Cameroon’s Government has entered a $675.96m deal with a local subsidiary of China’s state-owned mining firm Sinosteel to develop the Lobe iron ore mine in the central African nation, reported Reuters.
The deal, which has been signed with subsidiary Sinosteel Cam, is expected to help diversify iron ore sources for China beyond Australia and Brazil.
As part of the initial 20-year mining agreement, Sinosteel Cam is expected to mine ten million tonnes per annum (Mtpa) of ore with 33% iron content, according to the news agency.
Sinosteel plans to enhance this production to yield 4Mt of ore with 60% iron content for subsequent shipping.
Under the agreement, the project will be 30% self-funded. The remaining 70% of the funding will be procured through bank loans.
Located 200km southeast of the economic capital Douala and 40km from the port town of Kribi, the Lobe mine is estimated to hold 632.8Mt of iron ore resources.
The project will see the construction of a beneficiation plant, a mineral terminal at the port, a pipeline to move the ore to the port, and a power plant.
Cameroon Mines Minister Dodo Ndoke Gabriel was cited by the news agency as saying that the project is expected to create 1,000 indirect jobs and at least 600 direct jobs.
According to Cameroon’s mining code, Sinosteel is required to commission the project within five years of securing the mining permit.
Although the agreement allows for 15% of the iron ore production from the mine to be supplied to the local market, Sinosteel could be allowed to export if required.