Australia miner pushes on with $3.5 bn Cameroon project
Cameroon Prime Minister Philemon Yang takes part in the executive session 1 meeting at the Commonwealth Heads of Government Meeting in Perth, Australia on October 28, 2011 - by Paul Kane
Sundance said it had appointed engineering and construction company Mota-Engil Africa to build the multi-billion-dollar port and rail project and South Africa's Standard Bank as the venture's financial adviser.
"The Mbalam-Nabeba iron ore project will be one of the lowest cash-cost producing assets in the world," Sundance chief executive Giulio Casello said in a statement.
"Now that we have confirmed capital costs for the project, I believe it is positioned as the most attractive large-scale, high-grade iron ore project in the world that is ready for development."
The deal comes despite iron ore prices slumping about 30 percent this year, falling below US$100 a tonne in May for the first time since 2012 owing to a supply glut.
The project includes a 510-kilometre (316-mile) railway, a 70-kilometre rail spur line and a 35 million tonnes per annum (MTPA) deep-water port on Cameroon's west coast.
The miner said last month the project would be one of the largest in sub-Saharan Africa and was estimated to increase Cameroon's economic growth by about 10 percent once in production.
Cameroon's Prime Minister Philemon Yang hailed the contract between Mota-Engil and Sundance, which was signed in the capital Yaounde on Thursday, as a "significant milestone".
"The importance of such a contract cannot be diminished in what it represents for the future of Cameroon's mining industry," Yang said in the Sundance statement.
He added that it "will bring significant employment benefits and economic growth" to his country.
Construction of the port and railways are expected to start in mid-2015 and take three and a half years.
Sundance said in a presentation at the Africa Iron Ore Conference on Tuesday in Johannesburg that the Mbalam-Nabeba project was a "strategic fit" for the company amid continued Chinese demand for iron ore.
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