Robert Friedland swoops for Guinea’s Nimba

Robert Friedland, the Canadian mining billionaire, is set to take control of the Nimba iron ore deposit in Guinea.

Late on Thursday, High Power Exploration, a private US company run by Mr Friedland, said it had secured approval from Conakry to buy the 95 per cent interest in Nimba owned by BHP, Newmont Mining and France’s Orano.

“I am delighted that HPX will work with the Government and people of Guinea to bring the Nimba deposit into production and to help His Excellency President Condé realise his longstanding vision of seeing Guinea become a world-class producer of iron ore,” said HPX President Eric Finlayson.

Nimba, located in the south-east of Guinea, is estimated to hold around 1bn tonnes of the steelmaking ingredient.

HPX said it was planning to bring a starter mine of 1m to 5m tonnes into production as soon as possible with a view to increasing output to at least 20m tonnes.

Under the deal, the government of Guinea will be handed a 15 per cent stake in Société des Mines de Fer de Guinée, the entity that owns Nimba. The government will also get two seats on the board of SMFG.

BHP, Goldcorp and Orano will receive payment for their stakes once the mine is up and running, people with knowledge of the deal said.

Guinea has some of the world’s highest grade iron ore, including the giant Simandou deposit, but the west African country has failed to export a tonne of the material even though it is highly prized in China.

Simandou has been the subject of numerous legal battles between Rio Tinto, Vale and BSGR, the mining company controlled by the family of Israeli diamond tycoon Beny Steinmetz.

However, President Alpha Condé is determined to change that and his government has indicated that it would allow some smaller iron ore deposits to export iron ore by rail through neighbouring Liberia.

One of those projects is called Zogota, which is being developed by Sir Mick Davis, the former head of Xstrata . It is not clear if HPX has secured a similar rail deal.

Mr Friedland, who is also executive chairman of Ivanhoe Mines, is one of the most flamboyant characters in the mining industry and has an almost unrivalled record of discovering big deposits.

These include the giant Oyu Tolgoi copper mine in Mongolia. He also has strong links with natural resources companies in China who are helping Ivanhoe develop the Kamoa-Kakula project in the Democratic Republic of Congo.

After a supply crunch caused by a deadly dam disaster in Brazil, iron ore prices surged to a five-year high above $120 a tonne earlier this year. They have since fallen back but at $90 a tonne remain high enough to incentivise fresh supply, particularly of high grade material.

In July, Conakry launched a tender for two of Simandou’s four blocks, attracting attention from several miners. Once company to be linked with a bid is Australia’s Fortescue Metals Group.

However, the government continues to inisist that any future developer of the Simandou iron ore deposit would have to build “trans-Guinean” railway to the west coast — a distance of around 650km

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