Engineering, procurement and construction management ("EPCM") agreements and engineering procurement ("EPC" or "turn-key") agreements are contractual structures commonly employed in the mining industry for the design and construction of plant and facilities. EPC and EPCM agreements vary widely depending on the exact nature of the infrastructure to be constructed, the expected project scope and duration, the level of risk the principal of a project is willing to accept, budget constraints, and the extent of the principal's core competencies
Under an EPC agreement, the EPC contractor is contracted to provide engineering, procurement and construction services by a principal (which is typically a mineral company). In the case of an EPCM agreement, the ECPM contractor is contracted to provide engineering, procurement and construction management services. Other companies are contracted by the principal directly to provide construction services. These companies are managed by the EPCM contractor on the principal's behalf.
Charltons can assist both mineral companies and contractors in preparing and negotiating the different forms of EPC, turn-key and EPCM agreements utilized in the mining sector. We appreciate that in respect of both EPC and EPCM agreements there is no model precedent agreement and that each project is different. Our goal is to assist our clients develop a strong, coherent agreement, in which the respective rights and obligations of the parties are clearly delineated so as to minimize the need for variation or the possibility of dispute.