African Minerals Limited (AIM: AMI), the iron ore project development company that is developing the Tonkolili project in Sierra Leone has announced that, further to its press releases of 16 July 2010 and 14 October 2010, the Company has reached an amended agreement with Cape Lambert Resources Limited in respect of the Marampa and Pepel Infrastructure Projects.
The key points of the previously disclosed agreement are that:?Cape Lambert would have the right to fund 33% of the refurbishment costs of the Project in return for an equivalent of 33% interest in the Project, and a right of first refusal to match any third party offer, if received, for the balance of the Project.
The Company would provide Cape Lambert with infrastructure capacity (excluding rolling stock) for 2Mtpa production from their Marampa mine, through Pepel Port on commercial terms to be agreed between the parties.
Further to negotiations between the two parties, both companies have now confirmed that Cape Lambert has been granted the option to increase transport capacity to 5Mtpa, or will not be exercising its right to buy into the Marampa / Pepel Infrastructure Project, but will take up its right to access the transport infrastructure, under the following terms:?AML will provide 3rd party access rights to Cape Lambert on commercial terms to transport up to 2 Mtpa of its iron ore production from its Marampa mine on the Marampa Railway and via Pepel Port, using AML’s stockyard and Cape Lambert will have an option to increase this transport capacity to 5 Mtpa once the Tagrin Infrastructure Facilities are in full operation.
?Any extension required to construct the “spur” to the Marampa Railway linking Cape Lambert’s operation at Marampa to the current route of the Marampa Railway will be at their cost; Cape Lambert will be responsible for sourcing its own rolling stock and locomotives; The parties will enter into good faith negotiations to finalise and execute full form legal agreements reflecting the commercial and legal terms as set out above.
In response the Executive Chairman of African Minerals; Frank Timis, said “We are pleased to have reached agreement with Cape Lambert to provide them access to export routes for the Marampa Iron Ore Project and we are happy to retain our ownership of this important transportation infrastructure. The surplus capacity in the infrastructure system that we are constructing will mean that this Marampa tonnage is in addition to African Minerals’ initial Phase 1 capacity of 12Mtpa.
Sierra Leone will benefit from this additional tonnage through the successful development of a further project by another operator, and African Minerals will also benefit through its own equity holding in Cape Lambert.”
BY William Freeman