The project will re-process manganese ore stored in tailings stockpiles with the aim of increasing capacity at the facility by 500,000 tonnes annually.

Sedgman will design, supply, fabricate, construct and commission a sands beneficiation plant, port stockpile expansion and associated infrastructure under the contract.

Sedgman chief executive and managing director Peter Watson said the contract was negotiated with GEMCO after a two-year period of close collaboration.

"Our involvement in this project commenced at the early feasibility study stage and we are excited that we have been chosen to deliver the project," he said.

"This is another example of the strength of our ‘create' and ‘build' model as we were able to develop a strong relationship with and demonstrate value to GEMCO from concept through execution.

"The sands beneficiation plant utilises process technologies that we have proven in other commodities and we have been able to leverage this experience together with our successful track record of projects delivery in remote location to provide an enhanced solution for our client.

"It also marks another important milestone in our diversification strategy with over 50% of our current order book in commodities other than our traditional coal market."

GEMCO is a 60:40 joint venture between BHP Billiton and Anglo American. BHP operates the mine at Groote Eylandt.

BHP will spin-off its stake in GEMCO into its demerger company, to list in Australia next year.

The deal comes following last Friday's announcement of a $A59.8 million contract between Sedgman and Alcoa for construction at that company's aluminium refinery in Kwinana.

Shares in Sedgman increased 5.7% this morning to A55c.