[Cancelled] MCC Overseas provides $80 million EPC financing facility to Amex Resources for the Mba Delta Ironsands Project

[Cancelled] MCC Overseas provides $80 million EPC financing facility to Amex Resources for the Mba Delta Ironsands Project In December 2013, MCC Overseas Limited (MCCO) — a subsidiary of Chinese state-owned China Metallurgical Group Corporation (MCC) — signed a $100 million EPC+F contract with Amex Resources — an Australian industrial firm — for the Mba Delta Ironsands Project.

The financial details of the facility are unknown, but were based on the FIDIC Yellow Book; as part of the agreement, MCCO would provide a $80 million (FJD 153 minion) facility to Amex for the project.

The contract included the construction of a new wharf at Amex's Lautoka Port and the purchase of owner-operated mining and marine transport fleets for export operations.

MCCO served as main contractor and subcontracted the construction of the wharf to CCCC First Harbor Consultants, a wholly-owned subsidiary of China Communications Construction Company (CCCC).

The wharf would have seen the construction of a dedicated berth for vessels of up to 60,000 ton capacity, a barge unloading facility, a washing plant, an enclosed stockpile shed, ship loading infrastructure, workshops, and offices.

The business outlook for the Mba Delta Ironsand Project, which contained 220 million tons of 10.9% grade ironsand in June 2014, was positive.

MCCO planned to sign a 10-year off-take agreement with Amex after construction for the purchase of 5 million tons of ironsand concentrate.

Applied Technology & Management Inc. was contracted to design the marine works, and Engenium Pty Limited and WesEng Consulting Limited were contracted to design the land infrastructure and administrative facilities.

Amex planned to hire a mixed workforce of Chinese and locally trained staff to run the operations of the completed site. Construction was estimated to take 18 months and was planned to begin in February 2014.

On January 6, 2014, Amex issued a $20 million advanced prepayment to MCCO, which was guaranteed by the Bank of China (BOC).

However, in 2014, MCCO failed to raise sufficient funds to begin construction or provide the $80 million facility and requested time to restructure its internal financing structure, potentially including a Sinosure insurance policy.

Then, in January 8, 2015, after MCCO's failure to begin work, Amex terminated its contract with MCCO and began searching for an alternative EPC contractor.

It demanded that MCCO repay the $20 million advanced prepayment, which it failed to do; as a result, Amex invoked the BOC guarantee over its prepayment to MCCO. On March 19, 2015, BOC issued the $20 million to Amex, which used the proceeds to repay a separate lender.

On December 11, 2015, Amex initiated arbitration proceedings through the International Chamber of Commerce against MCCO for non-performance of the contract and failure to pay damages.