BHP Billiton Ltd. (BHP) has made a joint application with ArcelorMittal to export iron ore from a project in Guinea through neighboring Liberia, according to people familiar with the plan.
BHP and ArcelorMittal have asked the two West African governments to approve the plan for ore mined at the Nimba project, according to the people, who asked not to be identified as the information isn’t public. The world’s largest mining company wants to arrange for ore to be transported using a railway line and port controlled by steelmaker ArcelorMittal, three of the people said.
The joint application is part of negotiations for ArcelorMittal to buy BHP’s stake in Nimba, two of the people said. BHP and ArcelorMittal in 2010 tried to combine their iron-ore mining projects that straddle the Liberia-Guinea border before abandoning those discussions seven months later. The Wall Street Journal reported in May that ArcelorMittal was close to buying BHP’s Nimba mine.
Companies seeking to develop iron-ore mines in West Africa face a lack of transport links to ship the steelmaking ingredient to customers. Rio Tinto Group signed a $20 billion investment agreement with the Guinean government last month that includes the construction of a 650-kilometer (403-mile) railway. Sable Mining Ltd., a London-traded producer, is also seeking to move ore on ArcelorMittal’s rail link.
BHP rose 2.1 percent to 2,054.5 pence by the close of trading in London. ArcelorMittal gained 1.2 percent to 11.185 euros in Amsterdam.
Spokesmen for BHP, ArcelorMittal (MT) and the Liberian government declined to comment. A spokesman for the Guinean government and Mines Minister Kerfalla Yansane didn’t return calls seeking comment.
Liberia and Guinea don’t feature in BHP’s iron-ore expansion plans, Chief Executive Officer Andrew Mackenzie said at the company’s shareholder meeting in October. Melbourne-based BHP owns 41 percent of the Nimba mine in Guinea. Other shareholders include Newmont Mining Corp. and Areva SA.
ArcelorMittal, which is expanding its Liberian iron-ore mine in the Nimba area to produce as much as 20 million tons a year, is obliged to let other companies use any spare capacity on its railroad line. Sable, which is developing a deposit at Nimba on the Guinean side of the border, was granted permission to export through Liberia in October.
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