Fluor Corporation (FLR) has been awarded a contract by Minera Quadra Chile Limitada, a subsidiary of Quadra FNX Mining Ltd., to be a part of Minera’s Sierra Gorda project in Chile. Fluor booked approximately $1 billion for the project in the second quarter of 2011.
The company will be providing engineering, procurement and construction management (EPCM) services for the mine’s processing plant. The open pit, green field conventional copper/molybdenum is located in Chile’s Atacama Desert. Once completed the plant will be processing about 110,000 tons per day of ore and will be expanded to 190,000 tons per day in the fourth year of operation. Production from Sierra Gorda is expected to start in 2014.
The company is witnessing signs of recovery in oil and gas markets and Global Services business. Recently, Fluor received a number of new awards driven by substantial mining, which have a lower margin profile. The company’s Mining business is expected to make continued progress ahead. Fluor has bids outstanding in Government, which could add to their backlog in 2011. Further, Global Services business is seeing signs of recovery and the company is confident of strengthening its market position and growth potential going forward.
Acting through its subsidiaries, Fluor Corporation is one of the largest professional services firms, providing engineering, procurement, construction and maintenance as well as project management services on a global basis.
It serves a diverse set of industries worldwide including oil and gas, chemical and petrochemicals, transportation, mining and metals, power, life sciences and manufacturing. It is also a primary service provider to the U.S. federal government. The company’s prime competitor is Jacob’s Engineering Group (JEC).
We continue to maintain a Neutral rating on Fluor Corporation, with a Zacks #2 Rank (Buy recommendation) over the next one-to-three months.
