Anglo American Plc and unit Kumba Iron Ore Ltd. agreed to fund a Gabon exploration project to gain access to the steelmaking raw material in West Africa.
Ferrex Plc, a London-based exploration company, said today Anglo American and its Pretoria-based unit agreed to fund exploration at the Mebaga project for as long as two years. Anglo American and Kumba have the option to move to full ownership of Mebaga, Ferrex said in a statement.
Kumba runs the continent’s largest iron-ore mine, at Sishen in South Africa’s Northern Cape province, and has all its producing assets in the country. It wants to almost double output by 2030, with new sites in western and central Africa potentially accounting for more than 20 percent of the total. It also has an agreement to look for deposits in Liberia.
Anglo American and Kumba will manage exploration at Mebaga, using Ferrex’s team in Gabon, Ferrex said in its statement. Commercial terms of the deal are due to be announced once due diligence in Mebaga is completed in February, it said.
Gert Schoeman, a spokesman for Kumba, wasn’t immediately available for comment when contacted by phone today.
Kumba produced 43.1 million metric tons of the steel ingredient in South Africa last year. It has said it wants to expand that to 70 million tons by 2030 and is seeking as much as 20 million tons of output from west and central Africa beyond that date.
Kumba closed a $10.5 million exploration agreement in August 2012 with Jonah Capital for two projects in Liberia.