West Perth-based mining company Sphere Investments Ltd has signed a memorandum of understanding with Saudi Basic Industries Corporation and Qatar Steel Company for work on its Guelb el Aouj iron ore joint venture in Mauritania.
West Perth-based mining company Sphere Investments Ltd has signed a memorandum of understanding with Saudi Basic Industries Corporation and Qatar Steel Company for work on its Guelb el Aouj iron ore joint venture in Mauritania.
Under the terms of the MoU, the partners have agreed to work towards the joint development of the Project, with the aim of first direct reduction pellet production by 2010.
Sphere, with JV partner Société Nationale Industrielle et Minière, will also establish a holding company, with SABIC owning 34.9 per cent and Qatar Steel holding the balance of 15 per cent.
The full text of a company announcement is pasted below
LEADING industrial companies from the Gulf Region, Saudi Basic Industries Corporation ("SABIC") and Qatar Steel Company ("Qatar Steel") have today signed in Nouakchott, Mauritania a historic Memorandum of Understanding ("MoU") with the Mauritanian iron ore producer, Société Nationale Industrielle et Minière ("SNIM"), and its partner, Sphere Investments Ltd ("Sphere"). SNIM and Sphere are the joint owners of the Guelb el Aouj Direct Reduction Pellet Project ("the Project"), a world class iron ore project initially planned to produce 7 million tonnes per annum (Mt/a) of direct reduction ("DR") pellets for a period of over 30 years from a high quality reserve.
Under the terms of the MoU, the partners have agreed to work towards the joint development of the Project, with the aim of first DR pellet production by 2010. The Project will produce DR grade pellets for steel production by leading international producers including Hadeed (SABIC's affiliate) and Qatar Steel. A new jointly owned Mauritanian company ("Newco") will be established to develop the Project including entering into off-take and other service agreements.
SNIM and Sphere, through a 50/50 holding company, will own 50.1% of Newco with SABIC owning 34.9% and Qatar Steel holding the balance of 15.0%. The investments by SABIC and Qatar Steel will be made subject to satisfactory bankable feasibility study ("BFS") results, expected by late October 2007.
SNIM commenced operations in 1963 and supplies around 12Mt/a of iron ore to the internationally traded market. SABIC is the largest and most profitable non-oil company in the Middle East and one of the top 10 global petrochemical companies. Qatar Steel was the first steel producer in the Gulf region and is a wholly owned subsidiary of Industries Qatar which is in turn 70% owned by Qatar Petroleum. Hadeed and Qatar Steel are the largest steel producers in the Gulf and collectively own 18% of ASX listed Sphere, the company responsible for evaluation of the Project since 2001.
Mr Mohamed Ali ould Sidi Mohamed, Director and General Manager of SNIM thanked the Mauritanian Government and the partners for their important contribution to the success of this event. "This is the beginning of a major industrial development in North Mauritania, a most significant iron ore region with billions of tonnes of potentially high quality deposits. SNIM's immediate ambition is for Mauritania to become a major DR pellet producer. The Project area itself is believed to contain sufficient resources to support multiple DR pellet projects. We are thankful for the hard work of SABIC, Qatar Steel and our partner Sphere and look forward toworking closely with all the parties concerned to bring the Project successfully into production, " he added.
Mr Mohamed Al-Jabr, Vice President, SABIC Metals Strategic Business Unit, said "SABIC has ambitious growth plans and can support the development and expansion of the Project, based on the extensive resources in the Project area. SABIC can play an important role, not only as a major off-taker, but also provide strong technical and operational expertise. We would like to thank the
Mauritanian Government and our new partners for the opportunity to participate in the Project."
Sheikh Nasser Bin Hamad Al Thani, Director and General Manager of Qatar Steel, thanked the Mauritanian Government and the partners for finalising the agreement. "Qatar Steel stands with the project partners in the development of a major new industry in Mauritania to supply DR pellets to support the ongoing expansion of our steel businesses in Qatar and the Gulf," he said.
Mr Alexander Burns, Managing Director of Sphere, thanked the Mauritanian Government and the partners for supporting the Project. "Today marked a significant milestone in the development of a major supplier of iron ore to the Gulf," said Mr Burns. "We look forward to working with SNIM, the Government and our new partners in developing our first DR pellet project together," he said.