A state-owned Asian business has won the primary contract for a resource project worth more than $30 million in northwest Australia.
China-based Sinosteel Corporation recently secured the engineering, procurement and construction (EPC) contract for Northern Minerals’ Browns Range Pilot Plant, 160km south east of Halls Creek.
The deal involves Sinosteel taking responsibility for the EPC of the Browns Range Pilot Plant, which will have the capacity to produce 60,000 tonnes of heavy rare earths per annum. Sinosteel will be lead contractor and sub-contract Australian groups as required.
Under the contract Sinosteel will defer payments, representing 20 per cent of the contract value for a period of 24 months. Sinosteel has the right at its election, within nine months of practical completion, to convert the deferred payment amount into ordinary Northern Minerals shares at a conversion price of the lower of 15 cents per share or the 20-day VWAP before election.
The EPC contract follows a previous memorandum of understanding signed between both companies back in November 2016.
The project is subject to finance and and a final investment decision by the Northern Minerals Board, which is expected in the middle of the first quarter in 2017.
“The execution of the EPC contract is an important step with regards to securing finance for the Browns Range Pilot Plant. We are committed and focused towards the financial investment decision in mid-Q1 2017,” Northern Minerals managing director George Bank says.