Civmec has commenced a legal proceeding against Altura Mining to recover payment for works that were undertaken two years ago at the Pilgangoora lithium project in Western Australia.
Civmec stated that it was owed around $4.5 million excluding GST, having carried out “substantial additional works beyond the original scope” and experienced delays in completing the works.
This was blamed on Altura’s failure to fulfil its obligations under the contract, including engineering deliverables and the supply of free issue items.
Civmec maintained that during negotiations in January last year, Altura agreed to pay an amount of approximately $2.4 million excluding GST to settle Civmec’s outstanding claims.
The contractor also offered to compromise $2.1 million to allow Altura to achieve the above settlement.
Civmec stated that Altura offered the company to consider taking equity in the form of shares in lieu of some, or all, of the agreed settlement sum, which Civmec declined.
This discussion was now denied by Altura, which stated that the delays resulted in damages should be payable by Civmec in accordance to the contract.
“The financial impact of the delays attributed to Civmec far exceeded the liquidated damages payable or the amounts that Civmec is now pursuing through legal proceedings,” Altura stated in an ASX announcement.
“… The decision by Civmec to commence legal proceedings against Altura is disappointing.
“Altura is confident in its position and will vigorously defend the proceedings.”
Civmec chief executive Patrick Tallon said the company was forced to take an extremely disappointing stance, “particularly given the efforts made by Civmec throughout the project and the continuing flexibility afforded to Altura, even to the extent of agreeing to payment plans to assist them throughout their ongoing difficult financial circumstances.”
Civmec was awarded the contract to install structural steel, platework, grating, handrails and mechanical equipment for Pilgangoora’s lithium process plant in late 2017. The plant was commissioned and operational in 2018.
“To be publicly praised by Altura management for the works done at the plant’s official opening and to be still awaiting payment two years later is unreasonable,” Tallon said.
“Civmec is confident of its position and does not consider that the proceedings will have a material impact on the financial performance of the company for the year ending 30 June 2021 or any subsequent financial years.”