Australian mining company Sundance Resources has signed a memorandum of understanding (MoU) with China’s Tidfore Heavy Equipment Group regarding operations from the stalled Mbalam-Nabeba project in Cameroon.
Sundance subsidiary Cam Iron has a mining permit application over the previous EP92 in Cameroon.
The MoU is claimed to be a major step towards development of Sundance’s delayed Mbalam-Nabeba iron ore project in Cameroon.
The MoU is aimed at providing a framework for cooperation between the parties and their joint venture partners to establish the required consortium of expertise to fund or assist in sourcing funds to build infrastructure and to bring the project into operation.
Privately owned Tidfore has signed a joint venture framework agreement (JV) with China Civil Engineering Construction (CCECC). Tidfore is involved in supplying, manufacturing and installing high-end material handling, port, and offshore engineering equipment.
CCECC is a subsidiary of state-owned enterprise China Railway Construction (CRCC).
The deal will see Tidfore responsible for the port construction, while CCECC will carry out the railway construction, as well as assist Cam Iron, Congo Iron, and financial institutions to negotiate project loans and project financing.
Congo Iron is a Sundance subsidiary, which holds the Nabeba permit in Congo.
Sundance chief executive officer and managing director Giulio Casello said: “Sundance is pleased to have reached an agreement with substantial parties to progress the development of the Mbalam-Nabeba Iron Ore Project and now awaits the decision of the Government of Cameroon on whether it will grant a further extension.
“Even though there is still substantial work required to obtain the funding required, the high-quality, low-costs and large quantity of the Mbalam-Nabeba iron ore fits well into the needs of the future of the Chinese steel industry. Together with our current partners, we have the basics required to bring this project into production.”
As part of the MoU, Sundance will sell 51% of its stake in Cam Iron to Tidfore for a value to be agreed at a later date once Cam Iron obtains rights to the tenure over the area covered by the previous EP92 for a minimum of three years.
Currently, Cam Iron has a mining permit application lodged for this area. The deal is dependent on the Chinese Government approving the provision of Sinosure insurance, a key step in allowing funders from China to consider the project.
Last July, Sundance reached an agreement with the Government of Cameroon to initially extend the Mbalam Convention by six months that end on 26 January.
The agreement also included a further six-month extension being available if Sundance could show substantial progress on funding the project either by itself or with a credible partner.
Earlier this month, Sundance, Tidfore, and CCECC reportedly met with government representatives in Cameroon to outline their proposal for the project development.
The Cameroon Government has yet to determine whether it will grant Sundance the further extension of the Convention.