Australian iron ore miner IronClad Mining Limited has announced that it has signed sales and marketing contracts with Singapore-based marketing and trading company OM Materials (S) Pte Ltd (OMS), whereby OMS will purchase the first two years' production of iron ore from the company's Wilcherry Hill project in South Australia.
OMS is a wholly-owned subsidiary of Australian Securities Exchange (ASX)-listed OM Holdings Limited, which has established mining, processing, marketing and distribution capabilities centered on the supply of steelmaking raw materials to the Chinese market.
According to a company statement, IronClad has also appointed OMS as its exclusive marketing agent in China for Wilcherry Hill iron ore for Chinese steel mills, assisting the establishment of the IronClad brand name in China.
Commenting on the development, IronClad's executive chairman Ian Finch said, "The contracts ensure the sale of all iron ore produced during the planned Stage 1 Direct Shipping Ore (DSO) mining operation due to start in the first quarter of calendar 2011. Having one dedicated and exclusive marketing and sales channel for our Wilcherry Hill iron ore will enable IronClad to establish a pattern of regular and consistent shipments which will even out production, logistics and cash flows."
As SteelOrbis previously reported, development of the Wilcherry Hill iron ore project, 120 kilometers west of Whyalla, is scheduled to begin production with stage 1 commencing in the first quarter of calendar 2011. IronClad is currently finalizing a definitive feasibility study for the production of up to 2 million mt a year to start production.