WINDHOEK, Namibia Alufer Mining Ltd. has reached an agreement with Chinas Hongfan Industries for the development of its Bel Air bauxite project in Guinea in a deal that could also result in a 5-million-tonne-per-year bauxite offtake arrangement.
Alufer, a mineral exploration company with significant interests in the Republic of Guinea, said Bel Air is expected to come onstream in 2015 with bauxite production of 10 million tonnes annually.
It will cost $370 million to bring the project into commercial production, and the junior miner says a memorandum of understanding signed with Hongfan forms part of the financing needs for the project.
Hongfan operates a number of aluminum and alumina refineries in China, and has entered into long-term offtake agreements with other bauxite companies, Alufer said.
"Alufers agreement with Hongfan establishes a relationship with a significant partner in the dominant Chinese bauxite import market," Alufer chief executive officer Danny Keating said. "The (memorandum) represents a major milestone in the growth of the company, and is expected to form an integral part of the financing required for the projects initial development capital."
The resource estimate at its Bel Air project has also increased by 80 percent, the junior miner said.
A version of this article was first published by AMM sister publication Metal Bulletin.