Iron ore miner Gindalbie Metals Ltd
(ASX:GBG) says it has finalised a long-term offtake contract with joint venture partner, Ansteel, covering the life-of-mine production from the Karara Iron Ore Project in Western Australia.
Gindalbie says the agreement between the joint venture company Karara Mining Ltd and Angang Group International Trade Corporation, valued at more than US$65 billion over the life of the project, marks another key milestone for the Karara project.
The company says stage one production, based on a rate of 8 million tonnes per annum, is scheduled to be commissioned in late 2011, however has the potential to produce over 30 million tonnes per annum for a life of 30 years.
Gindalbie says based on the 2009 benchmark iron ore fines price and stage one production rate, the offtake agreement is worth around US$580 million a year increasing to more than US$2.1 billion a year at the project’s potential production rate.
The first shipment under the new magnetite offtake agreement is expected to occur in the second half of 2011 with commissioning of the Karara project.
Gindalbie Metals posted profit of $26.22 million in the 12 months to June 30, 2009.
