JOHANNESBURG (miningweekly.com) – Iron-ore developer Bellzone Mining announced on Monday that the China International Fund (CIF) has agreed to fund the entire infrastructure required for its Kalia project, in Guinea, in return for the right to the mine's production.

The Hong Kong investment company would fund the rail system (including rolling stock), bulk storage facilities, port, port loading facilities, port services and power development to produce and transport 50-million tons a year of iron-ore from the Kalia project.

The $2,7-billion infrastructure project would form the "first leg of developing a multiuser railway and port that is expected to open a number of opportunities for Guinea's mineral deposits", commented Bellzone MD Nik Zuks.

Bellzone and CIF signed a binding memorandum of understanding, which determines that a new company be established to build the 286-km rail and port facilities.

CIF would pay $40-million to Newco, which would be used to fund the feasibility study for the infrastructure required to transport and export production from the prospect. Bellzone would hold a 10% stake in the new company, and would have priority access to the use of the infrastructure.

"This agreement will significantly derisk Bellzone's implementation strategy by ensuring Bellzone's production value chain is secured from mine to customer," said Zuks.

The iron-ore developer also agreed to form a 50:50 joint venture with CIF to finance, develop, produce, export and sell iron-ore from the Forecariah permits, held by a subsidiary of the Chinese firm in south-west Guinea.

Guinea Mines and Geology Minister Mahmoud Thiam is quoted in a Bellzone statement as saying that the infrastructure would create the "strategic link" required to unlock the country's iron-ore potential.

"It puts two mines on line within four years instead of one and multiplies annual mining revenue tenfold in a short time. It's historical and transformational," Thiam said.

Bellzone is targeting first production from the Kalia mine in 2014, at 20-million tons a year, which would fund the ramp-up period to 50-million tons a year in 2018.

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