JOHANNESBURG (miningweekly.com) – ASX-listed Sundance Resources expects to enter final negotiations with engineering, procurement and construction (EPC) contractors regarding the building of infrastructure at its Mbalam-Nabeba iron-ore project, in Central Africa, by the end of this year.

The company on Tuesday announced that it had identified a number of potential interested parties and possible structures for the commercialisation of the project.

Sundance, in May, entered into talks with various potential partners for the development of the project after the $1.4-billion takeover of Sundance by China’s Hanlong Group fell through in April.

“We have spent the last few weeks in discussions with potential interested parties, including steel mills, iron-ore traders and infrastructure providers to test a range of commercial solutions and to determine which would provide the best outcomes in the current market.

“We have not only received encouraging support for these proposed structures out of China, but also from non-Chinese companies, all of whom believe Mbalam-Nabeba is one of the few and best development-ready iron-ore greenfield projects currently on the market.  We are now moving to building this project,” Sundance CEO and MD Giulio Casello said.

The company had identified specific commercial structures, which could form the basis for funding the development of the project. These include a joint venture (JV) for both the mines and transport infrastructure, as well as a separate JV for the mine and an independent infrastructure solution.

Sundance plans to run two concurrent processes – one at the mine level for a JV or for secured take or pay iron-ore offtake contracts – and another for the development of the deep-water port and rail infrastructure through EPC contracts or an independent infrastructure consortium. 

In the coming month, Sundance will start a process to elicit responses in these two areas.

Steel mills, traders and other iron-ore users will be requested to confirm their interest in the project and to provide commercial terms regarding purchased equity at the mine level, purchased equity at the project level and secured take or pay iron-ore offtake contracts.

Concurrently, Sundance will also start a tender process for the EPC contracts for the independent rail and port infrastructure.

“By the end of 2013, we aim to have agreements in place for the full production capacity of 35-million tonnes per annum and be in final negotiations for building the infrastructure with EPC contractors,” Casello said.