Sinosteel signs $680m iron ore mine deal with Cameroon

YAOUNDE, May 20 (Reuters): Cameroon's government has signed a 420 billion CFA franc ($675.96 million) high-grade iron ore mining deal with a subsidiary of Sinosteel Corporation Limited, as China seeks new sources of the steel-making ingredient.

Sinosteel Cam S.A., the Cameroonian subsidiary of the state-owned Chinese miner, will develop the Lobe iron ore mine in the central African nation, helping China to diversify its sources of iron ore beyond Australia, with which it is in a trade war, and Brazil.

Under an initial 20-year mining convention, concluded on May 6 in the capital Yaounde and seen by Reuters on Thursday, Sinosteel Cam aims to mine 10 million tonnes of ore with 33 per cent iron content annually.

It would enrich this to produce 4 million tonnes of ore with 60 per cent iron content, which would then be shipped. High-grade iron ore is particularly valued in making steel because it results in lower carbon emissions than lower grade ore.