(Bloomberg) — Billionaire mining investor Robert Friedland has won the rights to develop an iron ore deposit in Guinea that owners including BHP Group have left undeveloped for years.
Friedland has been in talks with BHP, Newmont Goldcorp Corp. and Orano for months to secure the right to develop the Nimba deposit on Guinea’s border with Liberia. Guinean president Alpha Conde attended a signing ceremony in the capital, Conakry, on Thursday to agree to Friedland’s High Power Exploration group buying 95% of the project.
While Guinea has some of the world’s richest iron ore deposits, including the fabled Simandou mine that Rio Tinto Group, Vale SA and billionaire Beny Steinmetz have fought over for years, it has never exported a ton. One of the major obstacles has been the cost of building a railway to export out of Guinea, rather than using a much shorter route through Liberia.
“After several decades of attempts, today we are confident that we are going to get the ore into the market,” Guinean Mining Minister Abdoulaye Magassouba told reporters.
Guinea and HPX have agreed on terms for an updated mining convention, the company said in a statement. The deal includes a 15% free-carried government interest in the Guinean company operating the project, as well as tax and royalty arrangements and a development timetable.
HPX plans to bring a “starter mine” of 1 million to 5 million tons per year into production as quickly as possible, while feasibility studies are being completed for an expanded operation of at least 20 million tons per year, the company said.
Key to developing Nimba would be getting access to a rail line operated by ArcelorMittal, which has its own iron ore mine across the border in Liberia. ArcelorMittal has said it would let other companies use it, assuming there’s spare capacity or they pay for upgrades.
Friedland has made some of the biggest mineral discoveries in the world over the past few decades, including copper deposits in Mongolia and the Democratic Republic of Congo.