Anglo rules out offer for Simandou depositComment on this story
Maytaal Angel Stockholm
Anglo American had ruled out a bid for Simandou in Guinea, one of the world’s most valuable iron ore deposits, but was still looking to expand its portfolio in the region, the mining house said yesterday.
“Don’t expect us to be bidding for a project such as Simandou,” Anglo’s head of marketing and iron ore sales, Timo Smit, said at a metals symposium in Sweden.
“Our focus is more on having options to expand in west and central Africa. We won’t be making any large-scale investments any time soon.”
Exploiting Simandou could help one of Africa’s poorest countries prosper but mine growth has been bogged down by disputes over concessions.
Earlier this year, Guinea revoked the mining rights over the northern half of Simandou held by VBG, a joint venture between BSG Resources and Vale, as a government report had found that BSG Resources won those rights by “corruption”.
BSG Resources has often said it was not involved in any wrongdoing and is seeking arbitration at the International Centre for Settlement of Investment Disputes.
The west African nation plans to start an auction to reissue the permits for VBG’s half of Simandou, and will allow former owner Vale to enter the tender, should it choose to. The other half of Simandou has been licensed to Rio Tinto.
In a bid to secure the best price it can for its ore, Anglo is looking at rolling out its fledgling trading in iron ore derivatives by hiring a team to trade the financial products.
“We have a thermal coal trading team in London, that’s our pilot project. If it goes well we may also get into iron ore trading, but probably not before the end of the year,” Smit said.
The iron ore derivatives market is supported by Anglo rival BHP Billiton and has gained popularity in recent years.
But the market lacks the participation of iron ore producers and is unpopular with steel mills, the natural buyers of ore whose input is needed for the market to mature. – Reuters