Brazilian miner takes 51 per cent in BSG Guinea JV
Brazilian miner Vale has bought a majority stake in a division of mining company BSG Resources in Guinea, at a cost of $US2.5 billion.
The stake will give Vale access to what it referred to as being among the best deposits of iron ore in the world.
"Guinea will be a player on the world iron market within four years and could be the number three producer in six years," Mines Minister Mahmoud Thiam said. "This decision will also kick-start other mining projects in Guinea."
Production at the Simandou South property known as Zogota will begin in 2012 with 10 million tonnes of iron ore rising to 50 million tonnes by 2015, Vale said. The deal also gives Vale access to exploration blocks Simandou North 1 and 2.
It will pay $US500 million up front for a 51 per cent stake in BSG Resources (Guinea) Ltd and the remaining $US2 billion in subsequent payments.
The joint venture has committed to renovate 660 kilometres of railway on which Vale plans to export the iron ore via Liberia.
BSG Resources is controlled by Israeli billionaire diamond trader Beny Steinmetz and
has oil and gas projects in Russia and Nigeria, and copper, diamonds and iron ore mines in Africa, and an engineering arm,.
Vale is also in talks with Liberia about a possible concession there and may seek a stake in the Belinga iron ore project in Gabon which was offered to a Chinese company. It is expected that Vale will form a joint venture for Belinga.
