Canadian mining company Black Iron Inc. with assets in Ukraine, despite the ongoing war, continues to promote the Shimanovsky iron ore project through negotiations with the Ministry of Defense regarding the transfer of land, the execution of an investment support agreement with the government of the country and obtaining permits for the extraction of minerals and their processing.
According to the company’s press release, the land adjacent to the Shimanovsky ore body, necessary for the location of the future processing plant, waste rock warehouses and tailings, belongs to the government of Ukraine and is used by the Ministry of Defense for training purposes. Discussions with the Department of Defense led to an agreement on a preliminary amount of funds that Black Iron would have to pay as compensation for obtaining this piece of land for its use.
“Efforts are now focused on drawing up a binding agreement on the transfer of this land (to the use of Black Iron – IF) after peace is established in Ukraine,” the press release states.
In addition, Black Iron is also negotiating with the government of Ukraine on an investment support agreement that will include several benefits, such as the permanence of legislation (company operating conditions – IF) and exemption from import duties on equipment needed for the project.
In turn, Black Iron management prepared an extensive report covering several aspects of the project, such as the proposed new jobs, tax payments and social benefits. Before submitting this document, it will be necessary to make some changes to the legislation of Ukraine in order for Black Iron to comply with the requirements, and work in this direction is currently in full swing, the press release emphasizes.
“In order to keep our permits valid, work is currently underway in Ukraine to update the geological and mining plans. Finally, while Black Iron stakeholders wait for peace in Ukraine to bring the Shimanovsky project to the construction stage, management is considering new potential projects to increase shareholder value “, – summed up in a press release.
As reported, in October 2010, Black Iron acquired the Cypriot subsidiary of Geo-Alliance Ore East Limited from EastOne investment group of Ukrainian businessman Viktor Pinchuk, together with licenses, for $13 million, then renaming it BKI Cyprus. The main assets are 99% in LLC “Shymanovskoe Steel” and “Zelenovskoe Steel” (both – Dnipro).
In July 2013, after a series of problems with the implementation of the Black Iron project, it announced an agreement with Metinvest, the largest Ukrainian mining and metallurgical group, to develop its iron ore assets. Metinvest B.V. paid to Black Iron Inc. $20 million and acquired 49% in BKI Cyprus. Later, however, Metinvest withdrew from the project.
The Shimanovskoye iron ore deposit is surrounded by five other operating mining enterprises, including the ArcelorMittal iron ore complex. The existing infrastructure, including access to electricity, railway and port facilities, according to Black Iron, will allow the project to be quickly implemented to the production stage.
According to a presentation dated May 2021, the expected capital investment in the launch of the first stage is estimated at $452 million, the second – $364 million. the first stage and 8 million tons per year – at the second.
