Bauxite Resources (BRL) yesterday singed an agreement with Chinese state-owned company Yankuang to establish a joint-venture alumina refinery in south-west Western Australia.
In order to earn a 50% interest the proposed refinery, Yankuang will pay for 75% of its development costs.
BRL will receive a 25% free carried interest and will fund the remaining 25% to bring its interest up to 50%, the company said in a statement.
The Chinese company will also provide 49% of the funds required to explore BRL’s Darling Range South tenements.
As per the agreement, both companies will work together to complete bankable feasibility study to confirm a refinery-grade bauxite resource of at least 150 million tonnes.
The partners have set a resource target of 300 million tonnes, BRL said.
As part of the deal, the Chinese company will pay $9.85 million to acquire 19.7 million BRL shares, subject to shareholder and regulatory approval.
The placement has been approved by the Foreign Investment Review Board. BRL managing director Daniel Tenardi said the agreement was a culmination of months of extensive negotiations.
“The proposed alumina joint venture is a significant value-adding project that will create many jobs and revenue for Western Australia,” he said.
“BRL and Yankuang will now proceed with the detailed engineering studies, environmental and regulatory approvals and resource evaluations necessary to bring to fruition a modern, world-class alumina producer.”