Centrex Metals has signed a five-year sales deal with China’s Baotou Iron & Steel to supply hematite ore from its Wilgerup project, located in the central Eyre Peninsula in South Australia.

Under the deal, Baotou will buy 600,000t of hematite fines each year, with pricing based on the existing Hamersley Benchmark, Centrex said.

Baotou has committed a further A$40m towards Centrex’s Bungalow magnetite project in return for a 20% stake, miningnews.net reports.

The staged investment, first proposed in 2007, will be used for exploration and a number of studies into the project.