Adelaide, Mar 8, 2007 (ABN Newswire) - Leading industrial companies from the Gulf Region, Saudi Basic Industries Corporation ("SABIC") and Qatar Steel Company ("Qatar Steel") have today signed in Nouakchott, Mauritania a historic Memorandum of Understanding ("MoU") with the Mauritanian iron ore producer, Societe Nationale Industrielle et Miniere ("SNIM"), and its partner, Sphere Investments Ltd ("Sphere"). SNIM and Sphere are the joint owners of the Guelb el Aouj Direct Reduction Pellet Project ("the Project"), a world class iron ore project initially planned to produce 7 million tonnes per annum (Mt/a) of direct reduction ("DR") pellets for a period of over 30 years from a high quality reserve.

Under the terms of the MoU, the partners have agreed to work towards the joint development of the Project, with the aim of first DR pellet production by 2010. The Project will produce DR grade pellets for steel production by leading international producers including Hadeed (SABIC's affiliate) and Qatar Steel. A new jointly owned Mauritanian company ("Newco") will be established to develop the Project including entering into off-take and other service agreements. SNIM and Sphere, through a 50/50 holding company, will own 50.1% of Newco with SABIC owning 34.9% and Qatar Steel holding the balance of 15.0%. The investments by SABIC and Qatar Steel will be made subject to satisfactory bankable feasibility study ("BFS") results, expected by late October 2007.

SNIM commenced operations in 1963 and supplies around 12Mt/a of iron ore to the internationally traded market. SABIC is the largest and most profitable non-oil company in the Middle East and one of the top 10 global petrochemical companies. Qatar Steel was the first steel producer in the Gulf region and is a wholly owned subsidiary of Industries Qatar which is in turn 70% owned by Qatar Petroleum. Hadeed and Qatar Steel are the largest steel producers in the Gulf and collectively own 18% of ASX listed Sphere, the company responsible for evaluation of the Project since 2001.

Mr Mohamed Ali ould Sidi Mohamed, Director and General Manager of SNIM thanked the Mauritanian Government and the partners for their important contribution to the success of this event. "This is the beginning of a major industrial development in North Mauritania, a most significant iron ore region with billions of tonnes of potentially high quality deposits. SNIM's immediate ambition is for Mauritania to become a major DR pellet producer. The Project area itself is believed to contain sufficient resources to support multiple DR pellet projects. We are thankful for the hard work of SABIC, Qatar Steel and our partner Sphere and look forward to working closely with all the parties concerned to bring the Project successfully into production, " he added.

The accompanying photograph shows from Left to Right starting from the second seated person on the left;

Mr. Mohamed Ali ould SIDI MOHAMED (President of SNIM)
Sh. Nasser Hamad Al-Thani (President of QASCO)
Mr. Mohamed S. Al-Jabr (President of Hadeed)
Mr. Alexander Burns (MD of Sphere Investments Limited)
Mr. Abdallah ould Abdel Fettah (Project Director)

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