JOHANNESBURG (miningweekly.com) – ASX-listed Carpentaria has signed a nonbinding letter of intent (LOI) with global commodities trading group Gunvor for the purchase of up to one-million tonnes a year from its flagship Hawson iron-ore project in New South Wales.
The company said on Monday that the latest LOI meant that half of the initial planned production from Hawsons had been assigned to high-value direct reduction (DR) markets in the Middle East and to blast furnace markets in China and the Asia-Pacific.
The LOI with Gunvor targeted supply to smaller Chinese mills and followed recent LOIs with Japanese group Mitsubishi and Middle Eastern DR pellet maker Bahrain Steel.
Under the LOI, Carpentaria and Gunvor would aim to develop a binding offtake agreement, initially for a ten-year term, with first supply targeted in 2020.
“The addition of this LOI, our first focused on the Chinese market, demonstrates the clear commercial advantages that Hawsons product quality and the location close to key markets provide. It also demonstrates that Hawsons is ideally suited to meet international demand for high-grade and DR pellet feed and pellets that is forecast to increase over time as the global steel industry shifts focus to higher productivity and cleaner, more efficient operations,” commented Carpentaria MD Quentin Hill.
The Hawsons project is targeting production of between 10-million and 20-million tonnes a year of “supergrade” product (over 70% iron).