Elementos Ltd (ASX:ELT, OTC:ELTLF) has awarded an early contractor involvement (ECI) contract to Spanish engineering, procurement and construction (EPC) contractor Duro Felguera to develop the Oropesa Tin Project’s mineral processing plant.
The ECI follows a global tendering process among suitably qualified process engineering contractors with Spanish delivery capabilities and represents a “significant milestone” in Oropesa’s development.
Experienced local partner
The contract, which Elementos awarded through its Spanish subsidiary Minas de Estaño de España S.L (MESPA), is in keeping with the company’s focus on developing effective delivery models with experienced local partners.
The ECI is designed to deliver key engineering inputs for the definitive feasibility study (DFS), in addition to a lump-sum EPC delivery price and an executable EPC contract for the mineral processing plant.
Key EPC contracting terms and conditions have been negotiated and agreed between the parties.
Duro Felguera will develop the ECI in close consultation with Elementos’ project team and owners under established partnering principals. The work will proceed on an open-book basis, with pre-agreed profit and overhead margins and contingency definitions.
Elementos and Duro Felguera have agreed to progress into the full EPC delivery contract when the project achieves final investment decision (FID).
That said, the contract does allow Elementos to re-test the market and sign a final EPC delivery contract with an alternative third-party contractor if certain conditions fail to be met, or upon the payment of a break fee.
A major step forward
Elementos chairman Andy Greig said: “We are pleased to be able to announce the successful contracting of Duro Felguera to develop the mineral processing plant at our Oropesa Tin Project.
“This is a major step forward in the development of the Oropesa Tin Project and a clear step towards project execution.
“To be able to partner with a long-established Spanish contractor like Duro Felguera, and one which specialises in EPC delivery of large industrial projects, is a clear benefit to our project, which is aiming to establish a new tin supply for both the Spanish and European markets.”
Elementos managing director Joe David added: “The mineral processing plant makes up a large portion of the capital cost of building the Oropesa Tin Project and partnering with Duro Felguera significantly de-risks this package and aligns us with a large and well-regarded Spanish EPC Contractor.
“Duro Felguera has a long history of engineering, construction, commissioning, and maintaining major mining, industrial, energy and infrastructure projects around the world and of course within its home country of Spain.
“Duro Felguera specialises in the delivery of major industrial projects under an EPC turnkey contractual model, which aligns with Elementos’ project delivery strategy.”
Duro Felguera general manager (Industrial Plants) Jose Olaso Ayesta said: “Duro Felguera is excited to execute this mineral processing plant contract with Elementos and its MESPA subsidiary.
"The Oropesa Tin Project, in Andalucia Spain, is an exciting project that we are pleased to be associated with and one that sits well within our capabilities to develop and execute.”