[miningmx.com] – BHP BILLITON declined to comment on Monday on
reports it has reached a deal to develop an iron ore mine in Gabon, which could add
more than 1 billion tonnes to the world’s third biggest iron ore miner’s resources.
A member of the official Gabonese delegation in charge of overseeing the Belinga
project said on Friday the government had reached an agreement with BHP Billiton to
exploit the mine after it was taken away from China National Machinery and
Equipment Import and Export Corp (CMEC).
When asked about the deal, BHP spokeswoman Kelly Quirke declined to comment.
Any deal would give BHP access to potentially large resources of iron ore in a region
in Africa where China and BHP’s bigger iron ore rivals, Brazil’s Vale and Rio Tinto, are
already active.
“This is early stage. There’s an enormous amount of work to be done to realise that
investment,” said James Bruce, a portfolio manager at Perpetual, which owns BHP
shares.
“As an option for BHP it’s sensible, however, it doesn’t at this stage alter the
investment logic for an investor in BHP.”
CMEC beat Vale to win the Belinga concession in a 2007 deal, but Gabon has now
taken it back from the Chinese firm in a bid to speed up the development of the
project, which includes building a port.
Iron ore was BHP’s biggest earner last year, accounting for 42% of its underlying
profit, with production of 134 million tonnes.
The company holds 19.3 billion in iron ore resources in Australia’s Pilbara and about 6
billion tonnes of lower quality ore in Brazil.
BHP is already working in Gabon, aiming to develop a 300,000 tonnes-a-year
manganese mine.
