• Huge undeveloped iron ore resource
  • Significant work already completed
  • Major partners involved in infrastructure plans

 

What does the company do?

Zanaga Iron Ore Co Ltd (ZOIC) is an iron ore development company run by seasoned mining industry professionals, including Clifford Elphick, the founder of Gem Diamonds Ltd (LON:GEMD).

What does the company own?

Zanaga’s principal asset is the Zanaga iron ore project located in the south west of the Republic of Congo, which it owns in joint venture with Glencore PLC (LON:GLEN).

Several different production scenarios remain under consideration for the Zanaga project, including an option to mine as much as 30mln tonnes of ore per year. That scenario would involve a two-stage development, with initial production set at 12mln tonnes per year, and a further 18mln tonnes to be added later, once cash flow starts coming in.

There’s also potential for a direct shipping ore operation, mining at the rate of two million tonnes per year. This could lead to early cashflow, and would involve lower up-front costs.

How will development be funded?

With potential capital expenditures of upwards of US$2bn, finding funds for development will be key to Zanaga in the months and years ahead. As things stand, the company has helped put in place a framework agreement for infrastructure development with the major players in the area, specifically Glencore and the Chinese Overseas Infrastructure Development and Investment Corporation (COIDIC).

The parties intend to develop a joint initiative to introduce funding partners for the Zanaga Project and its related infrastructure, with the aim of securing debt and equity financing.

What does the chairman say?

“We are delighted to announce that a process is underway with China Overseas Infrastructure Development and Investment Corporation Limited to advance the Zanaga iron ore project,” says chairman Clifford Elphick.

“COIDIC is undertaking a transformational initiative by developing the Pointe Noire Special Economic Zone, which has the potential to provide critical infrastructure to the Republic of Congo. The Zanaga project team is impressed with the extensive experience that COIDIC and its shareholders have in developing large scale infrastructure projects in Africa including railways, process plants, power plants, ports, and trans-shipping operations.

The discussions to be undertaken with COIDIC could potentially substantially improve the development prospects of both the early production project as well as the 30mln tonnes per year staged development project through debt and equity financing solutions, accelerated development timeframes for key logistics infrastructure, and collaboration on power and port alternatives associated with the Zanaga project.”