New York - Glencore Xstrata has reached a preliminary deal for a $1 billion contract for access to railway and port facilities with Mauritania as part of its plans to expand into iron ore mining, the Financial Times reported on Sunday.
The newspaper said that the London-listed commodities giant is seeking to develop three big projects in the western North African country, two in partnership with state-controlled miner Société Nationale Industrielle et Minière (SNIM), which has exclusively exported the mineral from the country since the 1960s.
Glencore declined to comment on the story.
People familiar with the negotiations told the FT that SNIM had initially asked Glencore far too high a price for access to its railway for the next 20-25 years. But, recently both sides had reached a preliminary deal, pending some final discussions.
“They have now agreed with SNIM the price to use the railway per tonne [according to] international practice,” Mohamed Ould Khouna, Mauritania's minister of oil, energy and mines, told the Financial Times in an interview in Nouakchott.
The newspaper said Glencore is also close to reaching a deal for a construction contractor, but the company is still in negotiations with the Mauritanian government about the tax terms of the operation.
People familiar with the talks told the FT that the tax discussions could take months.
“It is very rare to find a mining opportunity like this with such exceptional advantages - a rail and port that are already functioning well - that exists nowhere else in Africa,” chief executive of SNIM Abdellahi Ould Mohamed Oudaâ told the FT. - Reuters