Dubai-Oman-London JV to build $60m metal project
MoU signed to construct and operate roasting facility in city of Sohar
A joint venture between a London-based metal manufacturer and two GCC investment bodies based in Dubai and Oman is set to build a $60m (OMR 23m) antimony roasting facility in the Omani city of Sohar following the signing of a memorandum of understanding (MoU) between the parties.
UK-based integrated antimony development company Tri-Star Resources, Dubai Transport Co subsidiary Castell Investments Ltd, and Oman Investment Fund (OIF) signed the non-binding agreement which established Strategic & Precious Metals Processing LLC (SPMP), according to a statement on Tri-Star Resources website.
SPMP is expected to build a 20,000 tonnes per annum nameplate capacity antimony metal and tri-oxide manufacturing facility on a leased plot of 22-hectare plot in Freezone Sohar, where the company is to be based.
Final documentation, approvals and financing package are in the process of being completed by the JV parties so that site preparation work and construction can commence in the first quarter of 2014.
The roaster construction is expected to take 12 months, with a further three months for commissioning. The first full year of operation is expected to be 2016, the release added.
Construction of the facility will represent the first phase of Tri-Star’s proposed metalprocessing activities, with the JV parties anticipating the extension of their partnership to a second phase processing facility in Freezone Sohar, which envisages using Tri-Star’s cleanroasting technology to treat refractory gold-sulphide concentrates.
Commenting on the signing of the MoU, Emin Eyi, managing director of Tri-Star, said: “We are impressed with the progress made by Freezone Sohar in becoming a metals and minerals processing hub in the Middle East. Our proposed projects are well suited to the future strategy of Freezone Sohar. Once fully operational they will be significant contributors to local employment and the economic development of the metals processing sector in Oman.
Tri-Star Resources is set to own and control 40% of SPMP under the terms of the MoU, with 40% held by OIF and 20% by Castell, with final agreements between the JV parties expected to be completed in November.
The funding structure for the total capital cost of $60m is expected to include $30m of project finance to be raised from local and regional banks.
Expected to make up the balance of the capital cost of $30m is a mezzanine loan of $10m from OIF with the balance of $20m to be provided as equity by the JV parties, pro rata to their ownership interests, over the construction phase of the project.
Tri-Star said that the project has received a preliminary green light statement from the sultanate’s Ministry of Environment and Climate Affairs (MECA), confirming that it has no objection to the company proceeding with the environmental permit procedure for the antimony processing facility.
A full environmental impact assessment is now being prepared by JV parties for the roaster and is expected to be completed and submitted to MECA by the end of December.