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Rio Awards ABB $27M Power Contract - Analyst Blog

Posted: 6/26/2013 9:30:00 AM
Referenced Stocks: ABB;EME;ORN;RIO

ABB Ltd . ( ABB ) recently received an order from Rio Tinto plc ( RIO ) to upgrade an existing power substation at the Cape Lambert port in Western Australia's Pilbara region. The order, booked in the first quarter, is worth approximately $27 million and is expected to be completed by early 2014. The main objective of the contract is to upgrade and increase port power supply to catch up with the incremental exports from Pilbara mines.

As per the agreement, ABB will be responsible for the design, construction and commissioning of the substation upgrade. Following the upgradation, the existing transmission network will get electricity from a new power generation plant. The upgradation will also increase power supply to enable the expansion of the Cape Lambert port. ABB claimed it will ensure the best quality of electrical supplies, thereby ensuring safety and reliability.

The upgradation and expansion of the Rio Tinto substation is primarily done to have more space for ship loading facilities and boost port capacity. This includes the addition of a second 1,400-metre jetty and related equipments for handling bulk materials. The port is expected to increase iron ore exports by 53 million tons annually.

Rio Tinto is a global leader in the exploration, mining and processing of minerals and metals, including aluminum, copper, diamonds, energy products, gold, industrial minerals and iron ore.

The substation's upgraded automation and communication systems will allow Rio Tinto's Operations Center at Perth, which is about 1,500 kilometers away, to supervise the power assets. The Operations Center is responsible for controlling and managing the mining processes, rail transport, ship loading and related critical infrastructure for Rio Tinto's iron ore mining operations in the Pilbara region.

Based in Zurich, Switzerland, ABB is a power and automation technology company and currently has a Zacks Rank #3 (Hold). Some other players in the same industry worth considering at the moment are Orion Marine Group Inc . ( ORN ) and EMCOR Group Inc . ( EME ), both having a Zacks Rank #2 (Buy).

ABB LTD-ADR (ABB): Free Stock Analysis Report

EMCOR GROUP INC (EME): Free Stock Analysis Report

ORION MARINE GP (ORN): Free Stock Analysis Report

RIO TINTO-ADR (RIO): Free Stock Analysis Report

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