Home Economy Liberia’s Railway ‘Impasse’ …Canadian Firm Ready To Spend US$600m

Liberia’s Railway ‘Impasse’ …Canadian Firm Ready To Spend US$600m

by newsmanager

CANADA: As the recent remodel agreement of Arcelor Mittal-Liberia passed by the House of Representatives lingered at the Senate, a mining company controlled by a Canadian/American billionaire, Robert Friedland, is counting on getting access to a Liberian railway in order to develop its Nimba project in neighboring Guinea, one of the largest untapped iron ore resources in the Mano River basin, West Africa.

According to reports, the High Power Exploration Incorporated wants to begin the development of Nimba — located near Liberia’s border and estimated to hold 1 billion tons of high-grade iron ore — next year.

This likely requires being able to use a railway that feeds Liberia’s Buchanan Port and which is being upgraded by ArcelorMittal SA, as routing supplies to the terminals in Guinea and Ivory Coast is much harder.

The Liberian government is now examining an amended agreement to let multiple users’ access the Yekepa-Buchanan rail line and port, but it is not clear what the extent of that access will be.

The reports added that Guinea has huge iron ore reserves — including the giant Simandou deposit — but has never been able to develop mines because of long-running disputes over ownership rights and the large investment needed to extract and transport the ores.

Finally getting a project up and running would be a big boost for the country and would start bringing more supplies to the market.

“A major attraction when you develop a bulk commodity type project is to be able and not too far from a port and, even better, to have access to an existing infrastructure,” Guy de Selliers, chairman of Societe des Mines de Fer de Guinee, HPX’s subsidiary in Guinea, told journalists. “The location of the project is one of its assets.”

HPX estimates it will cost almost $2.8 billion to develop Nimba, including $600 million for other rail and port development in Liberia. It’s targeting the first production in 2027 and wants to eventually extract roughly 450 million tons.

While Arcelor Mittal new agreement has been lingering in the Senate Corridors for ratification, the company (Mittal) has spent more than $500 million and will invest a further $200 million on the rail line and Buchanan port, although the decision as to who can use the link rests with the amended agreement that’s yet to be passed into law.

Concerning the amended agreement, the Liberian government looking at “establishing a very comprehensive non-discriminatory multi-user access regime for the rail and port,” the Luxembourg-based steelmaker said by email.

For HPX, the alternatives aren’t as attractive. It could build a railway through Ivory Coast to get materials to a port, but that would take longer and needs the help of other mining operations to justify it, de Selliers said. And Guinea itself doesn’t have the necessary infrastructure.

That’s partly why the Simandou deposit has remained in limbo. Interim President, Mamadi Doumbouya, who seized power in a September coup, initially encouraged Rio Tinto Group and China-backed SMB Winning Consortium to work together to develop Simandou. But the Doumbouya-led government recently said operations should stop, citing a lack of progress in talks between the two parties.

SMB Winning Consortium had already started work on a 650-kilometer (404 miles) railway linking the mine to the port. Source: @2022 Bloomberg L.P.

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