Iron ore producer Genmin has signed a non-binding memorandum of understanding (MoU) with a subsidiary of China’s Hunan Valin Steel to supply iron ore products from its Baniaka iron ore project in Gabon.

Under the potential offtake deal, Genmin would supply 2.4 million tonnes per annum (mtpa) of iron ore products for two years. These products include Baniaka green fines, lump and pellet feed iron ore products.

In a statement, Genmin said: “Pricing of iron ore product will be determined by reference to the Platts Iron Ore Index, or another agreed price index.”

Genmin said it expects to sign a legally binding offtake agreement with Hunan Valin by 31 December 2024.

This will cover 1.5mtpa of fines, 0.5mtpa of lump and 400,000tpa of pellet feed products from the Baniaka project.

Genmin managing director and CEO Joe Ariti said: “We are privileged to have signed this MoU with Hunan Valin, a group of substantial balance sheet capacity that has shown long-term loyalty through the purchase of iron ore from FMG [Fortescue Metals Group].

“With the signing of this MoU, Genmin now has potential sales of approximately 15mt of Baniaka Green iron ore products to be balanced over its production profile of 5mtpa, which nominally provides sales coverage for the first three years of operations.”

Genmin has so far signed three MoUs for a potential total offtake of 14.8mt of Baniaka green fines, lump and pellet feed products.