Murray & Roberts’ (M&R’s) mining contracting division, Cementation Americas, has secured a mine-building project for $200m (R3.6bn), surpassing the company’s R1bn market capitalisation on the JSE.
The transaction, which was signed with a prominent mining corporation in Latin America, comes as M&R works towards leveraging the advantages of its present North American operations.
In April, the company signed an engineering, procurement and construction (EPC) contract worth $200m with a major South American copper producer.
M&R has been recovering from the loss of its Australian subsidiaries, MRPL, Clough and RUC Cementation Mining Contractors. After the loss of its subsidiaries, the group became an engineering and contracting services company, focused on the African and Americas underground mining markets, and renewable energy and power infrastructure in Sub-Saharan Africa.
On Monday it said Cementation Americas had provided mine engineering and construction services to the Latin American market since 2003 and had completed multiple large-scale complex mine construction scopes of work in this mining market.
“This significant award reinforces Cementation Americas’ strong capability to deliver on large underground mine construction projects for top-tier clients,” M&R told shareholders.
Growth
M&R has expected the global mining industry to grow over the next five years, notwithstanding depressed commodity prices, with increased investment into minerals and metals required for energy transition.
Subsequently, the group’s strategy has shifted towards its well-known Cementation brand targeting project opportunities in Australia, while leveraging the capabilities of its existing businesses in North America through Cementation Americas and in Sub-Saharan Africa via Murray & Roberts Cementation.
The latest project award is expected to help bolster its reduced earnings base after the Australian loss, shore up its order book, which at R14.7bn was R1.4bn lower than reported in the prior comparative period, and help it shave down its debt further.
The firm reported a significant narrowing of its losses in the six months to end-December, saying its new capital structure and financing arrangements would create a “leaner and more agile group”.
After the recent management shake-ups, Cementation Americas is led by Eric Smith.
The engineering specialist highlighted that implementing the deleveraging plan initiatives had helped it reduce debt by about R1.3bn so far.
M&R, which has reduced overhead costs and made meaningful progress towards implementing a sustainable capital structure, has vowed to continue to focus on operational efficiencies and liquidity management.
The Johannesburg-based group has also expressed its intention to capacitate Cementation APAC to serve the Asia-Pacific mining region, after the refinancing of its debt in SA is complete.
The company’s mining businesses generate most of its revenue and earnings and are diversified across the northern and southern hemispheres.
M&R shares were up 1.73% to R2.35 on Monday, having climbed more than 55% since the beginning of 2024.
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