Auroux Resources and the Metallurgical Corporation of China (MCC) have reached a binding agreement to help finance the construction of the Balla Balla project near Port Hedland in Western Australia.
According to the terms of the agreement, MCC will provide Engineering, Procurement and Construction (EPC) services and assist in securing funding from a Chinese bank.
In a statement released yesterday, Aurox said MCC had already provided “a formal indication of interest from a leading Chinese banking institution.”
The Chinese company has estimated the project could be build for a total cost of $1.78 billion.
Aurox had estimated the project would cost $2 billion in an integrated feasibility study completed last year.
The company’s managing director Charles Schaus said the time spent on the project during the past two years was instrumental in attracting MCC.
“Aurox is delighted that the quality of Balla Balla has been recognised by a leading Chinese multinational,” he said.
“MCC has a strong track-record in delivering both quality EPC services and assisting with the arranging of debt finance.
“This also validates management’s view that the original cost estimates for the project could be significantly reduced.”
MCC has provided similar services to Sino Iron and Cape Lambert’s projects and is currently doing the same with Clive Palmer’s China First project in Queensland.
The Ball Balla project has an estimated resource base of 456 million tonnes and estimated reserves of 207 million tonnes.
Aurox has agreements in place to ship six million tonnes per annum out of Port Hedland from 2012.