IMIC signs Chinese iron ore offtake agreement for Nkout

LONDON, Sept 2 Mon Sep 2, 2013 2:31am EDT

LONDON, Sept 2 (Reuters) - Africa-focused mining and infrastructure firm IMIC said on Monday it signed an offtake agreement with Chinese group Hebei Iron and Steel for iron ore produced from the Nkout project in Cameroon, which IMIC is in the process of acquiring.

Junior miner Afferro <AFFA.L< agreed to a $190 million cash-and-paper offer for the company from IMIC in May.

IMIC, which is allied with African Iron Ore Group, run by Afren Plc founder Bert Cooper, says it can build the infrastructure necessary to begin production at its project in Cameroon.

IMIC said the offtake agreements will be used as a vital part of financing the project through Chinese partners such as Hebei - the largest steel producer in China.

A similar offtake agreement was crucial to African Minerals building the railway connecting their iron ore project in Sierra Leone, according to IMIC. African Minerals is one of the only junior iron ore producers in West Africa.