WestStar Industrial (ASX:WSI) has shot over 12 per cent higher today on the Australian bourse after its engineering contractor business SIMPEC won a $1.5 million contract extension at the Talison lithium mine – the world’s biggest lithium mine – in Greenbushes, Western Australia.
SIMPEC received a significant contract scope extension from MSP Engineering – the Head Contractor for the design and construction of the Chemical Grade Plant 2 Project.
The news comes after MSP Engineering initially engaged SIMPEC in February to supply high voltage and fibre optic cables to the Chemical Grade Plant 2 Project.
This engagement has now been expanded to include the installation of these cables and construction of concrete pits where the cables will be housed.
According to WestStar, SIMPEC’s demonstrated capabilities in its first works with MSPE was key to the award of this subsequent increase in contract scope.
The Chemical Grade Plant 2 Project will more than double the capacity of the Talison Lithium Mine to 1.34Mtpa lithium concentrate and is due for commissioning in the second quarter of 2019.
“SIMPEC has been working closely with tier 1 companies to develop solid working relationships,” SIMPEC Managing Director Mark Dimasi said.
We are quickly building awareness and traction with SIMPEC’s unique skillset and professional execution. I am very optimistic that these new works will be the beginning of long-term relationships, potentially resulting in the award of future contracts and, ultimately, increasing value for WestStar investors.”
Meanwhile, SIMPEC’s Mechanical, Electrical and Communications contract in the construction of accommodation facilities for use by Iluka Resources and Tronox Limited at the Cataby Project has been increased in scope resulting in ~$300,000 being added to SIMPEC’s contract value.
With the expanded scopes of each of its current projects, SIMPEC has added $1.8 million of work to its order book.
For the past six months, SIMPEC has tendered for more than $150 million of work and will continue to tender for projects throughout Australia.
Shares in WestStar were 0.2c higher at 1.8c in Wednesday morning trade.