[miningmx.com] — Resources giant BHP Billiton has increased its drive for African iron ore, a move that will allow it to diversify its reliance on Australian mineral stores in the longer term.
The bulk of BHP Billiton’s iron ore production comes out of Australia, where the resources industry is currently fighting a proposed 40% tax on resources “super profits”.
At the weekend it was reported that BHP Billiton has signed a landmark mineral development agreement with the government of Liberia.
The agreement is expected to pave the way for new iron ore operations in Liberia’s Nimba, Bong, Grand Bassa and Margibi counties.
According to independent newspaper the Liberian Observer, some details of the agreement released by the government put BHP Billiton’s total investment portfolios in the country at about $3bn.
Negotiations reportedly took 18 months to conclude.
Super tax is greatest global risk
The Australian newspaper reported that BHP Billiton was planning to develop an iron ore hub in West Africa.
It said BHP Billiton planned to combine development of its Nimba iron ore deposit in Guinea, on the Liberian border, with that of the four Liberian deposits it has been excavating.
Nimba is expected to cost more than $2bn to develop.
“The company believes the area is home to some of the world’s richest deposits of iron ore and says it has parallels to the 1960s start-up of Western Australia’s famed Pilbara iron ore region,” the newspaper reported.
While there has been no direct connection between the Liberian deal and Australia’s new tax regime, BHP Billiton has said the tax would force it to prioritise global investment opportunities ahead of those in Australia.
Mining groups have viewed the proposed new tax as the greatest sovereign risk facing their companies globally.