Brockman Resources has signed an agreement with Sinosteel Australia 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 non-binding Memorandum of Understanding (MOU) with Sinosteel is for the purchase of a maximum of 10 million tonnes of production annually over an initial 5-year off-take period.
The MOU also contemplates the parties discussing wider strategic investment options by Sinosteel in the Marillana project.
Sinosteel Corporation is one of China’s largest State-owned enterprises and its Australian subsidiary, Sinosteel Australia, has played a key role in the Pilbara iron ore industry since entering the Channar Mining Joint Venture with Rio Tinto in 1987. Sinosteel was China’s leading importer of iron ore in 2009, importing more than 40 million tonnes for Chinese steel-making markets.
The MOU, the first agreement signed by Brockman in respect of off-take from Marillana, provides a strong foundation for completion of the definitive feasibility study (DFS) and project development. The DFS is more than 60% complete and is scheduled to be completed during quarter three 2010.
The signing of the MOU confirms the technical acceptance of Marillana ore and follows recent key metallurgical test work results confirming that the detrital ore can be upgraded to a final product grade of between 60.5% and 61.5% iron. The final product specification is comparable with direct shipping hematite ore being mined from other significant Pilbara iron ore projects.
Brockman’s managing director Wayne Richards says, “We are delighted to have signed this MOU with such a well-known and credible off-take partner for the Marillana project.
“This provides strong evidence, not only of the technical acceptance of Marillana project ore, but also the growing level of support from key global groups for the successful development of the Marillana project.”
Sinosteel Australia’s managing director Li Ying says, “We are pleased to have signed this MOU with Brockman and look forward to finalizing the final off-take agreement.
“Our company is keen to cooperate and partner with Australian companies with credible projects seeking to leverage our capability to supply raw materials for China’s steel industry, whether this is iron ore, manganese, chrome ore or coal.”
www.brockman.com.au or www.sinosteel.com

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