I joined Iluka Resources in December2002 as Executive General Manager, Operations. In that
capacity, I was responsible for the ongoing operations of Iluka (current market Cap A$8b) plus the management and delivery of new projects, typically investing around $400m p.a. Iluka was entering a rebuilding phase at the time with existing mines in WA becoming depleted and an urgent requirement for new resources and associated plant. An exploration company in Western Victoria had just been purchased by Iluka for what was later determined to be an inflated price Circa A$130m. This company held rights over new tenements and claimed to have completed a DFS for their asset.
It was at that time that I met David Bollands, Principle of GRS. David had been providing project management services to Iluka including the writing of a comprehensive Project Management System. David’s reputation within Iluka was very good. GRS was engaged to source a project team to reassess the DFS for what had become the Murray Basin Project for Iluka. There was considerable urgency for the delivery of this project. The DFS was completed in record time, described a very innovative contracting strategy for delivery of the project, and the project was subsequently delivered and performed as described in that DFS.
The Murray Basin Project (MB) was a Greenfield project, mining and processing as yet un-processed resources. Capital Expenditure estimates for the first phase of the project amounted to A$325m (plus A$130 above) with total project costs of around A$700m.
Following completion of the DFS, GRS’s role evolved to sourcing a project team for the execution phase of the contract as well as providing ongoing QA/QC of that team. It was at that time that I utilised David’s experience and judgment in many aspects of the delivery strategy for the project.
Iluka engaged Roche Mining, a subsidiary of Downer EDI, to execute a major phase (A$200m) of the project. This engagement was in the form of an EPC contract. Roche were ideally placed to deliver the project having completed the DFS. Roche had also recently acquired Mineral Technologies (who designed the plant and provided a performance guarantee following encouragement by David to do so) as well as JR Engineering, a WA based engineering and construction entity. A parent company guarantee was secured from Downer EDI.
Much has been written about the project, the quality of the team and procedures implemented by GRS enabled successful delivery of the project and total rejection of the EPC claim against Iluka. David Bollands was instrumental in ensuring that that contracting strategy deployed by Iluka was contractually and legally sound. The team sourced by GRS was led by two senior project managers, Bob Edwards and Terry Stott and subsequently joined by Arun Gunasegaram. Bob, Terry and Arun were highly experienced and had worked with GRS on several projects. It was this experience and attention to detail that enabled Iluka to hold Roche and Downer accountable for delivery of the project and ensured that the contracting practices adopted by Iluka enabled full rejection of Downer’s ambit claim.
Clearly the objective of any project at commencement includes objective selection of contractors who can and will deliver as contracted. This was of course the objective with Downer and the project was set up to succeed. Downer was at the time a preeminent contracting company of some substance and this project represented a major opportunity for them – they were a logical selection. The real value of GRS and particularly of David Bollands to Iluka and myself was David’s, judgment, experience and commitment to us despite very difficult times. David, Bob, Terry and Arun delivered the project at cost and were willing and able to support Iluka well past what would have been expected.
I am very happy to endorse David Bollands and GRS.
If further details of the project are of relevance, please contact the writer.
Bill Bisset
+61 409 455 499
