Xstrata has exercised a call option agreement over Zanaga Iron Ore Company (ZIOC) subsidary Jumelles, which owns the Zanaga iron ore project located in the Republic of Congo.
Under the agreement, Xstrata will acquire a 50% plus one share interest in Jumelles in return for a commitment to fund a feasibility study for a minimum of $100m.
Following the call option exercise, Xstrata will get management control over the Zanaga project, and ZIOC will have a strategic partnership in the project
As part of the feasibility study, Xstrata will conduct value engineering work on a pre-feasbility study.
Xstrata Coal chief executive Peter Freyberg said the company’s decision to exercise the option to acquire management control of the Zanaga project enables Xstrata to evaluate in greater depth the potential of the project and build a meaningful iron ore business over the medium term.