Guinea May End Review of Vale-BSG Ore Venture Early Next Year
Guinea may complete a review into the $10 billion iron-ore joint venture between Vale SA (VALE3) and BSG Resources Ltd before the end of the first quarter of 2013, the country’s Mines Minister Mohamed Lamine Fofana said today.
Vale, the world’s biggest iron-ore exporter, bought a 51 percent stake in the venture to develop the Simandou project in the west African nation in 2010. The operation was put on hold earlier this year amid government interventions and uncertainty over the building of a new port and railway.
BSG Resources, a company controlled by Israeli businessman Beny Steinmetz, said last month it had received a letter from the Guinea government regarding an investigation into how it obtained mining rights after they were removed by the state from Rio Tinto Plc (RIO) in 2008.
The government could complete the review before the end of March 2013 if discussions with the investors are a success, Fofana said in an e-mailed statement released today by the country’s presidency. “There is no uncertainty over the success of Guinea’s Simandou project,” Fofana said.
Simandou has long been seen as one of the highest-quality untapped iron-ore resources in the world. The Vale-BSG venture is seeking to produce 50 million metric tons to 100 million tons of high-grade iron ore annually and may cost $10 billion to develop, according to BSG’s website.
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