Sundance Resources believes it is on track to secure off-take contracts and financing for its $3.6 billion Mbalam iron ore project in Cameroon by the end of the year.
The company’s acting chief executive Peter Canterbury said these two goals were key parts of the recently launched Mbalam Convention, which is designed to provide globally-competitive fiscal and development terms.
“The maiden high-grade iron ore production will deliver an estimated US$40 per tonne or higher, and will underpin the payback of the capital costs of the rail and port infrastructure components of the project,” he said, in an address to the Paydirt 2010 Africa Downunder Conference yesterday.
“This is significant, as we anticipate 10 years or more of high-grade, direct shipping ore production.
“Mbalam’s financial dynamics will deliver a payback period for the first phase of the project of less than four years.
“From potential strategic partners we are looking for significant off-take agreements for at least 10 years, along with project financing and project construction capability.”
The total project costs include a $394 million iron ore mine, a $1.62 billion rail line, a $556 million multi-user deep sea port at Kribi and a $512 million allowance for indirect costs.
The project also has an estimated production cost of US$19.65 per tonne of direct shipping ore and minimum lifespan of 25 years.
“We anticipate placing orders in the opening quarter of 2011 for long-lead time items and plan to commence early site works by the middle of next year in what we see will deliver Sundance a first mover advantage in this new iron ore province,” Canterbury said.
The plane that crashed in the Democratic Republic of the Congo in June this year, killing all of the company’s directors, was headed to the Mbalam project.
The company has since replaced the board.
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