Sundance to conclude iron ore partnership talks by June
Australia’s Sundance Resources will conclude discussions with potential partners on its US$4.7 billion (HK$36.5 billion) Africa iron ore project by June and announce a chosen partner three months later, the firm’s chief operations officer told Reuters.
Sundance’s Mbalam-Nabeba project, straddling Cameroon and the Republic of Congo in the central Africa region was thrown in doubt after the collapse of a US$1.4 billion (HK$10.9 billion) takeover by China’s Hanlong Group in April this year.
Hanlong’s pullout from the deal, the fourth international mining deal a Chinese firm walked away from since commodity prices fell last year, had raised concerns the Australian miner may not be able to fund the project.
China National Gold abandoned talks to take over African Barrick Gold, Chinese private equity firm Cathay Fortune Corp withdrew a bid for Discovery Metals and Chalco dropped its bid for a stake in Mongolia coal miner SouthGobi Resources SGQ.TO.
But David Meehan, Sundance’s chief operations officer told Reuters on the sidelines of a mining conference in Cameroon’s capital that the firm was in advanced discussions with several other partners including Chinese firms.
“The Chinese government will support any other Chinese partner. We are in discussion with several Chinese partners but also with others outside China,” Meehan said, adding potential Chinese partners included banks and construction firms.
China, the world’s biggest importer of iron ore, is keen to see the mine developed as an alternative supplier to the world’s top two iron ore exporters, Australia and Brazil.
“We will end the discussions probably in June this year and we will have a shortlist. Three months later, we will know who will be the final partner,” he said.
Meehan said Cameroonian minister Louis Paul Motaze will be invited to China and the government of the Central African state, which has backed the project, will be associated in the final choice a partner.
Motaze heads the Cameroon government steering committee in charge of the Mbalam project.
The project plans to mine about 35 million tonnes of iron ore per year and will include a 510 km (316 miles) railway from Mbalam, about 300 km east-southeast of the capital Yaounde, to Cameroon port of Kribi, to ship the ore.