Equatorial Resources' (ASX:EQX) has moved a step closer to fast-tracking production at its Mayoko-Moussondji iron project by applying for a mining licence with the Republic of Congo government.
The granting of the licence along with finalising commercial terms for rail and port access and the approval of the environmental study represent the key permits required to kick start production.
The application follows Equatorial completing feasibility and environmental studies which support an initial mine life of 23 years. Equatorial plans to produce 2mtpa of a premium quality 64.1% iron fines product, with low operating costs of just $41 per tonne and exceptionally low capital intensity. Total capex for the development is only $231mln which is well below its African peers.
Managing director and chief executive John Welborn told investors the latest steps were "the result of excellent work by our team and represents an important milestone for the company. We will now work with the government to secure the required approvals and continue to advance the project and progress opportunities for financing our project.”
A mining licence in the Republic of Congo is valid for 25 years and gives the holder an exclusive right to mine.
The good news for Equatorial as well as neighbouring iron ore hopefuls Exxaro and Glencore was the recent expansion program at the port of Pointe-Noire that will allow for larger tonnages to be exported and the loading of Panamax vessels which will greatly reduce shipping costs.
On the same day the licence application was lodged Equatorial signed a Convention Agreement with the government for the new Moussondji-Fer Est and Moussondji-Fer Ouest exploration licences.
The Convention was signed by Mr Welborn and the Minister of Mines and Geology, Mr Pierre Oba at a formal ceremony in Brazzaville - the capital of the Republic.
City broker GMP Securities noted after the news: "The key implication here is that the licencing progress should enable strategic investors to gain confidence, and ultimately lead to both a mining licence and strategic investment to start development of the project."