SNC-Lavalin wins Panama copper project

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SNC-Lavalin and its partners have clinched a major copper mine project in Panama that boosts the engineering firm's business in the mining sector.

Montreal-based SNC said late Monday that a joint venture it heads up has been awarded a contract by Minera Panama SA, a fully owned subsidiary of Inmet Mining Corp. of Canada.

The company did not provide details of how much its share of the contract will be worth. Canaccord Genuity analyst Yuri Lynk said his initial rough estimate is in the $300-million (U.S.) range.

Joint Venture Panama - of which SNC owns 70 per cent - will provide the basic engineering services for the Cobre Panama copper mine project in Panama. That will then be followed by engineering, procurement and construction management services for development of the open pit mine.

"This is a very big award. It doubles [SNC's]mining backlog," Mr. Lynk said.

"It's a return to mining for them. They had not really won anything in that sector in the recent past."

The Cobre Panama project includes such elements as ore crushing and conveying and stockpiling facilities, concentrator and processing units and ancillary systems and equipment like tailings management operations and access roads.

The other members of the partnership are GyM S.A., with 15 per cent, and Techint International Construction Corp., also with 15 per cent.

SNC-Lavalin said in a news release that preliminary engineering studies indicate the total capital cost of the project at more than $4-billion.

"This is a tremendous opportunity for SNC-Lavalin to work with its [Joint Venture Panama]partner, and with Inmet, [Minera Panama SA]and local stakeholders to build a world-class copper mine and all its infrastructure in Panama," SNC executive vice-president Feroz Ashraf said in a statement.

"This award builds on our 20-year relationship with Inmet and reflects their confidence in our ability to design and build another challenging and prestigious project for them."