Mbalam, Nabeba infrastructure agreements signed

The EPC agreements with Cameroon and Congo on the iron ore projects will pave the way for reflection on field work.

After signing the Engineering, Procurement and Construction (EPC) contract for the construction of ports and rail infrastructure for the Mbalam-Nabeba Iron Ore Project with Cameroon on June 5 in Yaounde, Sundance Resources and the Portuguese constructor, Mota-Engils, penned a similar agreement with Congo on June 18.


According to a release on the website of the Australian firm, “Sundance Resources Limited confirms that its subsidiary Congo Iron SA and Mota?Engil Africa have signed the EPC contract for the 52-km section of the Nabeba?Mbalam railway line to be built in the Republic of Congo (Congo?Brazzaville) which will connect the Nabeba mine to the Cameroon railway.”


The release signed by Giulio Casello, CEO and Managing Director Sundance Resources Limited notes that, “the signing of both contracts for Cameroon and Congo formalises the appointment of Mota?Engil Africa as the EPC contractor to undertake the work for both the port and rail infrastructure. The rail component of the contract encompasses the entire 580-kilometres of railway to be built in both Congo and Cameroon.”


The role of Mota-Engil consists in providing a detailed design, construction, testing and commissioning of the 510-km railway from the Mbarga mine in Cameroon to the Mineral Terminal Facility at Lolabe on the west coast of Cameroon, the 70-km rail spur line from the Nabeba Mine in the Republic of Congo (Congo-Brazzaville) to the Cameroon railway; and a 35-Mtpa deep water Mineral Terminal Facility, including stockyards, capable of loading ‘China-max’ vessels.

Standard Bank from South Africa was also chosen as the financial partner to secure financing over 6-9 months following the signature of the Railway Agreement and the Mineral Terminal Agreement. It will lead the syndicate of financial institutions that intend to support the project. Sundance sources say discussions are well advanced with a wide variety of potential funding partners.


Information indicates that Export Credit Agencies, Development Funds and Commercial Banks have already expressed interest in providing debt funding. Sundance, Standard Bank and Mota-Engil Africa are also advancing plans for an alternative funding strategy based on an Build, Own Operate and Transfer model for port and rail infrastructure.


According to Cameroon’s Lead Financial Adviser for the project, Serge Yanic Nana, President of Financia Capital, the Mbalam project is more an infrastructure than a mining project because more than 80 percent of the capital expenditures will be allocated to finance infrastructure.


Meanwhile, the General Manager of Mota-Engils, Gilberto Rodriguez, said after the Yaounde event that while waiting for real work to begin next year, design, surveying and geotechnical works will take off this year.