MDM Engineering

Source: Energy Digital

Date :08/07/2008 10:03:59

Phoenix from the flames

Written by Ian Armitage and Produced by Alex Smith

Known throughout the world as a treasure trove, South Africa boasts an abundance of mineral resources, producing and owning a significant proportion of the world’s minerals. The country has vast resources - nearly 90 percent of the platinum metals on Earth, 80 percent of the manganese, 73 percent of the chrome, 45 percent of the vanadium and 41 percent of the gold can be found there.

It is hardly surprising there are a number of companies lining up to capitalise on this potential and MDM Engineering, which undertakes mineral resources projects of varying size, is determined to do just that.

However, it would be misleading to suggest South Africa is the firm’s sole focus as there are some major new mines opening all over Africa with Ghana, Tanzania, Zambia, the DRC, Namibia, Botswana, Tanzania, and Gabon all showing promise. MDM Engineering is seeking opportunity in each.

Although it has an 18-year history, the modern incarnation of MDM was established in February 2006 and the company provides a wide range of services, from preliminary and final feasibility studies through to plant design, construction and commissioning.

“We take on projects of varying sizes and concentrate on the gold, base metals, industrial metals and more recently the uranium sectors,” explains George Bennett, who has played a vital role in re-establishing MDM in the sector. “We’ve risen from the ashes of MDM Ferroman and are great at what we do in terms of process and engineering design. We offer a range of services from project evaluation and the design and construction of plants to project management.”

Looking beyond the unexpected, MDM has a proven track record, a team of skilled professionals led by Dave Dodd and Rob Moosmann two of the original founders of MDM Ferroman and the strong financial support of both financiers and shareholders. A BVI registered company, MDM Engineering has an operating subsidiary in South Africa, and is well positioned to undertake small, medium and large scale minerals projects on a global basis.

“We look to offer all clients with a complete package that delivers on both cost efficiency and performance, encompassing preliminary and final feasibility studies, through to plant design, construction and commissioning,” adds Bennett.

The next step

In May 2008, MDM Engineering successfully listed on the London Stock Exchange’s Alternative Investment Market (AIM) - a major step forward in the company’s plan to becoming a significant entity in the global construction and engineering sector. Bennett says this move has seen the company raise “£4.4million of new funds after costs” via a placing of new common shares with a range of institutional investors.

“We raised the money because we wanted to strengthen our balance sheet in order to support the projects we have on the books at the moment,” explains Bennett. “A stronger balance sheet means we will be able to complete those at a lower cost.

“We also wanted to be able to incentivise staff in a very tough environment,” he explains. “As you know, engineering skills are in short supply globally and one of the reasons for the flotation was to be able to retain key staff and to attract further staff into the company.

“When we started this company, we had 20 staff but this has grown to 120. However, we want to recruit another 25 to 35 people in coming months and the listing will play an important part in that,” adds Bennett, who with Mike Nunn founded the company out of the financial ruins of MDM Ferroman at the end February 2006.

A real success

Bennett, who claims to have “little” technical mining experience, has almost 20 years’ experience in the investment banking industry, originally as a partner of Fergusson Bros, then Simpson Mckie before its acquisition by HSBC. Previously the Head of Mining Research Sales and a Director of HSBC (South Africa), Bennett was also a member of the Johannesburg Stock Exchange. He became CEO of Shanta Gold in September 2004, which he successfully listed on the London Stock Exchange (AIM) in July 2005. He resigned from Shanta Gold after forming MDM Engineering with Mike Nunn in February 2006.

Bennett, MDM Engineering’s original CEO, resigned from that position in February, to help the company progress. He played an important role in the appointment of new CEO Grant Lowman, his former deputy, and will remain on board as an executive director and maintain significant involvement in the company.

“Our work in establishing MDM Engineering as a serious player in this sector has been very successful,” he says. “The company is in a financially sound position and we have been successfully listed. Grant has been hand-picked to take this company forward and to grow it into a business that can compete on an international scale. I’m extremely excited by that.”

MDM Engineering is currently undertaking a number of world-class projects across Africa and has an order book in excess of US$500 million. What’s more, feasibility studies already underway indicate a potential project pipeline of US$1billion: “We are very busy at the moment,” admits Bennett, who couldn’t be happier with the progress the company continues to make. He says that there are a number of significant contracts and the future should be very bright indeed: “We do have a healthy order book. One of our biggest contracts at the moment, valued at some US$200million, is with First Uranium Corporation, at its Mine Waste Solutions tailings recovery project.”

The award follows work done at First Uranium’s underground uranium and gold Ezulwini Mine, one of the first uranium plants to be built in South Africa in almost 25 years, and reinforces the successful working partnership between MDM Engineering and First Uranium.

“Uranium remains a key commodity in the global resources market and we are excited to be involved in expanding uranium production in South Africa,” adds Bennett. “Our ability to deliver projects for our clients on time and on budget was a key factor in this award.”

MDM Engineering is also involved in building a gold plant and a uranium plant for Ezulwini, a copper plant for Metorex at Kinsenda in DRC and a gold and uranium tailings treatment plant for Chemwes in South Africa: “We are very busy,” says Bennett, who believes there is big demand in many African countries.

Bennett adds that with gold prices where they are and an increasing demand for uranium, there will be many more projects popping up over the next few years. “We hope to get a slice of that action,” he says, adamant that MDM Engineering will retain its focus on Africa. “There’s so much money being spent on projects in Africa; the potential is huge. We have experience and been successful in building projects in Africa so we’ll stick with that for the time being.”

With the cash injection – a welcome boost to its balance sheet – and the already healthy order book, the company can be proud of what it has achieved: “We have a stronger balance sheet, which means we can take on a number of big projects in the short term,” explains Bennett, who certainly has a lot to look forward to.

A clear vision

The company’s goal is clear: “We were regarded as a world class engineering company and that is what we want to be again. I think we are achieving that with our current projects. We have been rewarded with some repeat clients and a couple of clients from the old MDM have come to the new MDM. So it shows that the team we have got here, which has some 18 years experience, has a good reputation if you measure it by the number of clients that have come back to us, as well as the repeat business we are getting from new customers - like First Uranium.

“We will look to continue grow the business and we our the short term plan over the next two or three years will be to not be involved in too many projects at any one time.

“We want to be seen as a world class engineering business, which I think we are. Then we want to get to a level where we are very profitable and stay profitable and we will do that by taking on projects that we know we can deliver on time and on budget. That is key.”

Click here to view the corporate brochure on MDM Engineering