Zanaga Iron Ore Company Ltd Approval of Mining Licence and Mining Convention (2152P)
August 15 2014 - 2:00AM
UK Regulatory
TIDMZIOC
RNS Number : 2152P
Zanaga Iron Ore Company Ltd
15 August 2014
15 August 2014
Mining Licence and Mining Convention Approved for Zanaga Iron
Ore Project
Zanaga Iron Ore Company Limited ("ZIOC") (AIM:ZIOC) is pleased
to announce that the Zanaga Iron Ore Project (the "Zanaga
Project"), a joint venture with Glencore plc, has been granted a
Mining Licence, and signed a Mining Convention ("the Convention")
with the Government of the Republic of Congo ("RoC"). This follows
the submission of a mining licence application in May 2014, which
was supported by a positive Feasibility Study and a Social
Environmental Impact Assessment ("SEIA").
The Zanaga Project is underpinned by one of the largest iron ore
deposits in Africa, and is planned to be a low cost iron ore
operation, which will be developed in two stages.
Stage One consists of a 12Mtpa operation, with Stage Two
expanding the operation by a further 18Mtpa to produce a total
30Mtpa of high quality iron ore pellet feed product over a 30-year
mine life. Transportation to port will be via a 366km slurry
pipeline, where the product will be exported to the global
sea-borne iron ore market.
The Project is expected to create widespread employment
opportunities, develop substantial infrastructure, and
significantly increase the GDP of the RoC economy, thereby
supporting the country's objective of diversifying its economy and
developing a mining sector that is sustainable over the
long-term.
The Convention covers the proposed staged development of the
Zanaga Project and sets out the fiscal and legal terms with respect
to the construction and operation of the Zanaga Project pursuant to
its Mining Licence. These are significant milestones as the Project
advances toward development.
Clifford Elphick, Non-Executive Chairman of ZIOC, commented: "I
am delighted that the Zanaga Project has received both its Mining
Licence and Mining Convention. This is a demonstration of the
Government of the Republic of Congo's firm commitment to developing
the country's mining sector and testament to the Project's strong
stakeholder relations, which have been established over the past
six years.
The development of this world class iron ore project will have a
significant beneficial impact on the RoC, both at the grassroots
level around the Project site, as well as more broadly on the
country's infrastructure and economy.
With the receipt of the Mining Licence, and confirmation of the
Project's fiscal regime with the Mining Convention, the Zanaga
Project is well positioned to advance through to the next stage of
financing discussions, on which the Company plans to update
shareholders in the coming months."
Mining Licence
The issue of the Mining Licence, following a Presidential Decree
dated 12 August 2014, follows the submission of a mining licence
application in May 2014, which was supported by a positive
Feasibility Study and SEIA (announced on 8 May 2014).
The Mining Licence covers the proposed staged development of the
Project, as described in the Feasibility Study. Under the Republic
of Congo Mining Code, the holder of a mining licence has the
exclusive right to mine the relevant minerals within the boundaries
of the licence area for an initial period of 25 years. The mining
licence may be renewed for further periods of 15 years each subject
to further application.
Key terms of the Convention
Duration of Mining Licence
-- 25-year operating licence effective from the issue of the
Mining Licence (August 2014) and renewable for successive terms of
15 years and in accordance with the Mining Code.
Royalties and Tax
-- A mining royalty of 3%
-- Identification of the specific taxes which will apply to the Project
-- A 5 year tax holiday following the construction phase and a corporate tax rate of 15%
Customs
-- Agreement of the customs regime which will apply to the
Project, including exemptions from import duties and taxes on plant
and equipment imported temporarily for project construction
Permitting
-- Agreement of the permitting regime which will apply to the Project
Land
-- Agreement of the process by which land will be made available for development of the project
State participation
-- The RoC will receive a non-dilutory 10% stake in the Mining Company
The next step is for the Congolese Parliament to approve the
Convention as a law. The agreed timescale is to complete this
process by 31 December 2014
For further information please contact:
Zanaga Iron Ore
Corporate Development and Andrew Trahar
Investor Relations Manager +44 20 7399 1105
Liberum Capital Limited Simon Atkinson
Nominated Adviser, Financial and Christopher Britton
Adviser and Corporate Broker +44 20 3100 2000
Bell Pottinger Daniel Thole
Financial PR and Marianna Bowes
+44 20 7861 3232
About us:
Zanaga Iron Ore Company Limited (AIM ticker: ZIOC) is the owner
of 50% less one share in the Zanaga Iron Ore Project based in the
Republic of Congo (Congo Brazzaville) through its joint venture
partnership with Glencore plc. The Zanaga Iron Ore Project is one
of the largest iron ore deposits in Africa and has the potential to
become a world-class iron ore producer.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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