Glencore-Backed Core Seeks Investors for $4 Billion Ore Project

Core Mining Ltd., an iron ore explorer backed by Glencore International Plc, said its Avima project holds an estimated 1 billion metric tons of the raw material and it’s in talks with potential new investors.

“We are getting a reasonable amount of confidence in Avima and the resource to open discussions now with some strategic parties,” Socrates Vasiliades, chief executive officer of the closely held company, said today in a phone interview. “That includes consumers and infrastructure builders. An IPO for us is not on the cards immediately.”

Core, which also has Russian steelmaker OAO Severstal as an investor, is studying development of an iron ore mine in the Republic of Congo at a cost of as much as $4 billion. Glencore, the world’s largest publicly traded commodities supplier, bought a stake in Core in April. The value wasn’t disclosed.

“There’s reasonably strong interest in the company,” Vasiliades said, declining to give timing on assessing new investors. “Glencore continue to show very strong interest in the company.”

Core is studying development of the Avima mine, port and rail project in the Republic of Congo at a cost of as much as $4 billion. The company today issued its first assessment of iron ore at the project.

The deposit is estimated to hold an inferred resource, the lowest of five categories of surety in mineral deposits, of 1 billion tons at an average grade of 47.2 percent iron. Core is seeking to discover a total resource of 5.3 billion tons, it said.

Core would consider an initial public offering to help fund development, Vasiliades said last year. Core has said it plans to start output by 2015 at a rate of 20 million metric tons a year.

Severstal acquired a 16.5 percent stake in Core, the company said in May last year.

To contact the reporter on this story: Jesse Riseborough in London at jriseborough@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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