Genmin strikes MoU with Hunan Valin for potential Baniaka Green iron ore product offtake

African iron ore producer Genmin (ASX:GEN) has signed an offtake memorandum of understanding (MoU) with Valin Hongkong International Trade, a subsidiary of Chinese majority state-owned Hunan Valin Steel (SHE:000932).  

Genmin, which has an $81.27 million market capitalisation, says the non-binding MoU has been signed with Hunan for the sale and delivery of 2.4 million tonnes per annum (Mtpa) of Baniaka Green iron ore products from its wholly owned Baniaka Iron Ore Project in Gabon over a 2-year term. 

Genmin reports it has also extended its current MoUs with China’s Minmetals and Jianlong Group, which were signed for the sale and delivery of 1.5Mtpa of Baniaka Green fines and 0.5Mtpa of lump products for a term of 3 and 2 years, respectively. 

As a result, Genmin’s potential offtake quantity, inclusive of the Hunan Valin MoU, now stands at 15Mt of Baniaka Green iron ore products. The product demand is currently estimated at 71% fines, 24% lump, and 5% pellet feed. 

The key terms of the MoU with Hunan include the utilisation of all reasonable endeavours to enter into a legally binding offtake agreement by 31 December 2024. 

Any legally binding agreement will be subject to standard conditions precedent for an offtake agreement, including receipt of all required approvals from government authorities and the start of commercial production at Baniaka.   

Speaking on the MoU, Genmin Chief Executive Officer (CEO) and Managing Director Joe Ariti says: “We are privileged to have signed this MoU with Hunan Valin, a group of substantial balance sheet capacity that has shown long-term loyalty through the purchase of iron ore from FMG. We look forward to developing a similarly strong and long-term relationship with Hunan Valin. 

We are privileged to have signed this MoU with Hunan Valin”

With the signing of this MoU, Genmin now has potential sales of approximately 15 million tonnes of Baniaka Green iron ore products to be balanced over its production profile of 5 million tonnes per annum, which nominally provides sales coverage for the first 3 years of operations.”

Genmin is an ASX-listed African iron ore producer with a pipeline of projects located within the Republic of Gabon, west Central Africa. 

The company’s flagship Baniaka project is situated in southeast Gabon and provides access to an emerging iron ore hub near the Haut-Ogooué provincial capital city of Franceville. In total, the company holds an ‘extensive’ footprint of about 2,445km-square in Gabon. 

Hunan Valin is a Shenzhen Stock Exchange-listed company ranked within the top 15 global crude steel producers, with more than 23,000 employees.

Write to Adam Drought at Mining.com.au

Images: Genmin Ltd
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Written By Adam Drought
Born and raised in the UK, Adam is a sports fanatic with an interest in Rugby League and UFC/MMA. When not training in Muay Thai and Brazilian Jiu Jitsu, Adam attends Griffith University where he is completing his final year of a Communication & Journalism degree.