Rail MOU extended pending finalization of heads of agreement with rail studies underway
Australian based iron ore development company, African Iron Limited (ASX: AKI) (“African Iron” or the “Company”) is pleased to announce that the rail Memorandum of Understanding with Chemin de Fer Congo Ocean (“CFCO”), which provides access to CFCO’s rail infrastructure has been extended for a period of six (6) months until 23 August 2011. This extension will enable the Company to finalise the presentation and terms of a rail Heads of Agreement (“Rail HoA”) with CFCO.
Key Points:
- Rail Memorandum of Understanding (“Rail MoU”) with Chemin de Fer Congo Ocean (“CFCO”) extended by six (6) months to 23 August 2011.
- The MoU provides African Iron access to CFCO’s rail infrastructure, which passes within 2km of the Mayoko Iron Ore Project (“Mayoko Project”) and was due to expire on 24 February 2011.
- The extension will enable African Iron to finalise the presentation and terms of a rail Heads of Agreement with CFCO.
- Egis International has been appointed to undertake rail studies in respect of the transport of a minimum of 5 million tonnes per annum of iron ore from the Mayoko Project.
On 25 February 2009, DMC Iron Congo (an 80% owned subsidiary of African Iron) entered into a Memorandum of Understanding with CFCO (“Rail MoU”) pursuant to which CFCO granted DMC Iron Congo access to its rail infrastructure. The term of the Rail MoU was for a period of two years from 25 February 2009 and was subject to extension as agreed by the parties.
African Iron has been in active discussions with CFCO with the objective of converting the Rail MoU into the Rail HoA. The Rail HoA will provide the basis for a more formal agreement providing access and operating rights to CFCO’s rail infrastructure on commercial terms for a period of 25 years.
In addition, the Company has appointed Egis International to undertake rail studies in respect of the transport of a minimum of 5 million tonnes per annum of iron ore from the Mayoko Project.
Egis’ scope includes:
- a preliminary layout for a rail head and loading facilities at the Mayoko Project;
- selection of the best location and route, and preliminary capital cost estimate for the spur line from CFCO’s rail line to the Company’s port area at Point Noire;
- an assessment of the rolling stock requirements for transporting 5Mtpa, 7.5Mtpa and 10Mtpa of iron ore;
- a preliminary operating cost estimate for transporting 5Mtpa, 7.5Mtpa and 10Mtpa of iron ore; and
- an assessment of what support facilities would be required to operate and maintain the rail service (workshops etc).
Mr Joe Ariti, Acting CEO of African Iron said “the extension of the rail MoU would enable the Company to finalise discussions with CFCO in relation to the rail Heads of Agreement whilst also enabling it to consider and incorporate any relevant matters into the rail Heads of Agreement from the initial findings of the Egis study”.
Egis International is an international engineering consultancy working in more than 90 countries. Its study, project design and works supervision and expert appraisal activity is organised around the following sectors of activity: transport, water, environment and energy, economic and institutional advice. Egis has been involved in the design and execution of infrastructure projects in the Republic of Congo and maintains an office in Pointe Noire, which is readily accessible to the Company’s incountry management.
To view the full ASX announcement please click here
For further information please contact:
David Tasker, Professional Public Relations
T: 08 9388 0944 / 0433 112 936
E: david.tasker@ppr.com.au
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