Algerian-Australian JV WMZ Enters $336 million EPC contract for Tala Hamza Zinc Project

Western Mediterranean Zinc Spa (WMZ), a joint venture between Algeria and Australia, has finalized a $336 million Engineering, Procurement, and Construction (EPC) contract with Sinosteel Equipment & Engineering Co. (Sinosteel MECC) to develop the Tala Hamza Zinc Project in Algeria's Bejaia Province, as reported by Zawya. This milestone agreement marks a significant step in advancing one of the region's largest mining projects, promising to elevate Algeria’s standing in the global zinc industry.

WMZ is structured as a partnership between ASX-listed Terramin, which holds a 49 percent stake, and two Algerian state-owned entities: Enterprise Nationale des Produits Miniers Non-Ferreux et des Substances Utiles Spa (ENOF), holding 48.5 percent, and Office National de Recherche Géologique et Minière (ORGM) with a 2.5 percent interest. Together, these partners are poised to bring substantial benefits to Algeria's mining sector, supporting both economic development and industrial modernization in the country.

The EPC contract covers an extensive scope of work aimed at creating a world-class zinc mining operation. Key project components include constructing a 2.0 million tonnes per annum (mtpa) underground zinc mine and a processing plant, alongside backfill facilities, a dry stack tailing storage facility, water ponds, and a wastewater treatment plant. In addition to these core mining facilities, the project will involve infrastructure development within the mine area, including road access, electrical installations, general civil works, and security fencing. This comprehensive approach underscores the project’s commitment to sustainable and efficient operations, aligning with international best practices.

Terramin disclosed the details of the agreement in a statement to the stock exchange on Monday, noting that the funding arrangements for the project have been fully formalized for the next 18 months, with construction anticipated to start in the coming weeks. This prompt timeline reflects the joint venture’s drive to move the project forward quickly, bringing both jobs and technological advancements to the local community and enhancing Algeria's industrial capabilities.

In a statement, Bruce Sheng, Executive Chair of Terramin, expressed pride in contributing to Algeria’s economic growth through the Tala Hamza project, noting that this development would mark a historic achievement for the nation. Sheng highlighted that the project is expected to bolster Algeria’s economy by establishing a large-scale, high-standard mining operation, which will serve as a model for other projects in the region.

The Tala Hamza project has attracted significant attention due to its vast potential. In May 2023, Algeria’s mining regulator issued the mining permit for the project, signaling a critical step toward production. According to Terramin, the Tala Hamza deposit contains an estimated 53 million tonnes of resources (Measured, Indicated, and Inferred), with an average grade of 5.3 percent zinc and 1.3 percent lead based on a 2.5 percent zinc-equivalent cut-off. This resource base positions the project among the world’s potential top ten zinc producers, underscoring its value to both the regional and global zinc markets.

According to recent reports, the project is on track for completion by July 2026, with production targets of 170,000 tonnes of zinc and 30,000 tonnes of lead. Expected turnover is estimated at a minimum of $215 million annually, with net profits projected to reach nearly $60 million once operations commence. This ambitious project is anticipated to significantly enhance Algeria’s role in the mining sector, providing long-term economic benefits and positioning the country as a prominent player in the zinc industry.