Fluor Lands $1-Billion Deal to Build Mine

Fluor Corp. landed one of its biggest jobs Tuesday, a contract in excess of $1 billion to handle engineering, construction and overall project management of a major gold and copper mine in Indonesia.

The contract with the Batu Hijau mine’s majority owners, Newmont Gold Co. of Denver and Sumitomo Corp., Tokyo, will be managed by the Fluor Daniel unit from its Denver office.

A Fluor spokeswoman said the company expects to hire about 150 engineers and support personnel in Colorado to work on the project. At its peak, the construction project will employ about 5,000 workers in Indonesia.

Fluor, once heavily involved in energy and power plant development projects, has branched out in recent years and landed several large mine construction jobs in Asia and Latin America. The company also has several design contracts for proposed mines in Eastern Europe.

Earlier this year, Fluor Daniel also won a $4.8-billion contract to manage development of the Florida Overland Express high-speed rail project and the $4.8-billion contract to run the cleanup program at the federal Department of Energy’s Hanford nuclear waste site in Washington.

Total cost of the Indonesia mine project is estimated at $1.6 billion. Fluor Daniel officials, citing competitive reasons, refused to say how much more than $1 billion their company’s contract is worth.

Fluor Daniel has been active in Indonesia for more than 25 years and has completed 40 projects there, mainly design and construction of power plants, oil refineries, mining facilities and industrial sites.

Last year, Fluor won a $2.5-billion contract from Edison Co.’s Mission Energy subsidiary to design and build a major power plant in Indonesia. Fluor Daniel also sold its 10% stake in a $640-million Indonesian copper smelter project last year after the lead partner, Japan’s Mitsubishi Materials Corp., said it wanted to use a Japanese construction management firm for the job.

The Batu Hijau mine, on the island of Sumbawa Batu Hijau, has an estimated 11.2 billion pounds of copper and 14.7 million ounces of gold.

Newmont owns 45% of the mine, Sumitomo owns a 35% interest and an Indonesian company owns the remaining 20% stake. Fluor Daniel has been involved in a variety of projects with both companies over the years.

Newmont and Sumitomo signed a definitive agreement in July to jointly develop and operate the project, which will take about three years to construct.