Guinea: Bellzone Signs with Chinese Investor on Iron Ore Projects and $2.7B Rail and Port Projects
By: Loni Prinsloo
2nd August 2010
Updated 1 hour 24 minutes ago
JOHANNESBURG (miningweekly.com) – Aim-listed junior miner Bellzone Mining on Monday signed a definitive agreement with China International Fund (CIF) to fund and develop the $2,7-billion rail, port and associated infrastructure services required for its Kalia iron-ore project in Guinea.
In addition, CIF had agreed to fund the development of Bellzone’s Kalia mine, estimated at $1,2-billion, which has a maiden 2,4-billion ton inferred Joint Ore Reserves Committee-compliant magnetite deposit.
Bellzone Mining MD Nik Zuks said that the signing of the definitive agreement was another significant step towards the realisation of the company’s 50-million tons-a-year Kalia mine.
“Our partnership with CIF provides for a funded infrastructure solution for the Kalia mine product and secures for the Kalia mine development.”
In accordance with the agreement, CIF had the first rights to purchase up to 100% of the mine’s offtake. “With the offtake agreement, we have effectively established a market for our product. This agreement adds significant value to the company by removing the largest risks to project completion,” said Zuks.
In addition to the Kalia mine developments, Bellzone and CIF would also work together in a 50:50 joint venture to develop the Forecariah iron-ore permits, 40 km from the Guinea coastline. Bellzone and CIF believe Forecariah has the potential to provide early production and cashflow.
Zuks said that Bellzone’s commitment to the Kalia iron-ore project and mineral and infrastructure development in Guinea was well known and that he had full confidence that its commitment was matched by CIF, which had a proven record of developing large infrastructure projects in Africa.
“These projects, as the Guinea Mines and Geology Minister Mahmoud Thiam had previously said, would unlock Guinea’s mineral potential and significantly increase revenue for Guinea.”
Bellzone had already receive $40-million from CIF in June towards the funding of an infrastructure feasibility which was forecasted for mid-2011. Following completion of the feasibility study, funds would be applied towards the implementation of rail and deep-water port infrastructure, rolling stock and associated services required for the transport and export of production from the Kalia mine.