Zanaga Co Ltd (AIM:ZIOC) earlier this week announced a major milestone for its project in the Republic of Congo. The company signed a memorandum of understanding with Arise Integrated Industrial Platforms to develop a port site critical for the export of high-grade iron ore.
Zanaga highlighted that the partnership with Arise addresses a long-standing bottleneck in the project’s progress. Arise, known for its expertise in managing major West African ports, will finance and operate essential facilities, including the shorefront, breakwater, and jetty. The company said it will oversee concentrate handling operations, while Arise will provide services such as roads, power, and water.
The port site, regarded as one of the best in West Africa, offers logistical advantages with a 1.7km distance to deep water. This makes it a key asset for Zanaga as it prepares to become one of the largest iron ore producers globally, targeting an output of 30.00 million tonnes per annum in phase two of the project.
Proactive: You’ve announced another big milestone for the project in the Republic of Congo. That’s a memorandum of understanding with Arise Integrated Industrial Platforms. Take us through the partnership and how it’s going to take the Zanaga iron ore project forward?
Andrew Trahar: So the history of this port site is that this port site was previously going to be developed by another group in about 2012. The project wasn’t progressed, and Arise have stepped in. Arise is one of the operators of some of the largest port sites on the coast of West Africa, a highly regarded company that has built, financed, and operates these large port sites. They are currently shipping bulk minerals, which is absolutely perfect for us as a partner because we are an iron ore project. They are very experienced in handling the types of materials that we will need to be exporting from our project.
The port site is regarded as the best port site on the coast of West Africa. It’s only 1.7km to 20-meter-deep water, whereas other projects on the coast of West Africa have to deal with something like 10 to 15km in certain instances, a huge challenge. So it’s a fantastic location. It’s currently being occupied by Arise and being allocated space to various industries.
We have space reserved for us for our project, and we will be taking care of the concentrate handling facilities within the port site. Arise will be tasked with financing and operating the shorefront, the breakwater, the jetty, the port, those port facilities as well as providing services to us: water, roads, power.
So they’re an excellent partner with fantastic execution capabilities. This step for us is a major de-risking step as we engage our strategic partners. That is a process that we have announced previously to the markets, that we are engaging strategic partners to develop the project, bring it into construction, and finance it. But this port-side bottleneck was something that lingered over the project for a long time and had created a lot of uncertainty in the past. That uncertainty is now removed.
As a reminder, this project would produce one of the largest quantities of iron ore in the market. It will be one of the largest producers of iron ore at 30 million tonnes per annum in its phase two expansion. It will also produce one of the highest quality products on the market: 66% iron in stage one, and 68.5% iron in stage two. That is a very sweet product and a very desirable product, especially as the steel industry shifts toward demand for green steel and lower coal usage for higher quality iron ore products.
We are very, very well-positioned now to move forward on a number of execution milestones that we’ve lined up in the early part of next year. Our shareholders have been very patient with us, and we’re very grateful for that. But we now have a string of announcements planned for the early part of next year that we are going to be hitting milestones on and getting into the public domain for our shareholders.
Proactive: Andrew, maybe tell us about some of those milestones that you are targeting for next year as you take the project forward.
Andrew Trahar: Some of them we have already indicated to the market, such as power agreements, for example. The strategic partner process, in particular, has been a major focus for the company and a huge workstream for us. Once again, de-risking milestones such as this port definition and this port agreement and partnership is very important for us.
Arise is backed by major financial institutions with strong intent on supporting infrastructure and resource development in Africa. Together, we are now collaborating on this initiative of financing both projects and de-risking the port site with other users that will come in and make it as big and significant as it should be for the country. So, very exciting for us.
