Genmin signs non-binding deals with Chinese customers for Baniaka iron ore offtake
The indicated DID resource at Genmin’s Tsengué and Bandjougoy prospects has increased by 107% to 24Mt.
African iron ore explorer and developer Genmin (ASX: GEN) has secured two non-binding agreements to sell and deliver fines and lump product from the Baniaka iron ore project in the Republic of Gabon to customers in China.
The company has signed deals with China Minmetals Corporation and Changzhou Dongfang Special Steel for a total of 3 million tonnes per annum of fines and 1Mtpa of lump over a term of three years.
If legally-binding agreements are established, the companies will commit to the purchase and delivery of 1.5Mtpa of fines and 500,000tpa of lump product each over the period.
Genmin said any legally-binding agreement would be subject to standard conditions precedent for an offtake agreement of this nature, including receipt of all required approvals from government authorities and the commencement of commercial production at Baniaka.
State-owned enterprise
Minmetals is one of China’s largest, multi-national, state-owned enterprises which is vertically integrated across the minerals and metals value chain and aims to ensure national security of resources.
In 2021, it ranked in the top 100 on the Fortune Global 500 list and its annual iron ore trading volume is estimated at 40Mt.
Changzhou is a privately-owned specialist steel producer for the automotive industry as well as lift and escalator manufacturers and has an annual production of 3.5Mt.
Value-in-use tests
Genmin managing director and chief executive officer Joe Ariti said the offtake deals follow last week’s preliminary results from value-in-use tests which showed Baniaka’s fines and lump product could have a potentially high value in the blast furnace iron making process.
“We are pleased to have so quickly signed for potential offtake from Baniaka following the value-in-use tests and attracted strong interest from Minmetals and Changzhou,” he said.
“These first two agreements provide a point of validation to the value-in-use outcomes and our potential to deliver greener, African iron ore supply into Chinese markets.”
The Minmetals and Changzhou deals form part of Genmin’s strategy to build market awareness of potential iron ore products from Baniaka and provide a “first step” in offtake agreements to underpin the project’s development.