China MinMetals backs new WA mine

China MinMetals backs new WA mine

Thu, 11/01/2018 - 09:28
Drilling at Cyclone

Drilling operations at Diatreme Resources' Cyclone zircon project began in 2007. Photo: Diatreme Resources

China Minmetals has thrown its weight behind Western Australia’s next new mineral sands mine, with its subsidiary China ENFI Engineering formalising arrangements with Diatreme Resources to underpin the development of the Cyclone zircon project near the South Australian border.

Diatreme announced to the ASX that the companies had progressed a non-binding memorandum of understanding signed in September last year, with two formal agreements emerging.

Under the arrangements, ENFI will use its network among China’s state-owned-enterprises and banking sectors to assist in sourcing project investment, offtake agreements and debt funding.

ENFI and Diatreme also signed a consulting services agreement, with the Chinese engineering group to complete Cyclone zircon project’s definitive feasibility study, including project costings, engineering studies and implementation planning.

Diatreme chairman William Wang said the arrangement was not only significant for Diatreme, but also the wider Australian mineral sands industry.

“We are delighted to be working with a company of the size and expertise of ENFI as we advance our flagship project towards mining, for the benefit of all stakeholders.

China Minmetals is one of the country’s largest state-owned enterprises involved in mining services, with more than ¥1.6 trillion ($314 billion) in total assets.

ENFI is a wholly owned subsidiary of the Metallurgical Corporation of China, part of the China Minmetals Group.

Diatreme chief executive Neil McIntyre said the support of ENFI’s networks would be crucial in securing project partners for the cyclone project.

“The agreements with ENFI represent the final push forward for our Cyclone project, with the potential for first production by the end of the decade in an environment of rising prices and constrained supply,” Mr McIntyre said.

“We now have the right technical partner in place to deliver the right project at the right time, securing increased value for our loyal shareholders.”