Brockman Resources inks deal with Sinosteet for iron ore off take
In the latest deal between China and an Australia iron ore developer, Brockman Resources (ASX: BRM) has signed a deal with China's largest iron ore importer, Sinosteel Australia Pty Ltd, for the purchase of up to 50% of future production from its flagship Marillana Iron Ore Project in the Pilbara region of Western Australia.
The agreement with Sinosteel is non-binding for the purchase of a maximum of 10Mtpa of production over an initial 5-year off-take period.
Sinosteel Corporation is one of China's largest State-owned enterprises and its Australian subsidiary, Sinosteel Australia Pty Ltd, has played a key role in the Pilbara iron ore industry since entering the Channar Mining Joint Venture with Rio Tinto in 1987.
Significantly, the agreement also contemplates the parties discussing wider strategic investment options by Sinosteel in the Marillana Project.
The company said in a statement that "the signing of the MOU confirms the technical acceptance of Marillana Project ore, following the recent release of key metallurgical test work results confirming that the Marillana detrital ore can be upgraded to a final product grade of between 60.5% and 61.5% Fe."
Wayne Richards, managing director of Brockman said "the MOU, while assisting Brockman greatly with the completion of our impending DFS and providing a framework for the finalisation of an off-take agreement for a significant proportion of the Marillana Project's planned production, also allows for wider strategic investment discussions between the two groups."
A Definitive Feasibility Study (DFS) for the Marillana Iron Ore Project is due for completion in Q3 2010.
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