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ODG Rail adds $96.5m to mine-to-market business

05/10/2009

The ongoing delivery record of electrical engineering group O’Donnell Griffin (ODG), part of Norfolk Group Ltd (ASX: NFK), has seen it consolidate its presence nationally as a strong mine-to-market player, according to ODG WA State Manager, Blair Smith.

Its most recent contract win, the just awarded $96.5 million for BHP Billiton’s RGP5 works in the Pilbara, brings ODG’s total contracts for electrical and rail-related works on this development to more than $149 million since November 2002.

“This demonstrates our long-term continuous relationship with BHP Billiton and underlines the robust operational strength and growth of our Rail division,” said Mr Smith.

Mr Smith said the combination of reliable award-winning skills across different sectors in the mine-to-market sphere and the recruitment of expert managers had seen ODG continue to deliver its contractual promises.

The RGP5 works will increase heavy haul railroad loads on the Port Hedland to Newman line, which increases demand on the capacity and capability of the existing rail network. To cope with this expansion, a second track is being laid and ODG will design, install, test and commission the new signalling. The work is located along BHP Billiton Iron Ore’s main railroad which runs south for 426 kilometres.

ODG’s capabilities in design and planning, construction, signaling and electrical sectors are also reflected in its long-term contract at the $1.2 billion Dalrymple Bay Coal Terminal Redevelopment near Mackay in Queensland. The company has carried out more than $36 million of works here, involving the development’s major electrical upgrade and onshore and offshore conveyor systems related to its new 3.8 kilometre jetty, undertaken to address ongoing backlogs in the outloading of the region’s coal production.

Due to this, the ODG contracts demanded that stringent time and budget targets be met, while keeping the coal terminal running at near-full capacity, with careful planning for shutdowns and changeovers.

Other related mine-to-market works for O’Donnell Griffin nationally include:

The successfully completed OzMin Prominent Hill mine project in South Australia, delivering some $10 million in revenue at a gross margin of over 18per cent (originally contracted to Oxiana, now merged with Zinifex). ODG SA has recently won this year’s NECA SA Industrial Award for its part in this project.

This came on the back of another NECA SA Industrial Award winning project last year for ODG SA’s part in the electrical services requirement for the Mindarie Mineral Sands Mine project. ODG ‘s $2.3 million works here involved the entire electrical installation work for the mining process plant. (The Mindarie Mineral Sands project utilises a mining method that is the first of its kind in the State and a number of separate sections have been designed to move along the ore body as the mine advances.)

The securing of the $4.1 million rail signaling and communications services contract for the rail extension required to take coal from the main line to a new 30 Mtpa coal ship-loader facility on Kooragang Island in Newcastle’s Port Waratah on a location to the west of the existing 95Mtpa facility.

Miscellaneous works contract at the Bowen Basin in central Queensland for BHP Billiton Mitsubishi Alliance (BMA), Australia’s largest coal miner and exporter, and according to its website, the largest supplier to the seaborne coking coal market. This recurring revenue contract is worth $5-6 million per annum and comes on top of contracts for the Lead Zinc upgrade and MIT Switchyard.

Mr Smith said that O’Donnell Griffin was also highly respected in the mine-to-market sector for its focus on the critical issue and record of worker safety. So much so that the ODG RGP4 project team recently received a letter of commendation from John Eddy, H&S Superintendent RGP4 Newman Hub Project, singling out ODG’s safety performance on the project as ‘one of the outstanding achievements for this site’ and going on to acknowledge that ‘ODG achieved the highest quarterly safety audit score and consistently met targets for inspections, behaviour-based observations and hazard reporting’.

ODG Project Manager for RGP4, David Hargreaves said: “The nature of a Rail Signalling Infrastructure installation demands a zero harm culture with regards to Safety and the Environment. It is a process that has been fostered in our Rail business for the past 5 years and which is regularly audited by our clients - in particular BHP Billiton Iron Ore during the RGP projects.”

ODG has also been very proactive in addressing the significant skills shortage, especially in graduate engineering roles, that has been facing the industry with its own Rail Engineering Graduate university program and an offshore recruitment drive.

O’Donnell Griffin is part of the Electrical & Communications division of Norfolk, an ASX listed company.

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