Sinosteel MECC selected by Northern Minerals as EPC Contractor for Browns Range Pilot Plant
A memorandum of understanding has been signed between Australian heavy rare earths developer Northern Minerals Limited (ASX:NTU) and Sinosteel Equipment & Engineering Co. Ltd. (Sinosteel MECC), for the delivery of the Browns Range Pilot Plant in northern Western Australia.
The Browns Range Pilot Plant is estimated to be worth approximately AU$60M, including pilot plant process facilities, mining and associated infrastructure and commissioning/working, commissioning and working capital requirements.
Sinosteel MECC is a subsidiary of Shenzen listed Sinosteel Engineering & Technology Co. Ltd. (Sinosteel ENTEC).
The non-binding deal sees Sinosteel MECC become the lead contractor on site with other Australian sub-contractor groups. Sinosteel will be responsible for the engineering, procurement and construction of the 60,000tpa Browns Range Pilot Plant.
NTU is still an early stage company and the Browns Range Piot Plant is yet to be constructed, so please exercise caution before making any investment decision and seek professional financial advice.
The pilot plant modules are planned to be built in China and then transported and installed at site in Australia.
NTU Managing Director, George Bauk and Sinosteel MECC General Manager, Wang Jian, sign the Memorandum of Understanding in Beijing.
As part of the agreement Sinosteel MECC has agreed to defer payments to the value of $12M for a 24 month period. Alternatively, Sinosteel MECC reserves the right to convert the deferred payment into ordinary NTU shares at a conversion price of the lower of 12c per share or the 20 day VWAP prior to actioning the right, which would need to occur within nine months of practical completion.
The conversion of the memorandum of understanding into an EPC contract with funding is subject to finance and a final investment decision by the NTU and Sinosteel MECC board, expected to be carried out mid-Q1 2017.
NTU has its projects located in near the northern Western Australian and Northern Territory border where the NTU is focused on finding the rate earth element dysprosium.
Dysprosium is an essential ingredient in the production of DyNdFeB magnets that are used in clean energy and high technology solutions.
With increased global demand for products that require dysprosium, supply of the mineral is becoming increasingly critical.