Monrovia – In 2010, the Government of Liberia in its strategy for development for infrastructure engaged the Government of Guinea under the former military ruler of Moussa Dadis Camara, resulting in a joint communiqué in which both countries committed to working together to achieve the shipment of iron ore through the port of Buchanan.
Last Friday, nearly nine years later, that deal finally came through as the two countries sealed the deal to allow several mines in Guinea, including the giant Nimba iron ore project, to export through Liberia.
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 for years and both nations are hoping that the agreement, which builds on an initial memorandum of understanding signed nine years ago, is a victory for U.S.-Canadian investor Robert Friedland’s HPX, which last month acquired Nimba, a high-grade deposit in southeast Guinea.
Mr. Abdoulaye Magassouba, Mines Minister of Guinea told Reuters: “The mining projects in question are near the border with Liberia and cannot be profitable if they export through Guinea’s coast.”
Magassouba said a graphite project owned by SRG Mining and a Zali Mining project would also be able to export through Liberia under the deal.
Magassouba, quoted by Reuters, said, the authorization to export via Liberia applies to the first 5 million tonnes produced at the mines beyond which the government will evaluate the feasibility of exporting via a 650-kilometre 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.
Vale-BSGR, submitted a proposal to the Liberian government in 2010 with the aim of signing an infrastructure development agreement with government of Liberia which among other things was going to see the reconstruction of the Mount Coffee Hydro at no cost to GOl, a new rail parallel to the rail that is currently being used by ArcelorMittal and a deep seaport adjacent the port of Buchanan. This deal was never signed due to delay on the part of GOL, coupled with regime change in Guinea.
Sable Mining the company at the center of controversies both in Liberia and Guinea did allegedly seal a deal with GOL in 2015 in an attempt to ship iron ore from Guinea through Liberia. This deal got aborted as a result of damaging report that was released by Global Witness in 2016 which indicted Sable Mining and past government officials in Guinea and Liberia.
Niron Metal Plc. of Sir Mick Davies recently signed an MOU with the George Weah led Government which could unlock Guinea iron ore Niron Metal Plc is seeking to ship 10 million ton of iron ore from it Zogota Concession in Guinea, they intend to use the existing rail and port that is currently serving ArcelorMittal.
Responding to a FrontPageAfrica inquiry on behalf of the CEO of ArcelorMittal, Scott Lowe, the company’s chief operating officer, Johannes Heystek said, “it is very early in the process but AML will cooperate to look for synergies that benefit all stakeholders.”
The MOU outlined a framework for feasibility by Niron Metals Plc which entails:
a. To set out the multiplier economic effects of access to rail and port services for third parties, identifying an optimum option for the Buchannan-Nimba–Guinea economic development trade corridor; To identify the optimum rail configuration for generating a preferred rail capacity in the medium and long term, including all links with existing and future road and rail networks, and port facilities; To identify all environmental and social impacts of relevance, so as to ensure the rail and port facilities are developed in a sustainable fashion; that adverse environmental impacts are minimized and mitigated; and that social impacts are optimized; To present a cost benefit analysis and overall financial analysis for the individual rail and port options; To share information with the GoL on the existing proposals for rail and port facilities, including financial projections by Niron Metals Plc.