Magnesium International Limited (MIL) and its Egyptian partner Amiral Investments (Amiral) announced today that German contractor MAN Ferrostaal has been selected as the lead contractor for the engineering, procurement and construction (EPC) of the magnesium smelter project in Egypt. The smelter will be owned and operated by a special purpose company called Egyptian Magnesium Company (EMAG) which is currently being established under Egyptian Investment Laws.
MIL’s Managing Director, Gordon Galt, said “MAN Ferrostaal already has a significant presence in Egypt and knows the local conditions very well. The company has an excellent track record completing major industrial projects in the region. The engineer, K. Home International, has an impressive track record in the light metals industry with extensive experience in the aluminium industry in Bahrain and Dubai. The two groups have worked successfully with each other on previous jobs. We are very confident that MAN Ferrostaal will deliver the smelter on time and on budget when we give the go-ahead for construction towards the end of this year.”
The MAN Ferrostaal/K. Home combination was chosen following a comprehensive process which involved an initial pre-qualification stage. The main features looked for were knowledge and experience in Egypt, expertise in large industrial plants and the ability to deliver the project for a fixed price. This stage was followed by submission and evaluation of bids from the pre-qualified contractors.
In taking on the job of lead EPC contractor, MAN Ferrostaal has contracted with MIL and Amiral to deliver the operating smelter project for a fixed lump sum price on a turn-key basis. Their first task will be to finalise the fixed lump sum price. This will be done by evaluating bids for various project packages and aggregating them according to a formula which has already been agreed between the parties. Mr Galt said today “Obtaining a fixed price is an essential step in the project financing of the smelter.
One of the main reasons behind our being able to obtain this fixed price is that the Dow technology we will use in the smelter is proven.” The EPC pricing work will take approximately eight months and financing for the smelter will be completed in parallel with the EPC work. Construction is scheduled to commence in early 2006 and will take two years before commissioning commences. Mr Galt added that ”The appointment of MAN Ferrostaal further strengthens the already significant German involvement with the smelter project.
ThyssenKrupp Metallurgie is contracted as the 100% buyer of smelter production and we expect that German banks will be involved in the financing and that German companies will supply smelter equipment.”