BCI Minerals signs MoU with Sinosteel to develop Buckland

JOHANNESBURG (miningweekly.com) – Australian iron-ore miner BCI Minerals has signed a non-binding memorandum of understanding (MoU) with Sinosteel Australia to support the development of BCI's 100%-owned Buckland project in the West Pilbara region.

The project comprises proposed mines, a private haul road and a new port at Cape Preston East. BCI is the foundation proponent and lease holder of the proposed 20-million-tonne-a-year Preston East port development, which it envisages becoming a multi-commodity, multi-user port, exporting 15-million tonnes a year of Buckland blend iron-ore, three-million tonnes a year of salt from BCI’s Mardie salt project and two-million tonnes a year of other products.

The MoU provides a framework for cooperation towards potential binding agreements, including marketing and offtake, with Sinosteel Australia facilitating discussions between BCI and potential offtake partners, and potential direct offtake by Sinosteel Australia.

It also provides for engineering services by Sinosteel Equipment and Engineering (MECC) and funding and joint venture (JV) structures including Sinosteel Australia, facilitating discussions between BCI and potential funding partners and potential investment by Sinosteel Australia.

Sinosteel Australia and Sinosteel MECC are related entities of Sinosteel Group Corporation, one of China’s largest and most influential State-owned enterprises.

Sinosteel, through Sinosteel Australia, has been a partner with Rio Tinto for 30 years in the Channar Mining JV, which has produced more than 250-million tonnes of iron-ore.

Drilling is currently under way at Buckland’s Kumina deposit with the aim of defining a mineral resource by March and completing a study on integrating Kumina with Bungaroo South and Cape Preston East by June.

BCI is then aiming to resolve the Buckland project’s ownership, contracting and procurement model and offtake arrangements during the second half of the year, with a final investment decision targeted early in 2019.

Subject to positive project progress and agreement of commercial terms, BCI and Sinosteel Australia envisage entering into one or more formal agreements during the second half of the year.

"Involving a credible and experienced partner such as Sinosteel provides momentum to the development of the Buckland project. Sinosteel has a long and successful history of partnering in Pilbara iron-ore projects and we look forward to working with them to ensure that potential joint venture, offtake, development and funding arrangements can be progressed in a mutually beneficial manner,” said BCI MD Alwyn Vorster.