Business
5E Advanced Materials Hires New Contractors to Complete Small Scale Boron Facility, Removing Matrix Services, While Filing Complaint to Recover Damages
By engaging new contractors to work alongside 5E employees, the company will drive a stronger outcome and correct the outstanding issues left by Matrix
About this update from 5e Advanced Materials, Inc.
[{"type":"text","content":"By engaging new contractors to work alongside 5E employees, the company will drive a stronger outcome and correct the outstanding issues left by Matrix Services, while completing last-mile construction activities of the Small-Scale Boron Facility (SSBF)\nHESPERIA, Calif., July 18, 2023 (GLOBE NEWSWIRE) -- 5E Advanced Materials, Inc. (Nasdaq: FEAM) (ASX: 5EA) (“5E” or the “Company”), a boron and lithium company with U.S. government Critical Infrastructure designation for its 5E Boron Americas (Fort Cady) Complex, has filed a complaint with the United States District Court for the Central District of California against Matrix Service Inc. (“Matrix”) alleging numerous breaches by Matrix of its contractual obligations to 5E, which lead to cost and schedule overruns. In April 2022, 5E Advanced Materials entered into a contract with Matrix to lead the construction efforts in building the Company’s Small-Scale Boron Facility (SSBF) in Newberry Springs, California. As part of the contract in order to fulfill its scope of work, Matrix agreed to provide all construction project management, procurement services, and construction work through mechanical completion. After repeated cost escalation and schedule misses, 5E determined that Matrix could no longer deliver on the agreed-upon scopes of work as defined by the contract, and thus 5E made the decision to demobilize Matrix from the project site. 5E has engaged new speciality-skill contractors to correct the outstanding issues left by Matrix and complete last-mile construction activities. In the interim, 5E has used internal personnel to advance the facilities’ construction and developed detailed work packages which the new contractors will execute on. With the new contractors on site, 5E personnel will refocus their efforts on the completion of commissioning activities. The legal action taken by 5E against Matrix Services seeks the recovery of significant damages incurred by the Company due to Matrix’s cost and schedule overruns, as well as damages due to system defects that have since been rectified at the Company’s expense. The Company continues its guidance that the SSBF’s ability to produce boric acid is on track and will align with the EPA’s authorization to inject, which is the final condition the company needs to clear under its permit. Figure 1 – 5E Boron Americas Complex (Photo ...