SmallCaps: Genmin inks third offtake deal for Baniaka iron ore

West Africa-focused explorer and developer Genmin (ASX: GEN) has inked a third offtake deal for iron ore products from its wholly-owned Baniaka iron ore project in the Republic of Gabon.

A non-binding memorandum of understanding (MoU) has been signed with Jianlong Group, China’s second largest privately owned and vertically integrated iron and steel enterprise.

This follows last month’s three-year deals signed with other Chinese customers, China Minmetals Corporation and Changzhou Dongfang Special Steel (CDSS).

Under the MoU with Jianlong, Genmin will sell and deliver 1.5 million tonnes per annum of fines product and 500,000tpa of lump product from Baniaka over a two-year term.

The three non-binding deals bring the project’s total iron ore offtake to 16Mt, comprising 12Mt of fines product and 4Mt of lump product.

A ‘future facing’ steel producer
In 2020, Jianlong was ranked eighth in global crude steel production, and fifth inside China, with an annual production of 36.5Mt.

Last year, the company targeted crude steel production of more than 40Mt.

In the first half of 2021, Jianlong commissioned China’s first hydrogen-based steelmaking production line, which uses hydrogen instead of coking coal and blast furnace technology to produce iron from iron ore. The company is aiming to completely replace carbon as a reduction agent in iron making.

Genmin managing director and chief executive officer Joe Ariti said the company is excited about partnering with the “future facing, global top 10 crude steel producer”.

“While the initial project execution plan for Baniaka is to mine and export iron ore, we look forward to potentially exploring future commercial possibilities with Jianlong to decarbonise the steelmaking value chain by utilising on-site hydrogen iron making,” he said.

“Baniaka ore processing and supporting infrastructure is planned to be powered from the nearby Grand Poubara hydro-electric plant by renewable energy, which is a key component to produce green hydrogen.”

Genmin is currently undertaking a preliminary feasibility study on its Baniaka project, assessing the development plan and economics for a bulk, open pit mining operation with a proposed initial output of 5Mtpa of iron ore products and subsequent expansion to 10Mtpa.