IRON ORE Sundance Resources’ Mbalam-Nabeba A Central Africa mining game changer Quality iron ore assets in Africa’s remotest regions hold no value unless they can be transported to the coast for export. Developing the continent’s infrastructure to ensure new project viability is being undertaken not only by majors with large bank balances, but also by juniors such as Sundance Resources. Not only will this Australian junior build two major iron ore mines in two central African countries, but also a massive 580 km railway line to see its product travel international waters, writes Laura Cornish. IN SHORT Sundance Resources’ US$4.7 billion iron ore project in Cameroon and the Republic of Congo is set to alter the region’s mining future when it starts producing in 2018. U nlike South Africa, both Cameroon and the Republic of Congo (ROC) have been proving more recently they are mining and investor-friendly countries. Numerous mining companies have acquired tenements in the regions and are working fervently to develop these properties into cash-generating mines. ASX-listed iron ore junior Sundance Resources is one such company, although it has been exploring and working on its Mbalam-Nabeba iron ore properties since 2007. To date the company has injected in the region of US$300 to 400 million into the project to get it to the point it is today – ready for development. The Mbarga mine lies in Cameroon, just north of the border which separates it from its sister property Nabeba about 40 km south in the ROC. Together, both open cast mines have been designed to deliver 35 Mtpa of high grade iron ore for the Chinese export market. The mines alone are an enormous undertaking but represent only 20% of the entire Sundance project. The company must first complete the largest (80%) project component – the construction of a 510 km railway line linking its Mbarga mine to the country’s Lolabe port and a 70 km spur line linking both mines together; as well as a new mineral terminal facility, or port, capable of carrying high volume bulk iron ore carriers. The project is set to be one of the largest in the sub- region and is estimated to increase Cameroon’s GDP by approximately Mbalam-Nabeba has a grade hematite resource totalling 775.4 Mt at a 57.2% grade 24 MINING REVIEW AFRICA ISSUE 6 2014 3% during construction and 10% once in production. It will directly employ about 2 500 locals, which will indirectly create job opportunities in the order of 10 000 people. “To date we have achieved a number of project milestones and are on the brink of starting project construction,” says Sundance Resources CEO Giulio Casello. “Milestones necessary to ensure we can build both mines and deliver sufficient capacity to validate the construction of an WHAT They said We have based our financial assumptions on an $85/t rate into China. I think this is conservative but has general market consensus. The short term price however is irrelevant for us and doesn’t affect the project’s economics. Our operating cost projections are $21.20/t – delivering into China for $50/t, which should make us one of the lowest cost producers in the world with an extremely robust project against any iron ore price. Giulio Casello