Alderon Iron Ore Corp. announced that The Kami Mine Limited Partnership (Kami LP), an affiliate of Alderon, entered into an off-take agreement with a subsidiary of Glencore, pursuant to which Glencore will acquire all of actual annual production from the Kami Project that has not been allocated to Hebei Iron & Steel Group Co.
Under the terms of the Off-Take Agreement, Glencore will be obligated to purchase, upon the commencement of commercial production, 40% of the actual annual production from the Kami Project up to a maximum of 3.2Mt of the first 8.0Mt of iron ore concentrate produced annually at the Kami Project. The term of the off-take agreement will continue until Kami LP has delivered 48.0Mt of iron ore concentrate to Glencore, which is expected to be 15 years after the commencement of commercial production.
The market price paid by Glencore will be based on the monthly average price for iron ore sinter feed fines quoted by Platts Iron Ore Index for 62% iron content (plus additional quoted premium for iron content greater than 62%), less a discount equal to 2% of such quoted price.