Short interview with GJ

Sundance signs port, rail deal

• The Australian
• June 07, 2014 12:00AM

Sarah-Jane Tasker

SUNDANCE Resources has taken a giant step forward in the development of its $US4.6 billion ($4.9bn) African iron ore project, awarding the major construction contract for the port and rail facilities.

The Perth-based company, which has had a tough ride since its top executives were killed in a plane crash in the Congo in 2010, announced yesterday it had awarded Portuguese construction company Mota-Engil Africa the $US3.5bn engineering, procurement and construction contract for its Mbalam-Nabeba iron ore project in Central Africa.
Sundance also appointed Standard Bank, Africa’s largest bank by assets and earnings, to advise on funding and to be the lead debt arranger for the project, which is in the republics of Cameroon and Congo.
Chairman George Jones was not deterred by the current volatility in the iron ore price, which is sitting around $US94 a tonne, saying the Mbalam project rated as a tier-one asset.

“I have been working on this project for nine years,” Mr Jones told The Weekend Australian from Brussels yesterday ahead of meetings with investors.

“If you looked at the market on a day-to-day basis you would never build a long-term project.”
Mr Jones, an experienced mining executive, said the cash cost for the project was about $US45-$US50, which he said matched the major miner’s key iron ore assets.

“This project will go ahead and at any iron ore price around existing numbers, this is a very robust project,” he said.
The project includes a 510km railway and 35 million-tonne-per-annum deepwater mineral terminal facility.
“What has come back to us with everyone we have spoken to — potential partners and banks — is that they have all wondered whether the railway could be built at anything like the price we said it would be,” Mr Jones said.
“We now have a very firm EPC contract with a very reputable and experienced contractor in Africa, which is just a fraction under our feasibility number.”

Standard Bank has provided indicative terms for the debt funding of the port, rail and mine facilities in association with the Mota-Engil Africa EPC tender.

Sundance said the bank’s tiered funding plan for debt financing included export credit agencies, development finance institutions and commercial banks.

“We have had plenty of offers to finance bits of the project from infrastructure providers and pension funds and we want Standard Bank to draw all that together,” Mr Jones said.

http://www.theaustralian.com.au/bus...-port-rail-deal/story-e6frg9df-1226946316368#