the ozzy

Finance
New Africa strategy for Sundance - EXCLUSIVE -
SARAH-JANE TASKER, MINING
477 words
26 June 2013
The Australian
AUSTLN
1 - All-round Country
18
English


SUNDANCE Resources is pushing ahead with a new strategy to develop its west African iron ore project three months after its $1.3 billion deal with China's Hanlong group collapsed.

The junior's chief executive, Giulio Casello, said yesterday that while the company's share price had been hit hard after the demise of the deal with Hanlong, which ended after its chairman Liu Han was detained by Beijing police for harbouring a fugitive, Sundance was now moving forward with a plan to commercialise its flagship Mbalam project.

Sundance has always said it needs a partner to develop the project, that borders the Republic of Congo and Cameroon.

The original thinking after the death of the Hanlong deal was to pursue a joint venture partner, but it is now chasing a two-pronged strategy.

Mr Casello said the port and rail infrastructure to support the project would be separated from the mine and a tender process run for an engineering, procurement and construction (EPC) contract and term sheets sought for ore offtake.

``There are not that many players for a straight joint venture and there are a heap more interested in the separate infrastructure and mine solution,'' Mr Casello said.

The chief executive said after the deal fell over he and his team spent the next few weeks in meetings in Europe and Asia, mainly China, speaking to infrastructure providers. Sundance then returned to China for another two weeks to talk to steel mills.

``Following that, we produced a strategy on where we wanted to go forward, which has now been approved.''

Sundance will start the tender process for EPCs over the next few weeks and also send out term sheets for iron ore take-or-pay contracts. It expects offtake negotiations to be complete by year-end and to have short-listed EPC contractors.

Mr Casello said despite the negative sentiment towards commodity markets, the thinking in China had not changed and the economic powerhouse continued to work on its five-year plan to source more than 50 per cent of its own iron ore.

``It's the perfect time to do this . . . it's the time that China sees as its opportunity to get things done,'' he said. ``The long-term hasn't changed and this has never been an overnight project. We are moving into building and commercialising the project and outside of the majors, there are only a few projects in the world that are moving to a commercial process.''

The junior's share price has been punished since the deal officially ended on April 8 and while Hanlong was offering 45c a share to take over the company, its shares now sit around 7c.

Mr Casello said his role now was to educate the market and investors about the project.