Sinosteel signs $680m iron ore mine deal with Cameroon

YAOUNDE - Cameroon’s government has signed a $675.96 million high-grade iron ore mining deal with a subsidiary of Sinosteel Cor poration Limited, as China seeks new sources of the steel-making ingredient.

Sinosteel Cam SA, the Cameroonian subsidiary of the state-owned Chinese miner, will develop the Lobe iron ore mine in the central African nation, helping Chi na to diversify its sources of iron ore beyond Australia, with which it is in a trade war, and Brazil.

Under an initial 20-year mining convention, con cluded on May 6 in the cap ital Yaounde, Sinosteel Cam aims to mine 10 million tonnes of ore with 33 percent iron content annually.

It would enrich this to produce four million tonnes of ore with 60 percent iron content, which would then be shipped. High-grade iron ore is particularly valued in making steel because it re sults in lower carbon emis sions than lower grade ore.

The project will be 30 percent self-funded, with 70 percent of the financing coming from bank loans, the convention said.

The Lobe mine, 200 kilo metres southeast of the eco nomic capital Douala and 40 km from the port town of Kribi, holds 632.8 million tonnes of iron ore.

Sinosteel will build a ben eficiation plant, a pipeline to move the ore to the port, a mineral terminal at the port, and a power plant, the con vention said, without spec ifying what type of power plant.

Sinosteel officials have yet to say when they aim to start mining, but under Camer oon’s mining code the com pany must begin within five years from the mining per mit being granted.

The convention allows for 15 percent of the iron ore to be supplied to the local mar ket, but Cameroon could au thorise Sinosteel to export it if local demand is too weak.

The project is expected to generate at least 600 direct jobs and 1, 000 indirect jobs, Cameroon’s Mines m inister Dodo Ndoke Gabriel said.