Engineering, construction and services company KBR Inc. (KBR) said late Tuesday that it has received a contract to upgrade Rio Tinto's (RIO, RIO.AX, RIO.L) fuel assets in the Pilbara region of Western Australia.
This is part of the Anglo-Australian mining giant's investment in power and fuel supply projects to underpin existing and future expansion of iron ore production capacity in the region. The project will begin immediately and is due to be completed in July 2013.
Under the contract, KBR's minerals division will provide engineering, procurement and construction management or EPCM services to install fuel assets and storage in five locations. These include port facilities at Cape Lambert and Dampier, mines at Brockman and West Angelas and a maintenance yard located near Dampier.
The company noted that the infrastructure will help provide certainty in meeting Rio Tinto's fuel requirements.
KBR added that it will use national network of resources to deliver the project, with project management services supplied from Western Australia and engineering services from the Adelaide engineering operations center.
Following the completion of the project, Rio Tinto's fuel network in the Pilbara region will use the company's rail network to transport diesel to hubs for storage and further distribution to mines and power generation facilities.
KBR noted that the rail network will reduce the requirement for road trains to transport fuel on public roads from Port Hedland.
Mark Read, President, KBR Minerals, said, "We will draw on our global network of people to provide the resources to complete this project, which will be an integral part of Rio Tinto's 333 expansion program."
KBR said the fuel infrastructure project follows its completion of a definitive engineering study for Rio Tinto. Such study defined the diesel storage and transfer facilities required to support the company's expansion in the Pilbara.
KBR shares closed Tuesday's trading at $31.56, down $0.11 or 0.35 percent, and RIO shares settled at $56.05, up $1.75 or 3.22 percent.
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