PERTH (miningweekly.com) – Iron-ore developer Sundance Resources has appointed construction company Mota-Engil Africa as the engineering, procurement and construction (EPC) contractor for its $3.5-billion port and rail infrastructure for the Mbalam-Nabeba iron-ore project, in Central Africa.

The EPC contract would include a 510 km railway from the Mbarga mine, in Cameroon, to the mineral terminal facility at Lolabe, as well as 70 km of rail spur from the Nabeba mine, in the Republic of Congo, to the Cameroon railway.

The contract also included the construction of a 35-million-tonne-a-year deep-water mineral terminal facility, which would include stockyards capable of loading China-max vessels.

Sundance CEO and MD Giulio Casello noted that the company had also appointed Standard Bank to advise on funding and to be the lead debt arranger for the project, as well as the infrastructure.

“The decision by Mota-Engil Africa and Standard Bank to take on the key roles of engineering and construction contractor and lead debt funding arranger is a major vote of confidence not only in our company and the project, but also in the Central African countries of Cameroon and Congo, and our belief that this will become a world-class iron-ore region,” said Casello.

“The Mbalam-Nabeba iron-ore project will be one of the lowest-cost producing assets in the world. Now that we have confirmed capital costs for the project, I believe it is positioned as the most attractive, large-scale high-grade iron-ore project in the world, that is ready for development,” he added.

Sundance was currently targeting production of 35-million tonnes a year at Mbalam-Nabeba, with the project expected to have a minimum mine life of 25 years.

Stage 1 of the operation, which would have a mine life of ten years, would be focused on producing direct shipping ore hematite, while the second stage of the operation would be the continued production of itabirite hematite concentrate.

Casello said on Friday that the company would now proceed to deliver its project equity funding strategy, which would involve parties that had previously expressed an interest in the project.

The provision of project equity was expected to be finalised in parallel with reaching financial close for the debt and equity funding, by mid-2015.

The company was also advancing plans with Standard Bank and its EPC contractor for an alternative funding strategy based on an own-operate and transfer model for the port and rail infrastructure.

If successful, these negotiations could see a greatly reduced equity requirement from Sundance and its partners.