Exploration company Kenmare Resources has signed a fixed price contract to build the Moma Titanium Minerals Mine in Mozambique with a joint venture formed for the project between Multiplex Ltd and Bateman.
Multiplex is a large contracting group based in Australia with operations around the globe. Bateman is an international engineering group with specific mineral sands experience and experience of working in Mozambique.
The new deal is established on a base price of $220m with provisions for cost overruns up to $240m. The construction project at Moma is expected to take two years.
The contract is subject to a number of conditions, which Kenmare says are due to be satisfied shortly. The most significant of these is the making available of debt financing to the Moma project. This is also conditional on the availability of an equity financing component.
A debt funding package has been negotiated with a lender group comprising the European Investment Bank, the African Development Bank, Dutch and German development finance institutions and South African Commerical Bank ABSA. The EIB and ADB have received board approvals for their loans while the other institutions are expected to do so in the coming weeks.
The financial plan for the Moma project sees revenue generation of about $85m a year over 20 years with operating costs of about $23m a year. Sufficient mineral resources have been identified at Moma to more than double the mine life.
Sales contracts covering more than 50% of the annual revenues from Moma for the first five years of production are in place.
'The signing of this contract is the culmination of a lot of work,' commented Kenmare's Chairman Charles Carvill.
'The product market is looking very positive and we are looking forward to proceeding with the construction phase of the project and moving towards shipping our first product,' he added.
