Subiaco-based Aurox Resources Ltd has revised a long-term sales agreement with China-based RockCheck Steel Group Co Ltd, signing on to sell up to 10 million tonnes of iron ore to the company by 2014.
Aurox will immediately commence 'ramp up scheduling' of its proposed 100 per cent-owned West Pilbara Balla Balla iron ore project, the company has announced.
The full text of a company announcement is pasted below
Aurox Resources Limited announces the signing of a revised long term Sales Agreement with RockCheck Steel Group Co. Ltd ("RockCheck Steel").
The enhanced agreement calls for increased iron ore deliveries to RockCheck Steel rising from 3 to 7 million tonnes per annum within 5 years of commissioning the Balla Balla operation.
The new RockCheck contract complements the current 3 million tonne per annum sales agreement with Chengde Iron & Steel Group which will uplift total annual production and sales of Balla Balla iron concentrate to 10 million tonnes by 2014.
Aurox will immediately commence 'ramp up scheduling' of its 100% owned West Pilbara Balla Balla iron ore project.
Commenting, the Managing Director of Aurox Resources, Mr Charles Schaus, said:
"The fact that Aurox will supply the feed that underpins growth and longevity at RockCheck's Tianjin based steel operations, is undeniable evidence of the developing cooperation and synergies between our two companies"
"The phenomenal success of our marketing efforts demonstrates the confidence our customers have in the Company's ability to independently develop the low cost Balla Balla project into one of the regions most profitable and sustainable operations."
Based on the 2007 Hamersley fines benchmark price of US80.42 cents per dry metric tonne unit, revenue from sales of Balla Balla concentrate are expected to exceed AUD7.0 billion over the life of the two contracts. However with iron ore prices expected to increase by 20 to 30 percent next year, the value of the sales contracts could be as high as AUD9.0 billion.
