The Russian miner Petropavlovsk Group of Companies (Petropavlovsk) has announced that its iron ore unit IRC Ltd has signed a contract with China's China National Electric Equipment Corp (CNEEC) for the design and construction of the first stage of its mining operations at the Kimkan and Sutara (K&S) project located near the Chinese border, including a processing plant which will produce iron ore concentrate.
The total price payable to CNEEC under the contract is $400 million, of which $312 million will be payable in respect of the works relating to the design and construction of the iron ore processing and beneficiation plant, and approximately $88 million will be payable in respect of related infrastructure works.
IRC also said the contract is conditional upon obtaining a $340 million finance facility from the Industrial and Commercial Bank of China. Cash from IRC's share sale, which raised about $241 million in October, will cover the rest of the project costs.
The construction of the first stage of IRC's mining operations at K&S is expected to commence in January 2011 and is scheduled to be completed for commencement of initial operations and production in July 2013. The successful commissioning of the plant at IRC's K&S iron ore deposit will bring 3.22 million mt of ore concentrate per year on stream.