Black Iron has signed a memorandum of understanding (MOU) with a subsidiary of Glencore to finance the construction of the Shymanivske iron ore project.
The Shymanivske Project is located at Kryvyi Rih city in Ukraine, a highly developed iron ore mining region with well-established infrastructure located away from the conflict zones.
As per the MOU, Glencore is expected to make an investment for funding the project in exchange for securing the offtake of up to the full phase one planned annual production of four million tons with the terms and amount still to be negotiated.
Black Iron and Glencore will also partner in arranging the balance funds required for construct of the project. Besides, the MoU enables the allocation of offtake to other equity investors depending on the investment terms offered equal or greater than Glencore’s proposal.
Black Iron said that it is currently discussing with other companies that are interested in securing supply of the high-grade iron ore concentrate expected to be produced from the project in exchange for providing construction financing.
Black Iron CEO Matt Simpson said: “I am excited to welcome Glencore as an offtake investor for construction of the Shymanivske Project as well as their agreement to work with us to help secure additional financing. Glencore’s involvement significantly strengthens our capability and draws on their extensive international network, experience and market knowledge.”
Black Iron management is focused on the two main areas for the project, securing the complete finance package and the required surface rights.
The company is continuing the debt finance discussions with international finance institutions and European based banks.
The project’s proximity and access to major infrastructure including paved roads, railway, power lines and port along with highly skilled low-cost labour force is anticipated to allow a phased development at significantly reduced initial capital requirements and operating costs.
Black Iron intends to produce a 68% iron content pellet feed concentrate with very low levels of trace elements that can be used to produce high-quality iron ore blast furnace pellets or premium direct reduction grade pellets.