BHP Billiton has made a joint application with ArcelorMittal to export iron ore from a project in Guinea through neighbouring Liberia, according to people familiar with the plan.
BHP Billiton and ArcelorMittal had asked the two west African governments to approve the plan for ore mined at the Nimba project, said the people, who asked not to be identified as the information is not public. The largest mining company wanted to arrange for ore to be transported using a railway line and port controlled by top steel maker ArcelorMittal, three of the people said.
The joint application was part of negotiations for ArcelorMittal to buy BHP Billiton’s stake in Nimba, two of the people said.
In 2010 the firms tried to combine their iron ore projects that straddle the Liberia-Guinea border before abandoning discussions seven months later. The Wall Street Journal reported in May that ArcelorMittal was close to buying the Nimba mine from BHP Billiton.
Companies seeking to develop iron ore mines in west Africa are confronted by a lack of transport links to ship the material to customers. Rio Tinto signed a $20 billion (R213bn) investment agreement with the Guinean government last month that includes the construction of a 650km railway. Sable Mining, a London-traded producer, is also seeking to move ore on ArcelorMittal’s rail link.
Spokesmen for BHP Billiton, ArcelorMittal and the Liberian government declined to comment. A spokesman for the Guinean government and Mines Minister Kerfalla Yansane did not return calls.
Liberia and Guinea did not feature in BHP Billiton’s iron ore expansion plans, chief executive Andrew Mackenzie told shareholders in October last year.
Melbourne-based BHP Billiton owns 41 percent of the Nimba mine in Guinea. Other shareholders include Newmont Mining and Areva.
ArcelorMittal, which is expanding its Liberian iron ore mine in the Nimba area to produce as much as 20 million tons a year, is obliged to let other companies use any spare capacity on its railway.
Sable, which is developing a deposit at Nimba on the Guinean side of the border, was granted permission to export through Liberia in October last year. – Bloomberg