CONAKRY– 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 US-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.
The authorisation to export via Liberia applies to the first five-million tonnes produced at the mines, Magassouba said, beyond which the government will evaluate the feasibility of exporting via a 650-km 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