Finally, a news update, albeit an unconfirmed media yarn. We assume an official company announcement will follow.
Mbalam iron: with the ore terminal, AutSino and Bestway take a leap towards the takeover of Sundance mining assets
Thursday, 24 February 2022 13:57
After the signing, on June 25, 2021, of a memorandum of understanding (MoU) between the State of Cameroon and the companies AustSino and Bestway Finance Ltd, for the construction of the railway of more than 500 km between Mbalam and the deep water port of Kribi, the related contract should be signed on February 25, 2022 in Yaoundé, the capital of the country. According to the official statement made public this Thursday by the Minister of Transport, Jean Ernest Ngalle Bibéhé, Cameroon will take this opportunity to also sign with the same partners, the concession contract for the ore terminal of the deep water port of Kribi.
Clearly, in addition to the construction of the railway allowing the evacuation to the port of Kribi of the iron which will be extracted in Mbalam, in Cameroon, and Nabeba, in Congo, the consortium formed by AustSino and Bestway Finance Ltd should also finance and build in PPP mode (public-private partnership) the ore terminal of the deep-water port of Kribi. He will operate it for a period, which has not yet been revealed, and then hand over the infrastructure to the State of Cameroon.
Thanks to these successive acquisitions of interests in the railway and the ore terminal, this Chinese consortium is making great strides towards taking over the mining assets of the Australian company Sundance on the Mbalam deposit, presented as one of the most important iron reserves in the world. This is indeed the last step to take for this integrated mining project (mining and construction of related infrastructure) to pass into Chinese hands, after its unsuccessful development by the Australian mining junior Sundance Resources, a long-time partner of the States. Congolese and Cameroonians on this project.
Negotiations
Indeed, if in Congo, Sundance has already been excluded from the project in favor of Sangha Mining, controlled by Bestway Finance, in Cameroon, although the last period of extension of the titles of the Australian junior-miner has expired, the government does not has not yet formally assigned these titles to a new operator. Sensing its withdrawal from this project in Cameroon, Sundance Resources opened a dispute with the Cameroonian State on June 2, 2021, in the same way as with the Congo.
But, we learn in a press release published by the Australian company on November 23, 2021, "(…) shortly after the start of these procedures, Sundance and Cam Iron (its subsidiary in Cameroon, Ed) began settlement discussions with the government of Cameroon. To take these discussions into account, it was agreed that the deadline for Cameroon to file its response to Sundance's and Cam Iron's request for arbitration would be extended. The last of these agreed extensions is due to expire on November 30, 2021," Sundance said.
Clearly, despite the arbitration procedure, Sundance does not despair of reaching an amicable arrangement with Cameroon, which is clearly preparing to transfer the assets on the Mbalam deposit to AustSino and Bestway Finance Ltd. This is all the more so since, from sources familiar with the matter, this Chinese consortium would have been willing to bear the cost of a possible conciliation between Sundance and the State of Cameroon. To get an idea of what such an arrangement could cost, the Australian firm is already claiming damages from Congo in the amount of 8.76 billion US dollars, or approximately 4,700 billion FCFA (the overall investments of the project of Mbalam-Nabeba are estimated at 5,500 billion FCFA, Ed).
Such a sum, even reduced by half, should in principle not be within the reach of the Chinese consortium recruited by Cameroon to build the related infrastructure of the Mbalam mining project. And whose service records, both in the financial and mining sectors, are far from eloquent.
