Ord River Resources reports MoU for Laos alumina off-take sale agreement signed

Ord River Resources (ASX: ORD) has reported that Sino Australian Resources (SARCO) and China Non-Ferrous Metal Industry’s Foreign Engineering & Construction (NFC) have signed a second Memorandum of Understanding (MoU) for sale of alumina from the Laos Aluminium JV Project.

SARCO and NFC will enter into a minimum 20 year off-take agreement for SARCO to sell to an NFC-led buyer group alumina products from Laos. Ord River holds a 49% interest in SARCO, a joint venture company between ORD and NFC.

Ord River is bullish that SARCO will develop the project into a world class alumina refinery with bauxite potential estimated to be to 2 billion tonnes.

The agreed annual sale quantity will be 600,000 tonnes and the sale price will be based on internationally recognised market prices, that will be adjusted accordingly to reflect market prevailing prices.

Prior to the construction of the planned alumina refinery in Laos, SARCO and NFC will convert this MoU into a binding contract that is compliant with internationally recognised standards.

The agreement completes the initial round of negotiations for the three most important building blocks for the planned construction of a 600,000 tonne alumina refinery in Laos.

The other two significant milestones for the project were China Minsheng Banking Corporation’s letter of proposal for 70% debt financing and an MoU for a fixed price and fixed term EPC contract with NFC for US$600 million.

The Lao aluminium project has a JORC compliant resource of 130 million tons of quality bauxite resource and the partners are building a 600,000 ton per annum capacity alumina refinery, which has received strong support from the Lao and Chinese governments.

The alumina price is projected to rise to reflect a fundamental upward shift in long term demand curve. Fast growing nations including China demand alumina to supply their growing manufacturing base.

The refinery is well positioned to benefit from this expected price increase and value appreciation.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/18438/ord-river-resources-reports-mou-for-laos-alumina-off-take-sale-agreement-signed-18438.html