Cape Town - Jonah Capital, a private investment company and exploration partner of miner Kumba Iron Ore in Liberia, expects further ventures with the Anglo American unit to tap West Africa's mining potential.
Kumba is one of the world's largest exporters of steelmaking ingredient iron ore, but its operations are concentrated in South Africa, and have been hit in the wave of strikes that has swept the country's mining sector.
It announced a partnership with Jonah last September to tap two exploration sites in Liberia.
“There was a slight discomfort that Kumba was not in West Africa. It is a second footprint (for them) in West and central Africa and there is room for further (cooperation),” Fidel Jonah, the group's executive director, said on the sidelines of a mining conference.
The fate of dozens of West African iron ore projects - typically challenging due to a dearth of rail, road and port links - has been in the balance since funding began to dry up for junior producers during the crisis.
Majors, meanwhile, are under pressure from investors to pull away from tougher, capital-intensive projects.
Executives at Jonah Capital, set up by Ghanaian entrepreneur and former AngloGold Ashanti President Sam Jonah, say it is well placed to capitalise on rivals' absence as prices come down, helping it build a presence in a region where it says more than 500 million tonnes per year of potential iron ore production is being investigated.
“When the price drops off and people fall back, competition for ground drops off as well,” Fidel Jonah said.
“Sometimes that is to our advantage - when the prices are high, it is like the wild west.”
Outside the joint ventures with Anglo's Kumba and exploration, Jonah Capital also owns the Buchanan project, which is set to begin exporting iron ore fines left by LAMCO, a corporation that operated during Liberia's exporting heyday and until the 1990s. In the 1960s, the country was the world's third-largest iron ore exporter.
The Buchanan operation will produce 1.2 million tonnes per year of concentrate over 5 to 7 years, and Jonah is already being courted by potential buyers for the ore, though it declined to specify.
Jonah's Liberian mining and development activities are currently funded internally - helping it sidestep difficult equity and debt markets - but it could bring in other partners as it develops its projects, including commodity traders eager to snap up iron ore.
It is also looking outside Liberia to countries like Cameroon, Jonah said.
Sources familiar with the matter said last year that Jonah Capital was one of several bidders in the sale process for BHP Billiton's stake in the Nimba iron ore project in Guinea, as it was interested in Liberian exploration licences being sold alongside the main holding.
The sources have since said Jonah is no longer in the running, but the group declined to comment. - Reuters