SUNDANCE Resources has named Mota-Engil Africa the engineering, procurement and construction contractor for the Mbalam-Nabeba project’s $US3.5 billon ($A3.75 billion) port and rail infrastructure. One of Africa’s largest banks, Standard Bank, has also been appointed as financial adviser and lead debt arranger for the project’s rail, port and mines, located on the border of the Republic of Cameroon and the Republic of Congo. Mota-Engil’s role includes design, construction, testing and commissioning of a 510km railway from the Mbarga mine in Cameroon to the mineral terminal facility at Lolabe on the country’s west coast. It also includes a 70km rail spur line from the Nabeba mine in the Republic of Congo to the Cameroon railway. The 35 million tonne per annum deepwater terminal, capable of loading Chinamax vessels, is also part of the work. “The decision by Mota-Engil and Standard Bank to take on the key roles of engineering and construction contractor and lead debt funding arranger is a major vote of confidence in not only our company and the project but also in the central African countries of Cameroon and Congo and our belief that this will become a world-class iron ore region,” Sundance CEO Giulio Casello said. “The Mbalam-Nabeba iron ore project will be one of the lowest cash-cost producing assets in the world. “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.” Cameroonian Prime Minister Philemon Yang was at the contract signing ceremony yesterday and said the development was a significant milestone in the country’s economic development. “The importance of such a contract cannot be diminished in what it represents for the future of Cameroon’s mining industry,” he said. “The iron ore project expertise of Australia’s Sundance Resources, together with the rail and port construction capability of Mota-Engil Africa and the financial strength of Africa’s largest bank Standard Bank, make a formidable team to develop the Mbalam-Nabeba project, which will bring significant employment benefits and economic growth to our country.” Key terms of the contract with Mota-Engil include a construction period from financial close of 3.5 years, with the contractor meeting and complying with the Equator Principles. The work guarantees a system to produce, transport and ship 35Mtpa and includes performance bonds and damages if the system does not meet the required throughput. International standards and specifications and nominated Australian standards will be used in the contract. Sundance said it expected a debt to equity ratio for the project better than 70:30. Standard Bank has already received several expressions of interest for financing. Sundance said it was aiming to achieve financial close for the project funding by mid-2015. The provision of project equity is expected to be finalised in parallel with that work. In other areas Sundance said it had received three proposals for construction of the mine plants and associated infrastructure, including accommodation villages, workshops, a diesel power plant and an aerodrome. The next step on this front requires one of the contractors to complete front-end engineering and design work to generate a fixed-price contract, which is expected to take about six months.
Cheers,
Samson
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