ZincOx in financing talks for Korea recycling plant, negotiates supply contracts for ORP

Zinc mining and recycling specialist ZincOx (LON:ZOX) has started discussions to secure financing and engineering services for the Korea Recycling Plant (KRP), whose construction is expected to be accelerated if Korean authorities manage to purchase the land for the plant in the new few months. This is currently progressing, with KOTRA (the Korea Trade Investment Promotion Agency) and KOSA (the Korean steel industry association) “working hard” on the company’s behalf.

Following the anticipated purchase of the land, the site will be leased to ZincOx for the plant. The authorities have already awarded ZincOx’s chosen operating site a foreign investment zone status, granting it certain tax and other incentives available to foreign investors in Korea including a five year tax holiday.

“The local government, KOTRA and KOSA are all working hard on our behalf to secure the land for the KRP and if this is completed in the next few months, as we anticipate, we will be able to accelerate the development of this project,” said executive chairman Andrew Woollett.

ZincOx's chosen operating site for the KRP is 9.3 hectares in size and is situated at the Cheonbuk Industrial Complex (CIC) approx 10 milometres to the west of Pohang, one of Korea's major steel producing centres.

While the most significant, the progress with the construction of the Korean plant was not the only update provided by the company. It is continuing negotiations over a re-financing of the Jabali zinc mine in Yemen and processing plant with a number of parties. ZincOx is also conducting negotiations for EAFD (electric arc furnace dust) supply contracts for the Ohio recycling plant (ORP) in the USA, whilst engineering for the necessary modifications to the rotary hearth furnace was underway.

The company added that there was a wide spectrum of options for the Jabali zinc nine in Jemen, ranging from an outright sale to traditional project finance.

In its preliminary results last month, ZincOx reported the re-start of the development of ORP at a substantially lower cost than originally planned. The planned ORP is the company’s most advanced recycling project which will EAFD, a by-product from steel recycling processes, to produce zinc. According to ZincOx, EAFD contains about four times more zinc than the average natural deposit. EAFD generally contains between 18-25% zinc.

The company had £47 million in cash reserves at the end of 2009, and it has access to project financing of US$60 million.

Shares in the company added nearly 5% on the update.

http://www.proactiveinvestors.co.uk/companies/news/17730/zincox-in-financing-talks-for-korea-recycling-plant-negotiates-supply-contracts-for-orp-17730.html