Sundance Resources has postponed the development of its Mbalam-Nabeba iron ore project in Cameroon after China Gezhouba Group Company, selected to build the project's key port and rail infrastructure, did not sign the contract due to low ore prices.
In October 2015, Sundance said that the proposed signing of the engineering, procurement and construction (EPC) contract between the Government of Cameroon and the Chinese company would support the government's application for a loan from China to construct the infrastructure.
China Gezhouba requested a postponement of the contract signing until market conditions improve.
Previously, Sundance expected the contract to be signed during the December 2015 quarter. It was estimated to cost around $5bn.
The company said in a statement: "The postponement was unexpected for both Sundance and the Government of Cameroon given the recent advances made with the EPC contract ready for execution.
"The company is now assessing the impact this postponement will have on the project and will update shareholders in the near-term once this assessment has been completed."
The Mbalam-Nabeba iron ore project lies in the border of Cameroon and the Congo.
In April 2011, the company completed the definitive feasibility study for stage one and pre-feasibility study for stage two of the project.
As part of the project, a 510km rail line will be constructed for the transportation of iron ore through Cameroon.
In addition, a 70km rail spur line will be constructed to connect the Nabeba mines in Congo.
The project also includes construction of a mineral export terminal designed for taking bulk iron ore carriers of up to 300,000t.