Kogi Iron Ltd (ASX:KFE) has entered into a letter of intent (LOI) to progress discussions with the Inner Galaxy Group regarding a strategic partnership for the development of Kogi’s Agbaja Cast Steel Project in Nigeria.
Inner Galaxy is a Nigerian based company with steel production operations in Lagos State (capacity 200,000 tonnes per annum) and a facility near Aba in the Port Harcourt region (capacity 800,000 tonnes per annum).
The LOI is non-binding and is intended to provide a framework for further discussions to be held regarding the development of the Agbaja Cast Steel Project and the long term off-take of production from the Agbaja project.
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Any offtake agreement entered into will be for no more than a third of the total production capacity of the Agbaja Cast Steel Project.
The economic and financial impact of this non-binding LOI is not quantifiable at this stage.
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Kogi chairman Don Carroll said: “This is a recognition of the potential viability of the Agbaja Cast Steel Project and we look forward to the opportunity of working together with Inner Galaxy to form a long term, mutually beneficial relationship.”