with- out having to own the equipment,” says Stewart.

The ICU approach is a risk management system for dynamic project environments where the sequence and tempo of the work are unknown. “Therefore, this versatile system is specifically suited to projects in Africa, where there is often limited information available at the time of tender, and where circumstances tend to change rapidly during implementation,” he adds.

When the ICU approach is used, con-struction resources, comprising personnel, plant and materials, are provided by the contractor but are collaboratively man- aged by the UWP construction management team and the contractor.

Therefore, the contractor’s contractual risk is limited to the provision of resources, which comply with performance and availability stipulations, as set out in the ICU contract. This is useful in Africa, where the impact of factors like weather and political instability are difficult to predict. This also makes this system more afford-able than traditional systems as the risk pre- mium implicit in tendered rates is signifi-cantly reduced, relative to conventional con-tracting models.

“The end product remains unchanged and the same work can be performed with the ICU methodology as with conventional methodology,” he says.

The ICU system also allows the client to alter plans and designs to deal with difficulties as they appear, as well as amend the scope of the project without the risk of contractual claims.

The ICU system is being used on numerous mining projects, such as Zimplats’ (the Zimbabwe unit of platinum miner Impala Platinum) Ngezi mine, as well as a concen- trator project for divesrsified natural resources group ENRC in the Democratic Republic of Congo.

“The projects involve civil and mining infrastructure,” says Stewart.

For Ngezi, UWP has been responsible for a range of developments, including residential services, mining infrastructure and the earthworks and stormwater management within the process plants, with the broad scope being typical of an ICU project, he explains.

Development and Planning Division
Development and planning are proving useful on prefeasibility and feasibility studies, particularly in the African mining sector, for which UWP is performing two prefeasibility studies, one being for a coal mine in Botswana and the other a gold project in Tanzania, says Stewart.

“In South Africa, projects are reasonably close to the road network as well as energy and water sources, while, in the rest of Africa, this is not the case, making the infrastructure spend in proportion to the total cost of mining projects much higher,” he explains.

As a result, UWP is mainly focused on African projects and, when conducting studies, its engineering and planning and mining divisions work closely to ensure projects are implemented effectively, explains Stewart.

“Botswana has made significant infra-structure progress in recent years, spanning the transport, water and sanitation, power, and mobile-telephone sectors. However, the country still faces a number of important infrastructure challenges. The most pressing is in the power sector, as the country is economically and financially exposed to a lack of generation capacity and insufficient power supply, leaving the economy vulnerable to power-price shocks and load-shedding,” says a World Bank report called ‘Botswana’s Infrastructure: A Continental Perspective’.

In his 2012 Budget speech, Botswana’s Fin- ance and Development Minister, OK Matambo, stated that the government’s priorities for the 2012/13 Budget continue to focus on service delivery and the maintenance of existing infrastructure, while completing ongoing projects such as energy generation, dams, roads and self-liquidating projects with high rates of return.

Meanwhile, Tanzania has made great progress in reforming its trunk roads, improv-ing the quality of the road network. The country has also seen significant gains in information and communication technology networks, and has one of the most competitive domestic air transport sectors in Africa, says a World Bank report on Tanzania’s infrastructure.

“The power sector poses Tanzania’s most serious infrastructure challenge. Despite significant improvements in pricing and oper- ational performance in recent years, ineffi-ciency still absorbs about 1.4% of the country’s gross domestic product,” says the report.

An infrastructure development programme is under way in Tanzania and involves the construction of new ports, railway lines and power infrastructure, says market research company Research & Markets. “The Tanzanian government’s Budget for 2011/12 places strong emphasis on devel- opment expenditure, with part of the $8.6-bil-lion Budget earmarked for infrastructure investment.”