Black Iron Inc., a firm specializing in the development of iron ore projects, has taken a significant step in its expansion strategy by signing a binding agreement with Anglo American. The latter is one of the world’s leading mining multinationals and has committed to making an investment in royalties that includes an initial disbursement of four million dollars, along with purchasing rights and possible contributions for the future construction of the Shymanivske iron ore project, located in Kryvyi Rih, Ukraine.
The development of the Shymanivske project will be carried out in two stages. The first phase involves an annual production of four million tons, which will be doubled in the second phase to reach eight million tons per year. According to the terms of the agreement, Anglo American will provide the funds in two parts, starting with 2.6 million dollars. In return, they will receive a royalty of 1.0% if the iron ore price is below $120 per ton, or 1.5% if it exceeds this value, applicable to the first 60 million tons produced.
Additionally, Black Iron retains the right to repurchase this royalty under previously agreed economic conditions, while Anglo American will have purchasing rights for a significant percentage of the production in phase 1. The multinational could also have a first offer right to finance a large portion of the construction costs of phases 1 and 2, thus ensuring all purchase rights in both stages.
Matt Simpson, CEO of Black Iron, expressed his enthusiasm for this collaboration agreement, highlighting that the alliance with Anglo American not only strengthens the company’s finances without the need to issue new shares amid the conflict in Ukraine, but also defines a clear path for the full development of the project. This strategic move is seen as key to the future operation of the Shymanivske mine, as soon as conditions in Ukraine allow.
On the other hand, Anglo American, known for its commitment to sustainable production and high-quality minerals essential to the global economy, reinforces its presence in the sector, aligning with the growing interest in high purity and sustainable iron. The company sees this project as an opportunity to expand its portfolio, leveraging its growth potential and the increasing demand.
In a previous stage, Black Iron had selected Cargill as a buyer partner, but the agreement did not materialize, leading to a new bidding process that ended in the alliance with Anglo American. Bacchus Capital Advisers led this competitive process, highlighting the international appeal of the Shymanivske project despite the current challenges.
Black Iron remains committed to the development of the Shymanivske project, of which it owns 100% ownership, surrounded by other operating mines in Ukraine. The company stands strong, adapting to circumstances and aiming to establish itself in the global mineral market.
Referrer: MiMub in Spanish
