Sydney, Jan 30, 2006 AEST (ABN Newswire) - Iluka Resources Limited (ASX: ILU) advises that it has received notices of dispute issued by Roche Mining Pty Ltd ("Roche"), a subsidiary of Downer EDI Limited, under the contract for the design and construction of the Iluka Douglas Mineral Sands Project in Victoria.
The notices of dispute follow rejection of Roche's claims by Iluka's Company Representative for extensions of time and additional payments under the contract. The total amount of the claims is $105.3 million with $39.4 million being claimed in respect of the wet concentrator plant and $65.9 million being claimed in respect of the mineral separation plant. These claims were submitted by Roche to Iluka Resources in December 2005.
The claims were duly assessed in detail and rejected as being:
- without factual or contractual basis or merit,
- time barred (that is, significantly outside the contractually stipulated period for such claims to be submitted), and
- not supported by proper quantification or documentation.
The contract is a lump sum engineering, procurement and construction (EPC) contract. The detailed feasibility study upon which the EPC contract was based, in particular the construction schedule and the contract sum, was undertaken by Roche under a separate contract entered into in August 2003. Following completion of the detailed feasibility study by Roche, the EPC contract for a lump sum of $197.8 million was awarded to Roche in July 2004. The EPC contract provided for completion of the wet concentrator plant on 14 April 2005 and the mineral separation plant on 15 October 2005.
As Iluka has previously advised, the Douglas Project is significantly behind the original EPC contract schedule. The wet concentrator plant is currently in the commissioning phase and the mineral separation plant remains under construction. Roche is obliged to complete the project, notwithstanding the current dispute. Roche's most recent advice, given in December 2005, is that the project will be completed by the end of June 2006.
In accordance with the EPC contract the parties will now undertake the prescribed dispute resolution process. Iluka will keep the market advised of further developments.
About Iluka Resources Limited
Iluka Resources Limited (ASX:ILU) is a major international mineral sands resource company. It is involved in the exploration, project development, operations and marketing of mineral sands products. The major part of Iluka's production base is in Australia, with mining and processing operations in ?Sierra Leone. The corporate office is located in Perth, Western Australia. Iluka has regional and marketing offices, as well as warehouse distribution points in a range of locations.
![abnnewswire.com]()
Related Companies
Social Media
Share this Article
