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Iron Ore Projects in West Africa

June 14, 2010

FACTBOX-Iron ore projects in West Africa
Mon Jun 14, 2010 11:15am GMT

June 14 (Reuters) – BHP Billiton BHP.L(BLT.L: Quote) became the latest mining company to commit to a large-scale iron ore project in West Africa when Liberia said on Monday the two sides had signed a deal that could be worth $3 billion. [ID:nLDE65D11C]

Mining firms are increasingly spending billions of dollars on iron ore projects in West Africa, a politically unstable and logistically testing region, which is home to the world’s last great undeveloped deposits of the mineral. Here are some of the major operations and works in progress:

CAMEROON

Australia’s Sundance Resources (SDL.AX: Quote) is developing the Mbalam project in Cameroon, estimated to cost in the region of $3 billion. The company expects it to start production in 2013. Sundance aims to dig 35 million tonnes of hematite ore per year, at a mine life of 25 years.

GABON The Belinga project is a centrepiece of Gabon’s policy of diversifying away from oil. Awarded to China’s CMEC in 2006, the project stalled and Gabon said in April it would review the deal. Observers in Gabon expect the contract to remain with the Chinese, though on renegotiated terms, with Brazil’s Vale (VALE5.SA: Quote)(VALE.N: Quote) involved in a technical and environmental capacity.

GUINEA Iron ore is the major growth industry in Guinea, already the world’s biggest bauxite exporter. In March, a joint venture of Rio Tinto (RIO.L: Quote)(RIO.AX: Quote) and Chinalco signed a $2.9 billion agreement to develop the Simandou project, which Rio says is one of the world’s biggest with 2.25 billion tonnes of the mineral. A month later, Vale spent $2.5 billion on a stake in BSG Resources to enable it to build the Simandou-Zogota mine, which will produce 50 million tonnes per year by 2015.

IVORY COAST

India’s Tata Steel (TISC.BO: Quote) signed a deal in 2007 with Ivorian state mining firm SODEMI to develop iron ore deposits at Mount Nimba, which the firm says is one of Africa’s biggest. Tata is working on feasibility studies and exploration in the Ivory Coast. It expects the ore dug there to be supplied to steelworks in the Netherlands and Britain.

LIBERIA

Liberia said on Monday it had signed a minerals development agreement with BHP Billiton to allow the mining group to press ahead with exploration and development of a potential $3 billion iron ore project.

ArcelorMittal (ISPA.AS: Quote) this year restarted work on its $1.5 billion Mount Nimba project, which it had suspended last May. The project is due to begin production in mid-2011.

MALI

Mali is set to become Africa’s newest iron ore producer in September this year, when Indian-owned firm Sahara Mining plans to begin producing 50,000 tonnes per month at its Tienfala project [ID:nLDE64D142].

MAURITANIA Iron ore is one of the biggest export earners for desert nation Mauritania, with state-owned miner SNIM producing 10.2 million tonnes in 2009. SNIM is developing the $700 million Guleb II project, which it expects to add 4 million tonnes to its annual output when it comes on stream. Construction, which could take around three years, is scheduled to start in 2010.

SENEGAL

ArcelorMittal restarted work this year on its $2.2 billion Faleme project, also suspended last year. No new timetable has been put in place, but work is underway on analysing infrastructure requirements.

SIERRA LEONE

London-listed African Minerals (AMIq.L: Quote) expects to start commercial production at its Tonkolili project in the first quarter of 2011. The company says the resource, at 10.5 billion tonnes, is one of the biggest in the world.

Another company, London Mining (LOND.L: Quote) said earlier this year it will spend $300 million over the next four years on its Marampa project, for which it is targeting primary ore production of between 5 million and 8 million tonnes per year by 2013.

Sources: Company information, Reuters data

(Compiled by Daniel Magnowski; Editing by Alison Birrane)

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