Billionaire Robert Friedland-backed High Power Exploration (HPX) has secured rights to develop a massive iron ore deposit in Guinea left undeveloped for years by its previous owners.
The US company, run by the Canadian mining icon, said the decision allowed it to buy a 95% stake in Nimba, owned until now by BHP, Newmont Mining and France’s Orano.
The Nimba iron ore deposit holds round 1 billion tonnes of iron ore.
Nimba, located on border with Liberia, is just one of the world’s richest iron ore deposits found in Guinea, holding around 1 billion tonnes of the steelmaking ingredient.
The West African country is also host to the fabled Simandou project, which Rio Tinto, Vale and billionaire Beny Steinmetz’s BSG Resources fought over for years. However, Guinea has never exported a tonne as it lacks infrastructure to transport the ore to local ports.
Using a much shorter route through neighbouring Liberia would be cheaper and faster. The government, however, has repeatedly said ore should shipped via the country’s own ports. It has so far made an exception by allowing Niron Metals’s Zogota mine to send production by rail to Liberia and ship from there. It is not clear whether HPX has secured a similar rail deal.
The Vancouver-based firm plans to produce between 1 million to 5 million tonnes in a first phase, with a view to increasing output to at least 20 million tonnes. Under the deal, Guinea’s government will receive a 15% stake in Société des Mines de Fer de Guinée (SMFG), the company that owns Nimba. The government will also get two seats on SMFG’s board.
Guinea has struggled for decades to extract money from its iron ore, which has been left undeveloped because of protracted legal disputes and the cost of infrastructure.
“With local procurement of goods and services, local recruitment and training of the workforce, the upgrading of transport routes and infrastructure, and the resulting economic multiplier effects, we anticipate that major social and economic benefits will flow from the Nimba mine,” HPX president Eric Finlayson said in a statement.
Friedland made his fortune from the Voisey’s Bay nickel project in Canada in the 1990s. Since then, he has been involved in some of the biggest mineral discoveries in the world, including the giant Oyu Tolgoi copper mine in Mongolia and the Kamoa-Kakula project in Democratic Republic of Congo.