A heavyweight team of mining veterans is backing a $21.5 million investment in Zanaga Iron Ore Co Ltd (AIM:ZIOC), giving a significant boost to one of the world’s largest untapped iron ore deposits.
The deal brings together some of the biggest names in mining from the past two decades, including Mark Cutifani, former chief executive of Anglo American, Tony Trahar, who led the same group before him, and Mick Davis, the ex-Glencore and Xstrata boss.
Their involvement signals renewed momentum for the Zanaga iron ore project in the Republic of Congo, which has struggled to move beyond the planning stage.
Zanaga is raising funds from a group of investors with deep mining and infrastructure experience, which also includes private equity firm Greymont Bay, development specialist Heeney Capital, and Gagan Gupta, founder of the industrial development company Arise. The financing could rise to $23m, depending on further subscriptions.
A large chunk of the money - $15m - will be used to buy out Glencore’s 43% stake in Zanaga. The move will sever the long-standing ties between the project and the Anglo-Swiss commodities giant, ending its marketing rights to future production and removing its representative from Zanaga’s board.
The remaining funds will go towards keeping the project running for the next year, advancing studies, and kicking off a formal bidding process to find a construction consortium for what is planned to be a 30 million tonne per year mine.
With an estimated net present value of $5.7bn and vast reserves, Zanaga has long been seen as a major potential iron ore producer, but it has yet to reach a final investment decision.
Greymont Bay is leading the investment, committing up to $12.35m. It brings in an advisory team packed with industry heavyweights. Cutifani, who oversaw Anglo American’s iron ore expansion in Brazil and South Africa, has also chaired Vale’s base metals unit and sits on the board of TotalEnergies.
Trahar, who ran Anglo American during a period of significant expansion, was instrumental in acquiring Kumba Iron Ore, now a key supplier of high-grade ore.
Tony O’Neill, Anglo’s former technical director, and Phil Mitchell, an ex-Rio Tinto executive with experience in iron ore strategy and development, are also involved.
Davis, who built Xstrata into one of the world’s biggest mining companies before its takeover by Glencore in 2013, is also investing through Vision Blue, his private equity firm focused on strategic minerals.
The shake-up means new leadership at Zanaga, with chief executive Martin Knauth and Phil Mitchell set to join the board.
ZIOC chair Clifford Elphick said: "Today's transaction is a transformational milestone for Zanaga, securing investment and leadership from industry-leading mining luminaries with a strong track record of developing some of the highest quality mining assets globally."