Equatorial Resources aims to invest $1.2 billion in Congo iron project
24 November 2016
Africa-focused Australian mining company Equatorial Resources Ltd (EQX.AX) will aim to invest around $1.2 billion to develop its Badondo iron ore project in Republic of Congo, the company said.
John Welborn, a non-executive director of Equatorial Resources and chief executive of its Congolese unit Congo Mining Exploration Ltd, met Prime Minister Clement Mouamba on Tuesday and submitted an application for a mining license.
"The recent improvement in the price of iron ore makes Equatorial confident that it will find the necessary financing to develop the mine," the company said in a statement distributed late on Tuesday after the meeting.
African mining, particularly large iron ore projects, has been hit hard by the global commodities crash.
However, the S&P 1500 composite steel index .SPCOMSTEEL has surged since the U.S. election, bolstered by U.S. president-elect Donald Trump's perceived support for the steel industry.
Chinese iron ore futures are also rising amid news that production at steel mills in northern Hebei province will be curbed or even shut for as long as four months in an effort to combat pollution.
Equatorial Resources estimates annual iron ore production of 40 million tonnes at the Badondo mine and its feasibility study foresees construction beginning next year, the statement said.
Plans for the building of new infrastructure, including construction of a rail line and port to facilitate exports, must be finalised before the project can be developed, it said.