Guinea: exporting iron-ore through Liberia

By African Bulletin on November 9, 2010

Guinea’s Prime Minister, Jean-Marie Dore, said that Guinea intends to export its iron ore through the port of Buchanan in Liberia, and discussions with the Liberian government are instituted to fix the terms of use of the port for exporting the iron operated at Mount Nimba, he said. Liberia and Guinea have in common reserves of about four billion tonnes of iron ore, used in common in the region of Mount Nimba on the border between the two countries.

The rail road build from Mount Nimba to Buchanan for the exportation of iron-ore was damaged in Liberia’s civil war but has since been rehabilitated by the Indian company, Mittal Steel, which is exploiting the iron ore there. Few months ago, Guinea has signed a contract with BHP Billiton to exploit the Guinean side of Mount Nimba. Nonetheless, exporting the iron ore through the port of Conakry requires the construction of a railway across Guinea. This project requires a huge amount of money to realise, with all the difficulties that may cause, while guinea can pay money to Liberia and use their facilities, Doré said. In Parallel to these efforts, the Republic of Guinea signed a Basic Agreement of a joint venture with Vale-BSGR to develop mining rights in Zogota and Simandou Bloks 1 and 2.  Following this agreement, Vale acquired 51% of BSGR Guinea for a total of 2.5 billion dollars including 500 million payable immediately and the balance according to a schedule. Vale will assume the management control and have exclusive rights to operate and market all iron ore production, with a capacity of 50 million tonnes per annum (MTPA), which could be increased to 75-90 MTPA. The first phase of mining project in Vale-BSGR Guinea has been approved, with initial production anticipated to 10 MTPA at Zogota in southern Simandou, then at Simandou blocks 1 and 2. BSGR Guinea has received the exclusive authorization to export iron ore through Liberia in exchange for the reconstruction of the Trans-Guinean railway. The government of Guinea supports and welcomes the participation and commitment of Vale in this project that will create at least 5 000 direct jobs and many indirect ones. Yet this very positive momentum, for the two economies, must still wait for the new Liberian government to be appointed, which has just been sacked by President Ellen Johnson Sirleaf, then after talks would be finalised with the newly elected Guinean president.