Standard Bank, the leading African bank with 23 billion USD (11.5 trillion FCfa) in stock market capital announced in Yaoundé that it plans to raise financing for the completion of the Mbalam iron mining project.

An agreement was signed the same day between bank heads, the Cameroonian government and the fledgling Australian mining company, Sundance.

According to Serge Yanic Nana, financial advisor to the government for the Mbalam project and Cameroon’s Lead Advisor, “Standard Bank will be raising funds from the total pool of international lenders participating in the project.”

In the final feasibility study, it was indicated that the project will need 4.686 billion USD (around 2.3 trillion FCfa) in financing, of which 2.019 billion USD (a little more than 1 trillion FCfa) was needed for the construction of the railway.

Cameroon’s chief advisor explains that Cam Iron, the Cameroonian subsidiary of Sundance Resources, has committed to investing approximately 1.5 trillion FCfa in the railway and 450 billion FCfa in the mining project.

It will also complete infrastructure following technical guidelines that are in keeping with international standards and the environmental norms that are applicable in Cameroon. “The Mbalam Mining Convention signed in November 2012 between Cam Iron S.A. and the State of Cameroon provided for the creation of three companies in charge of the three main activities of the integrated Mbalam project, namely (i) MineCo for mining, (ii) RailCo for railway, and (iii) PortCo for the port,” explained Serge Yanic Nana.

Cam Iron will also have to, without financial compensation, return the entirety of rail and port infrastructure at the end of the 25-year concession deal. Serge Yanic Nana states that “the State’s total revenue on average over the 25-year period, will be 300 billion FCfa with less income over the first 10 years (Phase I) and more revenue in the remaining 15 years (Phase II).

” According to the Cameroonian government, after this interval, Cam Iron/Sundance and the government will have to engage negotiations and the conclusion of other legal instruments applicable within the Mbalam Convention, such as the Convention on the Conservation and Development of Forestry (UFA 10034), conceded to Cam Iron; the document of legislative approval of the provisions of the Mbalam Convention and the Cameroon-Congo Bilateral Agreement on the cross-border transportation of minerals.

Mota Engil, the Portuguese company that will have to build the railway and Standard Bank of South Africa will have to do their due-diligence in order to fine-tune the project’s financial structure and establish an optimistic timeline for the raising of the necessary funds to start work at the construction site.

"The financial framework is expected to take six to nine months, starting from June 5, 2014, the date of the signing of the concession agreements for the port and the railway as well as the EPC contract,” stated a source from the Office of the Prime Minister.