SNC-Lavalin Group Inc. refuses to disclose the location of a “serious problem” in his mining business, which led to a tremendous decline in reserves on Monday. But analysts point to Chile. Shares of the company fell by 27.81% on the Canadian stock exchange yesterday.
AltaCorp Capital, Desjardins Capital Markets, Canaccord Genuity and Raymond James say that the copper mine that Codelco manages is a likely source of CNS suffering. SNC General Director Neil Bruce declined to name the project and said that the problem contract was concluded in 2016.
According to the date, "the contract is likely to be signed for the design, acquisition and construction for the construction of sulfuric acid plants for Codelco," said Chris Murray from AltaCorp on Tuesday.
The mysterious mining fiasco on Monday contributed to the largest fall in 25 years in SNC, based in Montreal, which also suffered a shock on depreciating its business in Saudi Arabia for its diplomatic struggle with Canada.
The SNC is working to get out of the expected legal fight against Canadian prosecutors on past corruption charges. The lack of an agreement with Canada probably cost the SNC more than $ 3.8 billion. The US is in the form of lost income and continues to damage its international reputation, Bruce said in an interview with Bloomberg TV last month.
Daniela Pizzuto, SNC representative in Montreal, declined to comment on whether Codelco was the source of the problems. Codelco also declined to comment.
Bruce told analysts at the conference on Monday that partly because of the excessive cost of the problematic project was the desire to “satisfy the client”, which made the SNC abandon risk reduction processes. The executive director said the project would be completed early in the second quarter.
SNC-Lavalin announced two contracts with Codelco in November 2016. One of them involved replacing the wastewater treatment plant at the Chuquicamata copper smelter in northern Chile to meet new environmental regulations. The second was for the construction of two sulfuric acid plants in the same place.
The plant ceased operations in December and is expected to resume operations in February, but now Codelco reports that it will be shut off until March. The work takes longer than expected, in part because the miner thought he could meet the demands by upgrading the old plants, but then decided to build new facilities, said Codelco Executive Director Nelson Pizarro.