Sundance Resources has appointed Portuguese construction company Mota-Engil Africa to build the $US3.5 billion port and rail infrastructure for the Mbalam-Nabeba iron ore project.
Mota-Engil Africa will design and construct a 510-kilometre railway in Cameroon, a 70km rail spur line from the Nabeba mine to the Cameroon railway, and a 35 million tonnes per annum deep water mineral terminal facility, capable of loading China-max vessels.
Standard Bank, Africa’s largest bank by assets and earnings, has been appointed as financial adviser and mandated lead debt arranger for the project.
Sundance CEO and managing director Giulio Casello said the appointment of these groups marked a pivotal point in the project’s development.
“The Mbalam-Nabela iron ore project will be one of the lowest cash-cost producing assets in the world,” he said.
“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.”
Mota-Engil Africa and Sundance yesterday signed the binding and bankable EPC contract for the construction of the Cameroon portion of the port and rail infrastructure component of the project.
A separate EPC contract for the spur line rail component of the Nabeba project will be signed in the coming days.
In order to secure agreed terms for the EPC contract and indicative terms for debt funding, Sundance, along with the assistance of Standard Bank, will proceed with delivering the project equity funding strategy.
Construction expected to take 3.5 years following financial close, which Sundance aims to achieve by mid-2015.
Sundance has also received three proposals for construction of the mine plants and associated infrastructure, which includes accommodation villages, workshops, a diesel power plant and an aerodrome.
The company has not awarded a formal mining contract at this time.
Sundance’s share price fell by 9 per cent to 9.1 cents at 10:15am WST.