Toronto-based MagIndustries Corp. has signed a framework agreement with a Beijing-headquartered construction company, which is negotiating to build the proposed Mengo potash project in western Africa.

The agreement provides for COMPLANT to be appointed contractor for the project and for it to source a construction loan of up to US$1.2 billion, repayable over 10 years or more.

COMPLANT would have the option to acquire 50.1 per cent of the project, if the two companies reach a definitive agreement.

If the Chinese company exercises its option, MagIndustries would see its ownership stake fall to 39.9 per cent from 90 per cent while the Republic of Congo would continue to own 10 per cent.

COMPLANT was formed in 1959 to build complete manufacturing plants in China and abroad. It's now a publicly traded company controlled by China's State Development & Investment Corp.