PERTH (miningweekly.com) – Iron-ore developer Sundance Resources has signed a rail deal with a Chinese firm for its flagship Mbalam project, on the border of Cameroon and Congo.

Sundance said in a statement on Wednesday that the memorandum of understanding (MoU) with China-Africa Construction (CAC) would establish the scope, cost and delivery programme for the track and rolling stock needed to support a 35-million ton a year iron-ore mine.

“The MoU recognises that the mine rail project will be integral with the main project itself and the Lolabe port development project. The MoU also recognises that the rail, mine and port projects are subject to a range of conditions precedent, including government approvals, funding and title requirements for the rail corridor and other assets,” Sundance chairperson George Jones noted.

At the conclusion of the work covered by the MoU, the parties could enter into a delivery contract for the mine rail project, however, neither party was bound to do this if it was not deemed prudent.

“This is a key milestone for the Mbalam project,” said Jones.

CAC was established earlier this year to consolidate the activities of its parent company, China Railway Construction Corporation in Africa.

Sundance was planning to complete its definitive feasibility study for the Mbalam project in 2010, with project construction to start in 2011.

The project has a total indicated and inferred resource of direct shipping ore (DSO) haematite of 415-million tons, at 61,6% iron.

The resource could support a 35-million-ton a year production mine, for more than 25 years, comprising DSO production for at least the first ten years.

The Mbalam project consists of iron-ore tenements in both Cameroon and the Republic of Congo.