Melbourne, Australia — 05 June 2012 – Chinese mining giant Hanlong Mining has cleared one of three key hurdles to its long-delayed US$1.3 billion takeover of Australia’s Sundance Resources, agreeing on key terms with Cameroon for development of the Mbalam iron ore project.
Reuters reports that to go ahead with the Sundance bid, Hanlong also needs to secure approval from Australia’s Foreign Investment Review Board by 30 June, and to line up funding from China Development Bank by 31 August, which is seen as the biggest challenge.
Hanlong is targeting Sundance for its US$4.7 billion Mbalam iron ore project on the border of Congo and Cameroon, a resource vital to helping China ease its dependence on Australia and Brazil for iron ore.
Despite China’s desire to tap new sources of iron ore in Africa, China Development Bank has so far failed to give its blessing to Hanlong’s A$1.34 billion bid, first announced last July.
The bank has said it was waiting for Congo and Cameroon to seal mining agreements, now in hand, and waiting for approval from Australia, now also expected to come through.
“We now look forward to finalising the remaining elements of the agreement and paving the way for the people of the republics of Cameroon and Congo to reap the benefits of this world-class project,” Sundance chairman George Jones said here in a statement.
At least one Chinese source has said China Development Bank is nervous about making big investments in the current uncertain global environment, especially when it involves a privately owned Chinese company.
Source: Reuters Africa. For more information, click here.