Page 14 - Sundance Resources 2014 Annual Report

12 SUNDANCE RESOURCES LIMITED ANNUAL REPORT 2014
PORT AND RAIL EPC
In August 2013, Sundance issued tender documents for
the construction of rail and mineral terminal infrastructure
to a number of international Engineering Procurement and
Construction (EPC) contractors, consisting of both Chinese and
non-Chinese groups. The contractors invited to submit tenders
all had a proven track record in building successful projects of
large scope and scale.
Tenders were received in December 2013 and were put
through a vigorous internal review and evaluation process.
Mota-Engil Africa and Sundance signed the EPC contract at
a signing ceremony in Yaoundé, Cameroon, on 5 June 2014.
A second contract for the construction of the spur line portion
of the railway (52km) to be built in the Republic of Congo was
signed on 18 June 2014.
Mota-Engil Africa’s role includes detailed design, construction,
testing and commissioning of:
• The 510km railway from the Mbarga Mine in Cameroon
to the Mineral Terminal Facility at Lolabe on the west
coast of Cameroon;
• The 70km rail spur line from the Nabeba Mine in the
Republic of Congo to the Cameroon railway;
• A 35Mtpa deep water Mineral Terminal Facility, including
stock yards, capable of loading ‘China-max’ vessels; and
• The procurement of all railway rolling stock and operating
equipment and the materials handling equipment at the
Mineral Terminal Facility.
Key terms of the contract for the port and rail EPC contract are:
• Construction period from Financial Close of 3.5 years;
• Contract value of US$3.5B;
• Standard internationally-recognised and accepted
contract terms based on FIDIC Yellow Book;
• The Contractor must meet and comply with the Equator
Principles;
• Performance obligation consists of throughput guarantees
for system to produce, transport and ship 35Mtpa;
• Performance Bond and Performance Damages if the
system does not achieve the required throughput; and
• International standards and specifications and nominated
Australian Standards.
Mota-Engil Africa is a subsidiary of Mota-Engil SGPS, a
multidisciplinary Portuguese construction company with an
international presence that spans across 21 countries. The
Mota-Engil Group established its African operations in Angola in
1946. They have extensive experience in Sub-Saharan Africa,
including currently being involved in the construction of a bulk
commodity railway in Malawi.
Mota-Engil Africa has commenced preliminary works in
preparation for mobilisation of the Project. They are working
closely with Sundance and Standard Bank to ensure that
preparations for mobilisation and ramp up for the construction of
the port and rail infrastructure run in parallel with the process of
raising finance such that there will be no delay in developing the
Project when funding becomes available. To this end Mota-Engil
are establishing legal entities in Cameroon and the Republic
of Congo and have also commenced detailed project planning
including logistical arrangements for mobilisation and preparations
to progress the detailed engineering design.
Pending the securing of project financing this will ensure Mota-
Engil is in the best position possible to commence construction
works immediately following financial close.
In June 2014, Sundance announced that international engineering and construction
company Mota-Engil Africa was appointed as the EPC contractor to build the Port and
Rail infrastructure for the Mbalam-Nabeba Iron Ore Project.
Signing of the Port and Rail EPC contract and the Concession Agreements in Cameroon