Fluor Secures Key BHP Contract for Copper Expansion in Australia

Core Insights - Fluor Corporation has secured a joint venture contract with Hatch for BHP's Olympic Dam Smelter & Refinery Expansion Project, which is a significant opportunity to enhance its mining and metals business [1] - The project is contingent on BHP's final investment decision expected in the first half of 2027, with Fluor recognizing its share of the contract value in Q4 2024 [2] - The expansion aligns with rising global copper demand, with BHP aiming to increase refined copper cathode production to over 500,000 tonnes by the early 2030s and potentially 650,000 tonnes by the mid-2030s [3] Company Growth Potential - Fluor's involvement in the Olympic Dam expansion positions the company to benefit from sustained mining infrastructure spending, particularly as copper is essential for electric vehicles and renewable energy [4] - The contract enhances Fluor's pipeline of high-value projects, potentially leading to substantial revenue growth if BHP proceeds with full-scale expansion [5] - The strategic partnership with BHP may drive long-term shareholder value, especially given the increasing importance of copper in a decarbonizing world [5] Financial Performance - Fluor's shares have gained 27.7% over the past year, outperforming the Zacks Engineering - R and D Services industry's growth of 13.4% [8] - The company secured new awards worth $2.7 billion in Q3 2024, with a consolidated backlog of$31.32 billion, reflecting a 20.5% increase from $26 billion a year ago [10] - Strong demand for Fluor's services has pushed new award margins above its strategic segment margin range of 4-6% [11]