“One of the current bottlenecks regarding our capacity to build projects is determined by the capacity of fabricators of structural steel,” Smith says. The availability of steel and project timing impact directly on the output capacity of the workshops. It seems that the fabricator is always in a state of either feast or famine. “Late design changes also cause unnecessary rework, hampering throughput.” These are probably all symptoms of fast track projects.
A further and more concerning restriction on construction capacity is the shortage of human resources in the industry. The construction upswing has stretched resources to the limit. There are only so many teams available. Succession planning is also a problem – it seems that there is a relatively big gap between the older experienced resources and the next level younger entrants. In these market circumstances, it will probably be to the advantage of both the clients and constructors to negotiate upfront participation on new projects and reserve capacity, Smith says. This will ensure that competent teams are allocated to the projects.
The Metals & Minerals division, a relatively new division of Grinaker-LTA M&E, has already secured a substantial order book for 2006/7. Smith says he is being careful not to overextend the business, but would rather establish his division as a sound marker leader through delivering quality performance on all aspects of the projects.
Grinaker-LTA M&E, one of seven business units of Grinaker-LTA Construction, focuses on the structural, mechanical, piping, electrical and instrumentation construction disciplines within the group. It has recently changed its structure to align with industry sectors such as oil and gas, metals and minerals, and power generation, hence the formation of the Metals & Minerals division. Some of the historical entities incorporated into this new division are the construction arm of DSE Structural Engineers and Contractors, Groenewalds E&I, Grünwald Construction in Botswana and Grinaker-LTA Construction Zambia (MEIP).
“Our target market is sub-Saharan Africa”, Smith says. “Currently, the upswing in the commodities market and the economic situation have created many opportunities in South Africa, and although this will remain the core country for our business, we will surely participate in Zambia, Botswana, Namibia and Mozambique. Our philosophy is that we will follow our traditional clients that provide us with our core business into sub-Saharan Africa and we do look to establish and maintain relationships that ensure repeat business and the formation of alliances.”
Grinaker-LTA M&E employs in excess of 5,000 people and has its head office in Johannesburg, which is also the operating office for the Metals & Minerals division. In addition to this office, Metals & Minerals also has offices in Zambia and Botswana, which has given it the opportunity to participate in various projects in those countries over the years.
Since the early 2000s, the company has been active in Zambia, doing work at Nkana Smelter, Luanshya, Mufulira, Chilalabombwe, Nchanga, Chambishi, Bwana Mkubwa and Kansanshi. The scope of work included all the construction disciplines on acid, concentrator and oxygen plants, typically work related to solvent extraction, electro-winning, leaching, thickeners, crushers, tanks, ducting, HDPE piping, etc. “We are currently completing Kansanshi phase 2 at Solwezi for First Quantum Minerals’ copper mine. This has been one of the bigger projects done in Zambia,” Botes says.
Grinaker-LTA M&E has a long history in Botswana having been in that country since the 1970s, trading as Grünwald Construction and LTA Autecon. It mainly supports Debswana and Botswana Power Corporation (BPC) on electrical and instrumentation projects and services. The main office is located in Gaborone with satellite offices in Orapa, Jwaneng and Francistown. Over the years, the company has participated in major projects like the 1992 expansion on Jwaneng, Damtshaa development, Letlekane and Orapa 2000. Botes says they are particularly interested in getting involved with Jwaneng DMS project, Orapa 3 and Tati Nickel in the near future.
The division is structured to undertake three to four major SMEIP projects simultaneously, as well as continue to do multiple single discipline E&I or SMP projects. “We have the experience to do large single discipline packages,” Botes says, referring to some of the labour only projects recently done. “We prefer medium size contracts and split our risk over various projects,” he says.
“Overall we would not like to have more than a third of our resources invested in a single project,” Smith says.
The Metals & Minerals division recently secured the Namakwa Sands North Project 1000 contract. The scope includes all construction disciplines – structural, mechanical, piping, electrical, instrumentation as well as civil-work. DSE Structural Engineers and Fabricators, also part of Grinaker-LTA M&E, will be subcontracted to do the design, detailing, supply and fabrication of the structural steel. The Namakwa Sands Project 1000 will see the primary concentrator east feed rate increase from 580 tonnes an hour to 800 tonnes an hour while the primary concentrator west feed rate will increase from 1,590 tonnes an hour to 1,800 tonnes an hour.
Grinaker-LTA M&E believes in a client based approach, looking at building key relationships with mining groups.
Botes says that he believes that the Metals & Minerals division, via its current management and people, already has long-term relationships with most of the mining groups through previous participation on projects. Some of the mining projects it participated in South Africa the last five years include Anglo Platinum concentrator plants, De Beers mines, Finsch, Venetia, CTP and Kimberly. Anglo Base Metals also has been a key client over the years participating in projects like Namakwa Sands and Skorpion Zinc.
Coal mining has been very much part of the business over the years. Work has been done at Anglo American Landau Colliery, New Vaal Colliery, Ingwe at Middelburg Coal Mines, Bank Colliery and Matimba.
In the metal industry, Mittal/Iscor has been a key client with projects such as Saldanha Steel and various upgrades of furnaces in their other operations. The structural steel and E&I disciplines continues to deliver in this sector. On the ore side, Kumba’s Sishen Expansion Project, Metals & Minerals division recently secured the structural fabrication and construction work on the jig plant and conveyors contract.MRA