October 11, 2019 / 8:04 PM / 3 days ago

UPDATE 1-Guinea's Nimba iron ore project gets green light to export via Liberia

(Adds detail about terms of export authorisation)

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 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.

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

“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.

The authorisation to export via Liberia applies to the first 5 million tonnes produced at the mines, Magassouba said, beyond which the government will evaluate the feasibility of exporting via a 650-kilometre railway to the Guinean coast.

The “Transguineen” railway is to be built by the eventual owner of the much larger Simandou iron ore project, which the government insists must export through a Guinean port. Fortescue and SMB-Winning have bid to develop the mine.

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

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

ArcelorMittal declined to provide an immediate comment.

Reporting by Saliou Samb, Writing by Helen Reid; Editing by Aaron Ross, Deepa Babington and Richard Chang

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