Alderon signs off-take agreement with Glencore

Vancouver, British Columbia-based Canadian iron ore exploration company Alderon Resources Corporation has announced that it has signed an off-take agreement with a subsidiary of the international commodities producer and trader Glencore plc. According to the agreement, Glencore will acquire all of actual annual production from the Kami iron ore project that has not been allocated to Chinese steel producer Hebei Iron & Steel Group. Hebei Steel Group has the right to buy 60 percent of the annual production of the Kami project, located in Newfoundland, Canada.
 
Under the terms of the agreement, Glencore will be obligated to purchase, upon the commencement of commercial production, 40 percent of the actual annual production from the Kami project up to a maximum of 3.2 million mt of the first 8.0 million mt of iron ore concentrate produced annually at the Kami project. The term of the off-take agreement will continue until Kami LP has delivered 48.0 million mt of iron ore concentrate to Glencore, which is expected to be 15 years after the commencement of commercial production.
 
The Kami project has proven reserves of about 1 billion metric tons of iron ore, with an expected annual output of 8 million mt after the launch of production in 2015.