Cameroon+Strategic+Minerals

=A Major Chinese Mining Company Likely To Invest In The Development Of The Mbalam (Iron Ore) Project In Mbarga, Cameroon In The Next Five Years=

Executive Summary:
China's likely to focus on investments in Cameroon's iron ore. A major Chinese mining company is likely to invest in the development of the Mbalam Iron Ore project in the next five years, located in Mbarga, Cameroon, which is along the border of The Republic Of Congo. After the Hanlong Mining Group failed to takeover Australia's Sundance Resources Ltd. (SDL) for the developing of the Mbalam iron ore project earlier in 2013, SDL has been looking to attain support elsewhere. Before the deal was cancelled, the Chinese Government ordered for Hanlong to get help from a major Chinese Company, this discussion never reached a conclusion due to the arrest of Hanlong's CEO. SDL has shared that other Chinese investors have shown interest in the project since the negotiations failed with Hanlong. China's Sinosteel in 2012 announced they planned to spend USD 600 million at the Lobe iron ore site and gain a production license. Economic growth of China is forecast to expand 8.1 percent in 2013 and 8 percent in 2014. Therefore, China has a need to increase foreign supplies of metals and minerals.

Discussion:
According to the median estimate of analysts compiled by Bloomberg, China has increase pressure to acquire foreign supplies of metals and minerals, which is being driven by its economic growth that will continue to outstrip the world. China will expand 8.1 percent in 2013 and 8 percent in 2014, after the weakest annual growth in 13 years in 2012. Also in 2012, China's Sinosteel announced they planned to spend USD 600 million at the Lobe iron ore site and gain a production license.

A Chinese company called Sichuan Hanlong Group failed at its USD 1.2 billion bid for Australia's Sundance Resosurces Ltd. (SDL) for the developing the Mbalam iron ore project that straddles the border of Cameroon and the Republic of Congo, in Mbargo. The project has a calculated production of 35 million tons of annual iron ore. The takeover of SDL was halted because of Hanlong's missed payment deadlines, interjections from China, and a 3 week trading standstill. The Chinese government ordered Hanlong to line up a major Chinese company to help it develop the Mbalam project, but before an agreement could be reached the CEO of Hanglong, Lui Han, was detained for harboring his younger brother, who was a suspect in a murder case. SDL, in a statement to Australia's stock exchange after the market closed, said that it was now in discussions with other parties, both in China and elsewhere, after Hanlong's bid collapsed. Several other Chinese investors are thought to be interested in SDL's Mbalam iron ore project, with the board working on alternative plans to secure a "white knight suitor".  Currently, International Mining & Infrastructure Corporation(IMIC) is looking at how it will develop the Nkout iron ore deposit in Cameroon as the USD 200 million takeover of Afferro Mining, the project’s current owner, nears completion. It already has preliminary off take deals with the Chinese as well as interest from the People’s Republic to help it develop a mine and build the rail route needed to get ore to the coast. Mr Haresh Kanabar chairman of IMIC stated, "We are close to completing the acquisition of Afferro Mining which will transform IMIC into the owner of high quality iron ore assets in Cameroon, including the Nkout Iron Ore Project. During the coming months we expect to finalize our plans for the development of Nkout whilst also beginning the implementation of the infrastructure solution to transport iron ore from Nkout to the coast”. Also Mr Kanabar said, "We are highly fortunate in already having contractual relationships with some of China's largest companies in the steel supply chain. We look forward to working with them to deliver the infrastructure and off-take solution for Nkout whilst also contributing to social and economic development in Cameroon”.

** Analytic Confidence: **
Analytic confidence is medium. Source reliability ranges from medium to high. There is no conflict between sources. The analyst had low expertise on the subject, worked alone while also collaborating with a group, and did not use a structured analytic method. The subject is moderately complex and the deadline was moderately easy to meet. 
 * Analyst:** RoseAnna Wright