SEATTLE (Scrap Monster): Chinese Sinosteel Corporation Limited announced that its subsidiary in Cameroon has signed a high-grade iron ore mining deal with the country’s government. Sinosteel Cam S.A signed the deal worth approximately $676 million, which will see development of the Lobe iron ore mine in the central African nation.
The company concluded an initial 20-year mining convention on May 6th in the capital city of Yaounde. As per the deal, Sinosteel will mine approximately 10 million tonnes of ore with one-third iron content per annum. Nearly 4 million tonnes of ore with 60% iron content will be produced and shipped. The project will be 30% self-funded, with the remaining 70% financed through bank loans.
As per the deal, Sinosteel will build a beneficiation plant, a pipeline, a mineral terminal at the port and a power plant. However, it did not specify the type of power plant to be built. Although the date of commencement of mining has not been officially declared, the country’s mining code insists that the company must begin mining within five years from the date of granting mining permit.
The convention makes it mandatory to supply 15% of the iron ore to the local market, but Sinosteel could be authorized to export if market demand remains too weak.
The project is expected to generate at least 600 direct and 1,000 indirect jobs.
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