Rich with nickel and lithium resources, the Goldfields region of Western Australia is becoming increasingly important in the green energy transition. And Duratec Australia is supporting the region every step of the way.
The Australian resources sector has been an integral part of Duratec’s success since its inception in 2010, and the ASX-listed company has established a particularly strong presence in the Goldfields region of Western Australia.
The often-harsh environments of the mining industry mean infrastructure is subject to corrosion, and Duratec’s team of engineers specialises in the protection and remediation of steel and concrete.
Duratec supports a range of commodities in the Goldfields, including gold, nickel and lithium, with much of its remediation work stemming from existing mines rather than capital expenditure (capex) projects.
“More than 95 per cent of what we do is maintenance, where the operation takes things offline or there is a shutdown, and there is time pressure,” Duratec general manager Chris Oates told Australian Resources & Investment.
Duratec project manager Carl Klem said its mining clients were often reactive to infrastructure concerns and, given miners have strict KPIs, downtime needs to be limited.
This means Duratec must respond quickly and efficiently.
“When a plant is offline, mining companies or contractors can lose significant money,” Klem said. “They don’t have redundancies to take tanks out of a circuit and still operate at an optimal rate.
“So our work is time-critical and often involves a lot of on-the-spot problem solving. Half the time we walk into situations where we’re not aware of the full scope of work.”
Klem said Duratec may be engaged to fix one issue, but there will often be other concerns that must be rectified as well.
“We might have been tasked to paint inside a tank, but once we arrive we find that the floor needs to be cut out and repaired, and other issues could be present. And we have to do this quickly so the client can get the tank back online.
“There’s a regular set of challenges for us in the Goldfields. We go into these jobs prepared to see the worst, and most of the time we’ll see what we expect to see.”
Duratec was engaged by a third party to complete internal and external coating works on a tank at St Barbara’s Leonora gold operations in the Goldfields.
Having successfully restored the tank through blasting and painting its internal walls, Duratec was awarded a truck stop remediation project and various structural blast and paint works around site.
Duratec has also worked with BHP at its Nickel West operations in the Goldfields, where the contractor was tasked with restoring a deteriorated acid bund.
The company installed 1200 square metres of acid-proof coatings and 400 square metres of acid bricks, equating to 17,000 acid bricks and 30,000kg of products installed.
Duratec received positive feedback from BHP, along with high safety achievement recognition.
Oates sees a bright future for the Goldfields and for Duratec’s work in the region, with the demand for battery metals, such as nickel, set to exponentially grow.
This will result in more battery metals projects and a greater need for remediation works.
Oates said Duratec grew 30–40 per cent more in the 2021–22 financial year (FY22) compared to FY21 and expects the company to be active in the Goldfields “as long as gold’s being made and nickel’s being made”.
“The future for Kalgoorlie and all mining is pretty strong,” he said. “If you look at it from a macro level, where’s the world heading?
“We know EVs (electric vehicles), battery and energy storage are going to become more and more prominent, and if you look at that more closely, commodities such as cobalt, nickel and lithium are going to become more important – these are abundant in WA.
“Considering the Russia–Ukraine conflict, manufacturers are realising we need more homegrown materials. That plays right into the favour of Kalgoorlie and Duratec.”
Duratec generated $310 million of revenue in FY22 – a sizeable jump from the $235.7 million earned in FY21.
The company also enjoyed increases in its EBITDA (earnings before interest, taxes, depreciation, and amortisation) and NPAT (net profit after tax) year-on-year and expects its revenue and NPAT to increase again in FY23 with more than $700 million worth of active tenders.
While Duratec’s investors are in favour of mining, they are also cautious of the sector given commodity prices can experience volatile highs and lows.
Oates said that as the company further bolsters its investor base, accurate messaging is more important than ever.
“Mining is generally a capex environment,” Oates said.
“But we’re not linked to capex, we’re linked to maintenance. And this is what we tell our investors.
“As Duratec consistently grows its presence in the mining industry, we’re not suffering the highs and lows associated with capex.”
Oates said even if a commodity increases or decreases in price, a mining company must always maintain its assets.
“When that tank drops, you’re going to give us a call and we’re going to fix it no matter what the price of gold is,” he said.
“So what do our investors look for? We’ve got exposure to mining and we’ve got exposure to defence, which has been consistent over 10 years and has a massive pipeline.
“We’ve also got exposure to building and facades, as well as all other existing infrastructure such as wharfs, ports and holding tanks, etcetera.”
Duratec also supports other industries such as oil and gas, transport, marine, industrial and property services, meaning the company can draw on many different economic avenues.
And given the Goldfields will become increasingly important in the green energy transition, Duratec has a bright future in the region and the broader Australian mining industry.
This feature appeared in the October issue of Australian Resources & Investment.