Genmin de-risks Baniaka with 15-year rail and port agreement

Genmin (ASX: GEN) has locked-in more critical infrastructure for its Baniaka iron ore project in west Africa with the inking a 15-year integrated rail and port agreement.

The long-term agreement was secured with Owendo Mineral Port, which will provide Genmin with rail and port services to enable transport of ore from the proposed Baniaka mine site in the Republic of Gabon to ocean going vessels.

Under the deal, Genmin will export a guaranteed 5 million tonnes per annum from the operation on a send or pay basis. The agreement also provides for expanded volume up to 15Mtpa to be transported over 15-years.

Owendo’s services include required rail assets, haulage, train unloading and stockpile management at the port, plus stockpile reclaim and loading onto cape class bulk carriers.

Genmin managing director Joe Ariti said Owendo’s bulk export services “de-risk” the logistics chain for delivery of Baniaka ore to market, while also minimising the initial capital investment required for building the operation.

He noted Owendo had “significant rail and port knowhow” within Africa.

“The signing of the agreement also delivers another major project development milestone, as we remain firmly focused on commencing production at Baniaka in mid-2024.”

Long-term power agreement

Today’s announced rail and port agreement follows a 20-year power supply contract at the start of February with Gabon’s state-owned utility Société de Patrimoine du Service Public de l’Eau Potable, de l’Énergie Électrique et de l’Assainissement (or SdP).

The deal with SdP paves the pay for Baniaka to receive renewable hydroelectricity from the Grand Poubara station, which is along the Ogooue River – about 35km northeast of the proposed mine site.

As part of the arrangement, Genmin will build, own and operate an overhead transmission line from Grand Poubara to Baniaka.

Power prices have been set at less than $0.14 per kilowatt hour and Genmin says this reflects the general lower cost of hydroelectricity compared to conventional power.

Next steps at Baniaka

A pre-feasibility study on Baniaka was published in November last year and gave the asset an initial 10-year mine life based on 168Mt of indicated mineral resources.

The project has a global resource of 760Mt and this only represents 18% of the interpreted 85km strike extent at the project.

To establish the initial 5Mtpa operation, the pre-feasibility study estimates initial capital investment of US$200 million.

“With both the renewable hydropower supply, and rail and port agreements signed in recent weeks, our next project level priority is the submission and approval of the mining permit application, which is supported by 46,000m of drilling, a feasibility study, and an extensive social and environmental impact assessment based on nearly five years of environmental data collection,” Mr Ariti said.

He added the company anticipates the mining permit will be issued by the end of the June quarter.