Company News

Guinea's Nimba iron ore project gets green light to export via Liberia

CONAKRY, Oct 11 (Reuters) - Guinea and Liberia signed a deal on Friday to allow several mines in Guinea, including the giant Nimba iron ore project, to export through Liberia, officials from the two West African countries said.

The logistics of transporting tonnes of raw materials to port from mining sites in remote parts of Guinea has been a major hurdle for prospective developers of the country’s vast mineral wealth.

Friday’s agreement, which builds on an initial memorandum of understanding signed six years ago, is a victory for American-Canadian investor Robert Friedland’s HPX, which last month acquired Nimba, a high-grade deposit in Guinea’s south-east.

“The mining projects in question are near the border with Liberia and cannot be profitable if they export through Guinea’s coast,” Guinea’s mines minister Abdoulaye Magassouba told Reuters.

A graphite project owned by SRG Mining and a Zali Mining project would also be able to export through Liberia under the deal, Magassouba said.

Zogota, a nearby iron ore deposit owned by former Xstrata boss Mick Davis’ Niron Metals, had already negotiated an agreement to export through Liberia.

But both Nimba and Zogota still need to reach an agreement with Germany’s ArcelorMittal, the sole rail concession holder in Liberia, to convince it to allow them to use its infrastructure.

ArcelorMittal declined an immediate comment when contacted by Reuters.

Exporting through Liberia is not an option, however, for the much larger Simandou iron ore project, which Fortescue and SMB-Winning have bid for.

Guinea’s government says the eventual owner of Simandou must build a 650-kilometre railway - the “Transguineen” - to transport iron ore to the Guinean coast for export. (Reporting by Saliou Samb, Writing by Helen Reid, Editing by Aaron Ross and Deepa Babington)