Gov't to construct railway to transport Mbalam iron

The Cameroonian Government has agreed to seek financing to ensure the 100% construction of the railway infrastructure for the transportation of iron in Mbalam-Nabeba iron deposit located between the East of the country and Congo, the Australian operator Sundance Resources said on Wednesday.

Funding between 6 and 12 months should be obtained through a loan from China where Prime Minister Philemon Yang had just visited, and other possible friendly countries.

The operator, for its part, should focus only on the development of the mine but will pay a rate set agreement for the use of the 510 km long infrastructure, in addition to the other 70 km connecting the Congolese Nabeba road mine.

The Cameroonian side will then hold 98% of rail and port infrastructure in transportation and export, the operator should also obtain free of charge a 2% interest on such infrastructure up to the date for the first commercial production.

From May, Sundance Resources estimated between 35 million and 40 million tons of iron ore content which annually could be drawn from the Mbalam site over a period of 35 years.

This re-evaluation through a more sophisticated, dynamic simulation "confirmed that rated capacity can be increased with the addition of a loop that goes together with an additional railway siding, subject in capital cost of $ 10 million".

With this new deal, Sundance Resources indicated that turnover should increase the order of annual $ 295 million.

Beginning June 2014, the Cameroonian Government and the Australian firm signed three concession conventions and a contract for the design and construction of infrastructures on the mine and the construction of a railway line.

These agreements also included the erection of an ore terminal at the port of Kribi (South), where the production of all infrastructure was previously planned to be carried out by the Portuguese company Mota Engil will be evacuated.

Cam Iron, local subsidiary of Sundance resources, had the same opportunity and concluded a contract with the Standard Bank of South Africa, in charge of the mobilization of funds for implementing such infrastructures, estimated at 3900 billion CFA FRANCS.