GR Engineering secured a contract with Wolf Minerals in 2013 for the engineering, procurement and construction of the Hemerdon project in Devon, south England.
Wolf had claimed that GR Engineering failed to fix an issue with noise emissions and vibrations at the project that led the company to voluntarily shut down operations on weekends to maintain relationships with local communities.
In a statement on Thursday, Wolf said it has entered into a settlement agreement with GR Engineering to “fully and finally settle all claims in relation to the contract, without admission of liability by either party”.
GR Engineering has agreed to pay an undisclosed settlement to Wolf to fund the expected cost of the noise and vibration issue.
Wolf said once it receives the settlement, it will return all security it holds under or in connection with the contract, including a £7.5mln performance bond.
“The settlement is not expected to provide any change in the company's operating performance or cashflows,” the group said.