The only ASX junior exposed to Mozambique’s new $50 billion LNG construction boom
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Special Report: RBR has just won its first contract to supply the biggest resource development African has ever seen, marking the start of what it believes is a company-making opportunity to provide accommodation, training and labour to this new multi-billion-dollar industry.
After five years of preparing to provide vital services to the LNG construction boom now getting underway in Mozambique, RBR Group (ASX:RBR) is up and running with its first major contract.
The little-known Perth company with a market cap of just $10 million identified the enormous opportunity to provide its services to some of the biggest petroleum companies in the world as they set about building two massive LNG projects on the Mozambican peninsula.
It is estimated that tens of thousands of workers will be required to build these gas processing facilities and related infrastructure. And the Mozambican Government has stipulated that all unskilled and semi-skilled jobs must be filled by Mozambicans.
This means thousands of locals will need to be identified as being suitable for the jobs, they will need to be trained, placed with the various project contractors and accommodated in a COVID-safe manner.
It is an enormous recruiting, training, labour hire and accommodation opportunity. And this is where RBR’s skills and facilities and extensive preparation are coming to the fore.
RBR has just announced that it has won its first contract – to develop a 668-person camp for LNG construction workers in conjunction with its equal joint venture partner, Mozambique remote camp specialist Projectos Dinamicos.
RBR says the contract, which has already started, is expected to generate up to $23 million for the joint venture partners over its 18-month term. There are also provisions for the agreement to be extended for a further three years.
Given the huge number of workers needed for the projects, the demand for accommodation is widely expected to exceed supply for many years.
“This camp project itself will create many jobs for members of the local community, which in turn will create immediate and ongoing demand for RBR’s core business activities of training and labour provision,” RBR says.
“The company will train and provide construction workers for the camp establishment, as well as for ongoing maintenance activities.”
Importantly, the camp will also pave the way for RBR to win training and labour hire contracts with the LNG projects because it will enhance the company’s commercial relationship with the primary contractors.
RBR already has extensive training capability in place, enabling it to teach local Mozambicans skills in several of the key fields required by the construction projects.
Discussions are now underway on more contracts including training opportunities relating to the Mozambican LNG projects and a potentially-significant training contract in Western Australia.
“We believe there will be immense demand for our services over coming months as these projects ramp up, requiring workers to be identified, trained and accommodated,” RBR managing director Richard Carcenac said.
“After many years of preparation, we believe RBR’s time has come.”
This article was developed in collaboration with RBR Group, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.