Sundance says to spend $600 mln on Congo iron mine
BRAZZAVILLE (Reuters) - Australian mining company Sundance Resources will spend $600 million to develop its Nabemba iron ore mine in northwest Congo Republic, the head of Sundance's local unit said on Wednesday.
The Nabemba mine, which is expected to start producing in 2014, will have a capacity of 21 million tonnes per year and a lifespan of about a decade, with output to be shipped via rail to Cameroon's Kribi port for export overseas.
The project will be one of the two main sources of iron ore for Sundance's mammoth Mbalam iron ore export venture, with the other source near Congo's border in Cameroon.
"The production of iron ore from Nabemba (...) will transform Congo into one of the biggest iron ore exporters in the world, and we expect to invest nearly $600 million in this project," Andre Baya, head of Sundance unit Congo Iron, told a news conference.
Sundance holds an 85 percent stake in the Nabemba project, with the rest held by Congolese investors and the state. Preliminary studies have identified some 210 million tonnes of probable reserves at Nabemba.
The deposit will be linked by rail with Sundance's iron ore concession across the border in Cameroon, which is expected to come on line in 2013.
Last month, Sundance said it expected the Mbalam project's overall costs to rise beyond an initial $3.4 billion estimate due to development of the Nabemba mine. Its managing director used an estimate of $4 billion in an interview with Reuters last week.
The entire Mbalam project is expected to yield 35 million tonnes per year for ten years, followed by a second phase of production of itabirite concentrate products. according to the company's web site.
Sundance is seeking a deal with Chinese companies to help build the railway line and deep sea port in Cameroon vital to exporting the iron ore from the venture.
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