Glasgow's Weir Group seals ‘landmark’ £100m Australian order

The group, which unveiled an employee share plan in May, employs some 15,000 people globally. Picture: John Devlin
The group, which unveiled an employee share plan in May, employs some 15,000 people globally. Picture: John Devlin
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Weir Group, the Glasgow-headquartered global engineer, has secured a record £100 million contract for an Australian iron ore project.

The firm will provide a range of crushing and pump equipment for the Iron Bridge Magnetite Project, a joint venture between Fortescue Metals Group subsidiary FMG Magnetite and Formosa Steel.

The multi-billion-pound project is located some 145 kilometres south of Port Hedland in the Pilbara region of Western Australia. When the mine is fully operational, it will produce some 22 million tonnes of magnetite iron ore per annum. Delivery of the first ore is expected in 2022.

Weir said that its equipment would help reduce energy consumption and waste by more than 30 per cent compared to traditional mining technologies.

Chief executive Jon Stanton said: “We are delighted to have secured this landmark contract, which is Weir’s largest-ever individual mining order.

“Fortescue challenged us to help create one of the most energy and cost-efficient magnetite ore processing facilities in the world.

“Our engineers have worked relentlessly to design a solution that is truly innovative – delivering significant energy, water and cost savings.

“This is a great example of working in close partnership with an ambitious customer who shares our passion for using innovative engineering to make mining more productive and sustainable.”

At the end of July, Weir cautioned that oil and gas earnings for 2019 would be affected by tough conditions in the US market as it unveiled its first-half results.

The group said that its full-year oil and gas operating profit was now expected to be toward the lower end of its previous £55m to £95m range, with “challenging” markets and slowing orders in North America set to continue.

Weir reported a 7 per cent drop in like-for-like total orders to £1.4 billion in the six months to June, with oil and gas orders falling by 27 per cent.

The FTSE 250-listed company attributed this to tough comparables, with an oversupply in pressure pumping ­markets on the back of an activity surge in 2018.

It unveiled a 22 per cent fall in like-for-like operating profits, at £172m, although this represented a 2 per cent increase on a constant currency basis.

Like-for-like revenues stood at £1.3bn for the half-year, marking a 4 per cent like-for-like drop.

The group said its two mining-focused divisions, Minerals and Esco, now represented around 75 per cent of overall revenues. It also pointed to a “successful execution” of its portfolio transformation, completing the sale of its Flow Control division for an enterprise value of £275m.

The group, which unveiled an employee share plan in May, employs some 15,000 people ­globally, including about 750 in the UK.