Western Australian mining company IMX Resources (IMX) has announced that it has signed two agreements with Chinese steel company Jilin Tonghua Iron and Steel Mining Co. Ltd (Tonghua Mining), the first regarding the sale of mine iron and copper ore from the first phase of IMX's Cairn Hill project in South Australia, while the second agreement involves the first right of purchase of a processing plant in China.
According to the first agreement, IMX will sell about 1.4 million mt of ore annually to Tonghua Mining for over a three-year period, with the target shipping specification averaging 55 percent iron and 0.43 percent copper, sold on a free-on-board basis (FOB).
IMX is to receive payment for both the contained iron and copper, with the prices based on international benchmarks and a 20 percent discount to allow for processing costs and losses.
The agreement is not to be renewed by any other mutual agreement beyond the three-year term.
As IMX's managing director Duncan McBain stated, mining and railing from the Cairn Hill project are expected to commence later this year, with the first shipment to take place in the first quarter of 2009.
The second agreement signed will give IMX the first right of purchase of a processing plant at Bayuquan in China's northeastern province of Liaoning at an independently assessed market price.