MoU signed for $60m roaster plant at Freezone Sohar
MUSCAT — Tri-Star Resources, an integrated antimony development company, has announced that it has entered into a non-binding Memorandum of Understanding (MoU) with Oman Investment Fund (OIF), a Sovereign Wealth Fund of Oman, and Castell Investments Ltd whose ultimate parent company is Dubai Transport Company to establish a joint venture company to construct and operate an antimony roasting facility in Oman.
The Roaster, a 20,000 tonne per annum nameplate capacity antimony metal and tri-oxide manufacturing facility, has a total estimated cost of $60 million.
The joint venture company, to be called Strategic and Precious Metals Processing LLC (SPMP), will be incorporated in Freezone Sohar (Sohar FTZ), which is managed by Sohar Industrial Port Company (Port of Sohar), itself a joint venture between the Port of Rotterdam and the Sultanate of Oman. SPMP is expected to enter into a land lease over a 22 hectare plot in Sohar FTZ.
Under the MOU, the Joint Venture Parties will own and control SPMP in the ratio 40 per cent by Tri-Star Resources, 40 per cent by OIF and 20 per cent by Castell. The funding structure for the total capital cost of $60 million is expected to include $30 million of project finance to be raised from local and regional banks. A number of banks in Oman have been contacted by the Joint Venture Parties and indicative loan financing terms have been received and are under consideration.
The Joint Venture Parties are progressing towards completing the final documentation, approvals and financing package so that site preparation work and construction can commence in the first quarter of 2014. The Roaster construction is expected to take 12 months with a further three months of commissioning. The first full year of operation is expected to be 2016.
Greenstone Equity Partners, a Dubai based investment and advisory firm, has advised Tri-Star Resources on the establishment of the joint venture and is advising the Joint Venture Parties on the debt financing for SPMP.
The Roaster is the first phase of the Company’s proposed metal processing activities. Phase 2, also to be located at Freezone Sohar, envisages using Tri-Star Resources’ clean roasting technology to treat refractory gold sulfide concentrates. Having completed a preliminary engineering design plant layout and general site assembly, the Company is negotiating an option to lease a further 76 hectare site adjoining the Roaster site.
A preliminary technical report on the potential feasibility of the roasting technology developed by Tri-Star Resources to treat refractory gold concentrates has been commissioned from an independent engineering firm and is expected to be completed by the end of October 2013.
Tri-Star Resources’ existing site in the Al Ghail free trade zone in Ras al Khaimah (RAK) is under review to assess its suitability to host a second refractory gold plant, a gold refining facility or an antimony tri-oxide based additives facility. The site is also being considered for utilisation of solid waste products from the processing facilities, such as gypsum for the growing plasterboard market in the Gulf.
Commenting on the signing of the MoU, Emin Eyi, Managing Director of Tri-Star Resources, said: “We welcome our partners to the project in Sohar Free Trade Zone. Oman Investment Fund is a leading Sovereign Fund in the Gulf and Castell Investments Ltd is part of a diversified regional conglomerate based in Dubai. Both parties provide valuable skills and contributions to the Roaster project, which provides Tri-Star Resources with confidence on the deliverability of this and future projects in the GCC region.
“We are impressed with the progress made by Sohar FTZ in becoming a metals and minerals processing hub in the Middle East. Our proposed projects, both Phase 1 in antimony tri-oxide processing and Phase 2 in refractory gold processing, are well suited to the future strategy of Sohar FTZ. Once fully operational they will be significant contributors to local employment and the economic development of the metals processing sector in Oman.
“The Sohar FTZ offers exceptional logistics and infrastructure nodes, delivers low energy costs and brings experience in minerals handling together with valuable fiscal incentives. The Joint Venture Parties recognise the importance of developing a strategic and precious metal focused, EU environmentally compliant processing facility to provide flame retardant ingredients to the global plastics and chemicals industry.
Antimony tri-oxide is a critical additive for many vital manufacturing processes in Europe, USA and Japan. Hence, we believe that the plant in Sohar FTZ will be of strategic importance and a uniquely important project for Oman,” Eyi added.
(OEPPA Business Development Dept)