ASX-listed Genmin has achieved further progress in its collaboration with Sinohydro Corporation, a majority owned subsidiary of Chinese State-owned integrated engineering and construction conglomerate Power Construction Corporation of China (PowerChina), at the Baniaka iron-ore project, in Gabon.

In April, Genmin signed a binding memorandum of understanding (MoU) with Sinohydro related to the development of the project, through the provision of an engineering, procurement and construction (EPC) proposal, as well as the provision of assistance to procure funding from financial institutions, investors and iron-ore end-users.

Sinohydro has been operating in Gabon for over a decade, executing various large-scale infrastructure projects.

Further to the signing of the MoU, Sinohydro has now completed its review of Baniaka and has elected to take the next steps, submitting EPC proposals for key infrastructure to support project development.

Genmin has received detailed market competitive proposals from Sinohydro for a 60 km dedicated haul road from the planned Baniaka mine site to the Franceville rail head; a 30 km overhead power transmission line and transformers connecting Baniaka to the nearby Grand Poubara hydroelectric power facility; and an on-site workforce accommodation village.

A review of these proposals has started and the initial assessment indicates there could be a potential reduction in capital costs for these specific work packages compared with the estimates in the 2022 preliminary feasibility study.

Given the positive outcome of Sinohydro’s review and the competitive proposals received, Genmin is preparing additional project scopes, mainly focusing on civil engineering works, for cost estimation by Sinohydro.

Based on Genmin’s assessment of Sinohydro’s engineering capability, up to 50% of Baniaka’s project scope could be undertaken by Sinohydro.

Genmin is also exploring reductions in capital costs for other key project areas, such as the processing facilities.

In line with the MoU, PowerChina is supporting Genmin in securing project funding for Baniaka’s development.

As part of this strategic partnership, PowerChina has introduced potential Chinese funding partners, which are being considered as part of a broader funding plan for Baniaka.

Discussions are ongoing and PowerChina’s validation of Baniaka marks an important step toward obtaining a complete funding solution, Genmin says.