MCC selected for Clean TeQ Sunrise EPC contract

Clean TeQ Holdings has signed a heads of agreement with Metallurgical Corporation of China (MCC) confirming the selection of MCC as a key project delivery partner for the Clean TeQ Sunrise nickel, cobalt and scandium project in New South Wales, Australia

Staff reporter
Clean TeQ's Sunrise nickel, cobalt and scandium project is in New South Wales, Australia

Clean TeQ's Sunrise nickel, cobalt and scandium project is in New South Wales, Australia

PRESS RELEASE: MCC is headquartered in Beijing, China, and is part of China Minmetals Corp, the largest and most internationally-focused mining company in China.

Clean TeQ stated that the selection of an engineering, procurement and construction (EPC) delivery model and the appointment of MCC as a project delivery partner is an important milestone which is expected to deliver significant benefits, including:

  • Leveraging MCC's strong experience in the design, construction and operation of lateritic nickel/cobalt mining, processing and refining operations;
  • Decreasing the financial and project execution risk to Clean TeQ via the transfer of risk via the EPC contracting arrangements;
  • Providing opportunities for low cost procurement and pre-assembly through MCC's extensive network of suppliers; and
  • Enhancing the debt-carrying capacity of the project and potentially opening up opportunities for Chinese capital support for Clean TeQ Sunrise. 

Having signed a heads of agreement, Clean TeQ and MCC will now move to finalise negotiations on the front-end-engineering and design (FEED) contract, which is expected to be concluded in coming weeks.

Under the FEED contract, MCC and one of its subsidiaries, China ENFI Engineering Corporation (ENFI), will work with Clean TeQ's owners' team to manage project scope, critical design criteria and equipment and materials selection during this phase. This approach is expected to help ensure good alignment between activities in China and Australia and strong collaboration between the parties as the optimal plant design and selection of critical materials and equipment is determined.

Once the FEED contract is agreed, Clean TeQ and MCC will work toward negotiating a detailed fixed-price EPC contract for detailed engineering and construction of the process plant infrastructure, based on the summary terms and conditions contained in the heads of agreement. Several critical commercial aspects of the EPC contract have already been agreed as part of the heads of agreement negotiation, with a final detailed and binding EPC contract containing a lump-sum price expected to be agreed during the first half of 2019.

To support its on-site activities, MCC is planning to engage experienced, tier-one Australian construction contractors during the construction phase.

A majority of the FEED work will be run from Clean TeQ's office in Perth, Australia, resourced with an integrated owner's team of engineers and project managers. As the project progresses to detailed engineering, work will migrate to engineering offices located in China. A handover of engineering activities and mobilisation of the team has commenced. This handover is expected to result in a small delay to the overall project schedule of around three months, with formal construction expected to commence by mid-2019.

In parallel with FEED activities, a China-based Clean TeQ owner's team, focused on engineering oversight, procurement, quality control and assurance and pre-assembly activities will be established in Beijing.

Clean TeQ intends to separately appoint an Australia-based contractor to manage design and construction of the non-process plant infrastructure required for the project. Non-process plant infrastructure will include the accommodation facilities, water pipeline, power line, tailings facility, water storage pond and ancillary support infrastructure. A number of parties are being assessed by Clean TeQ for this role, with a formal appointment to be announced in due course.

Robert Friedland, co-chairman at Clean TeQ Holdings, commented: "MCC and ENFI, part of China Minmetals Corp, are considered to be some of the world's leading mining and metallurgical construction and engineering groups, and I am delighted that they have been selected as project partners for our Clean TeQ Sunrise project. There is very strong alignment between MCC/ENFI and Clean TeQ which will ensure we can, together, build and deliver a truly world-class project."

Sam Riggall, CEO of Clean TeQ Holdings, added: "The appointment of MCC/ENFI is another key milestone for the development of Clean TeQ Sunrise. Throughout our discussions, we have been impressed with MCC's and ENFI's level of experience and knowledge in the design and construction of hydrometallurgical projects and their strong interest in the development of the Clean TeQ Sunrise project.

"Negotiation of a fixed-price EPC contract, which we will be working on over coming months, will deliver significantly lower financial and project execution risk, and places Clean TeQ in the best position to deliver the project successfully. With MCC now engaged, Clean TeQ can continue to progress the build-up of our delivery team in preparation for the construction expected to commence in mid-2019."

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