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Downer to build 19 locomotives for Fortescue

26 June 2012

Engineering firm Downer EDI (Downer) has won a A$73m ($73.4m) rolling stock supply and support contract from iron ore miner Fortescue Metals Group (Fortescue) in the Pilbara region of Western Australia.

Under the deal, Downer will collaborate with Electro-Motive Diesel (EMD) to design, build and deliver 19 new SD70ACe/LCi locomotives to Fortescue.

According to the company, the first new locomotives are scheduled to be delivered in August 2012.

Downer will also provide service and support for the 19 units for a minimum of five years under the contract, with an option to extend it further.

Downer chief executive officer Grant Fenn said that the fleet of SD70ACe locomotives will bring significant performance benefits to Fortescue, including additional haulage capability, fuel consumption improvements, exhaust emission benefits and reliability improvements.

"By combining the technical strength and expertise of EMD with Downer's local Australian knowledge and support, we will deliver a fully integrated locomotive that complies with Australian customers' requirements," Fenn said.

All components and systems of the SD70ACe/LCi locomotives will be designed and manufactured by EMD, a subsidiary of Progress Rail and Caterpillar, while Downer EDI will carry out final assembly in Australia.

In March this year, Downer EDI won a A$292m ($312.84m) contract from mining major BHP Billiton to supply EMD SD70ACe/LCi diesel locomotives for use on its heavy-haul iron-ore network in the Pilbara region of Western Australia.

Downer said that if all options of the contract are exercised, the total value of the contract could reach A$400m ($428.56m).

As per the deal, Downer will supply EMD locomotives over the next five years, with the first new locomotives expected to be delivered in the second quarter of 2012.