FORMER Anglo American chief executives Tony Trahar and Mark Cutifani have teamed up with a group of investors to buy the Zanaga iron ore project in Republic of Congo (RoC).
They will raise an initial $21.5m of which $15m will be used to buy Glencore’s controlling 43% stake in London-listed Zanaga Iron Ore Company (ZIOC), including the offtake and marketing rights connected with its project. The balance of the funds will be put towards corporate and project-level work for the next 12 months.
The Zanaga project has long been on Glencore’s books. A feasibility study in 2014 forecast $2bn in capital expenditure for 12 million tons (Mt) a year in first phase production, increasing to 30Mt a year in iron ore over time.
Cutifani and Trahar are principal members of Greymont Bay, a private company that includes Mick Davis, the former CEO of Xstrata, and Gagan Gupta, CEO of Arise, a company involved in port and infrastructure development at RoC’s Pointe Noire.
Greymont also has Anglo’s former technical director Tony O’Neill as a member and Phil Mitchell, former head of business development at Rio Tinto, as well as New York-based private capital firm Heeney Capital Resource Partners.
Cutifani stepped down from Anglo in 2023 after 10 years while Trahar was CEO of Anglo American from 2000 to 2007.
ZIOC will continue to be led by CEO Martin Knauth and Andrew Trahar, the firm’s corporate development and investor relations manager who have put funds into the investment plan.
Greymont Bay’s investment is conditional on 20% of Zanaga project’s marketing rights being taken by Gulf Iron and Steel (GIS), described by ZIOC today as “a consortium of strategic industry entities” interested in developing integrated steelmaking facilities in Asia and the Americas.
Cutifani was instrumental in having Manara Minerals, the state-owned Saudi Arabian metals and minerals investor buy a 10% stake in Vale’s newly created Vale Base Metals of which he is also chairman. The founder of a Saudi investment fund focused on developing downstream processing plants in the kingdom is also listed as a ZIOC investor.
Clifford Elphick, chairman of ZIOC said the transaction – which is by means of the fund-raise and then a buy-back of Glencore’s ZIOC shares – would pave the way for discussions with strategic partners ahead of assemling a constructon consortium for the project.
“I am particularly excited about our new strategic partnerships with Middle Eastern and International groups, with industry expertise but also the commercial relationships needed to support financing and offtake agreements, adding notable value for all our stakeholders, including the Republic of Congo,” he said.
ZIOC said that the share subscription could be upscaled to $23m.
The project is situated about 380 kilometres from Pointe Noire and therefore requires significant infrastructural development – a factor which has worked against the project in the past.
The iron ore market has been under pressure this year owing to sluggish demand from China and as a consortium of investors, including Rio Tinto, prepare to commission the 30Mt/y Simandou in RoC’s neighbour Guinea in December. Simandou is scoped to double production in its second year.
However, ZIOC’s backers may take heart from the fact that Simandou deposit is situated about 600km from the nearest port.
