An iron-ore exploration project in Mozambique's Tete province owned by Australian miner Baobab Resources has been given a $5-million boost that will sustain the miner's local workforce during the global financial crisis.
World Bank subsidiary The International Finance Corporation (IFC), has announced that it will provide Baobab with an equity package of up to $5-million, in an effort to support local jobs and economic development.
The funding will be used for the exploration and feasibility phases of the Tete project, which comprises three contiguous exploration licences, covering 632 km2.
"Baobab is very pleased to have secured a joint-venture partner of IFC's reputation to participate in the future exploration and development of the Tete project," nonexecutive chairperson Jeremy Dowler said in a statement.
IFC global head for mining William Bulmer commented that the IFC was committed to assisting companies that developed projects in an environmentally and socially responsible manner, and in regions with low economic growth.
"Notwithstanding the current global financial crisis that has dried up much-needed liquidity, the IFC remains open for business and we will continue to invest in attractive junior mining companies," he added.
The loan is expected to support technology transfers and management skills transfers to Baobab's local work force.
Further, the World Bank group is collaborating with the Mozambican government to improve the investment climate in the mining sector, which is expected to play a "growing role" in the country's economy, said the IFC.
Source: Mining Weekly
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