PERTH (miningweekly.com) - Iron-ore developer Centaurus Metals has signed a memorandum of understanding (MoU) with the state of Minas Gerais, as well as other key state departments, to facilitate the development of its flagship Jambreiro project, in Brazil.
The ASX-listed Centaurus said on Friday that the MoU would result in important fiscal concessions and the provision of project facilitation benefits, and recognised the significant social and economic benefits that would be generated by the A$136-million development.
The framework agreement, which Centaurus said was similar to the preferred project status that existed in most Australian states, was expected to deliver important tax concessions, resulting in significant capital and operating cost savings for the Jambreiro project.
“The development of Jambreiro will see Centraurus initially invest some A$136-million in the state of Minas Gerais, generating around 1 000 jobs during construction and 500 direct and indirect jobs during steady-state operations, as well as creating significant opportunities for training and skills development for local residents,” said Centaurus MD Darren Gordon.
He noted that the MoU demonstrated the strong commitment from the state government to facilitate the development of new resources projects, and to encourage and stimulate economic activity in the state.
Under its terms, Centaurus had committed to preferentially source local employees for the project and to using local suppliers and service providers, including engineering project and civil construction companies.
In exchange, Centaurus would be exempt from paying taxes on certain items of capital plant and equipment imported from abroad, as well as on goods acquired from other Brazilian states where no similar goods were produced in Minas Gerais.
The project would also be subject to preferential tax treatment for the iron-ore products to be produced and sold to local steel mills in the region.
The Jambreiro project would produce an estimated two-million tons of product a year, over a nine-year life-of-mine, based on a Joint Ore Reserves Committee-compliant resource of 125-million tons, grading 26.7% iron.