(Yicai) April 28 -- Shares of Zigong Conveying Machinery Group surged by the daily limit after the Chinese manufacturer of belt conveyors secured a USD406 million contract for a bauxite project in Guinea, West Africa.

Zigong [SHE: 001288] jumped by 10 percent at the opening bell but faced pressure from sluggish market sentiment, ultimately closing up just 2.7 percent at CNY29.59 (USD4.10) in Shenzhen today. The Shenzhen Component Index finished the day down 0.6 percent.

The industrial machinery company signed a general engineering contracting agreement with Silver Valley International to supply a material handling system for a project in the bauxite-rich country, the Sichuan-based firm announced in after-hours on April 25. Bauxite is an ore primarily used in aluminum production.

Zigong did not disclose more details about the client but a recent news report published on the website of a state-owned firm shows that Silver Valley is a Chinese-owned company with operations in Guinea.

Under the contract, Zigong will construct a 128-kilometer-long curved mineral conveyor belt for the facility, with an estimated project duration of 442 days. The company will handle all aspects of the project, including design, equipment procurement, installation, and personnel training, though it did not disclose production details.

The deal is nearly double the company's audited operating income from last year. The successful execution of this contract will enhance Zigong's performance, improve its international brand recognition, and facilitate expansion into overseas markets, it stated.

Zigong is one of China’s leading suppliers of material handling systems. Last year, the company sold over 153 km of conveyor belt systems, with overseas sales exceeding CNY1 billion (USD142 million), accounting for nearly 68 percent of its total sales. Among its international clients was Guinea's Simandou iron ore project, one of the world’s largest mining developments, along with its associated port project.

Editor: Emmi Laine