IMX Resources yesterday extended its three-year sales contract with Tonghua Mining to carry on for the duration of the Cairn Hill mine’s working life.
The Phase 1 project at Cairn Hill is an iron ore, copper and gold operation capable of producing 1.7 million tonnes per annum.
The mine is operated by IMX subsidiary Termite Resources.
Under the terms of the original contract, Termite would supply Tonghua with 1.4 million tonnes each year for three years.
However, the Chinese company will now purchase the mine’s entire unprocessed run of mine ore output.
The ore will now be shipped out of Port Adelaide rather than Darwin, which has allowed the increased tonnage.
“The signing of the sales contract variation is another significant milestone as it converts the existing three-year contact into a life-of-mine contract for Cairn Hill Phase 1,” IMX managing director Duncan McBain said.
“All production from Phase 1 is now sold at prices related to international traded benchmark prices.”
According to the company, Tonghua will also receive a 20% discount of the benchmark prices to cover processing costs and losses.
The run of mine ore will be processed through a custom-built processing plant at Bayuquan in north-east China, which is being constructed by Tonghua Mining.