The Industrial Development Corporation has bought 10% of the Corridor Sands mining project in Mozambique, the Australian company WMC Resources, which owns the project, announced on Monday.
Andrew Michelmore, CEO of WMC Resources, said the IDC would pay an initial exercise price of US$0,1-million, with the balance of $9,9-million plus interest payable on the achievement of one of three milestones: the introduction of a major technical partner, the establishment of terms for project financing, or project
commitment.
Michelmore said the IDC’s decision to exercise its option to buy reflected the significance of the Corridor Sands project to the region as well as IDC’s confidence in the commercial strength of the project.
The Limpopo Corridor Sands project is the world’s largest known resource of ilmenite, an important feedstock for the titanium dioxide pigment industry.
Development cost of the project was expected to be about $500-million, said Michelmore. Production would be about 375 000 tons of titanium dioxide slag per annum, plus some 185 000 tons of high-purity pig-iron and other valuable by-products.
The IDC was a fully participating project partner and would contribute its 10% share of project pre-development, construction and commissioning costs, said Michelmore.
Construction would begin in the first half of 2005, he said. – Sapa