Global iron ore trading house Sinosteel Corporation is exploring its second Pilbara iron ore joint venture, reaching agreement with BCI Minerals to evaluate formal arrangements over the Western Australian miner’s Buckland project.
BCI announced to the ASX that it had signed a memorandum of understanding with Sinosteel Australia over the Buckland project, located in the West Pilbara region.
Under the MOU, the companies will explore the possibility of formal marking and offtake agreements, provision of engineering services by Sinosteel Equipment and Engineering Co, as well as the formation of a possible joint venture.
Sinosteel will also facilitate discussions between BCI and potential funding partners under the arrangement.
If a joint venture is formed, it would be Sinosteel’s second iron ore joint venture in WA, adding to its highly-successful 30 year arrangement with Rio Tinto, the Channar Joint Venture.
Sinosteel and Rio Tinto recently ratified a second extension of the Channar JV, taking the arrangement past 2020.
However, with the Channar deposit reaching the end of its mine life, the BCI arrangement indicates Sinosteel is seeking to secure additional sources of supply.
The Buckland project is a comprehensive development proposal, comprising not only proposed mines, but also a new port at Cape Preston east.
BCI plans to develop a port with a capacity of 20 million tonnes per year, with 15Mtpa of that capacity to be taken up by iron ore from Buckland.
BCI is midway through a drilling program at the project’s Kumina deposit, which is expected to define a mineral resource by the end of March.
The company is also undertaking a study to integrate Kumina with the Bungaroo South deposit, which is expected to be complete by the end of June.
A final investment decision is targeted for early next year, with BCI seeking to secure a joint venture partner and offtake arrangements, as well as a contracting and procurement strategy, prior to the end of 2018.
BCI managing director Alwyn Vorster said formal arrangements with Sinosteel could be reached before the end of the year.
“Involving a credible and experienced partner such as Sinosteel provides momentum to the development of the Buckland project,” Mr Vorster said in a statement.
“Sinosteel has a long and successful history of partnering in Pilbara iron ore project and we look forward to working with them to ensure that potential joint venture, offtake, development and funding arrangements can be progressed in a mutually beneficial manner.”