AMN - GUINEA: HPX picks up large iron ore deposit

High Power Exploration (HPX) has secured rights to develop a large iron ore deposit in Guinea left undeveloped for years by its previous owners. HPX is a private company led by chairman and chief executive officer Robert Friedland.

The 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.

Nimba, on the border with Liberia, is one of the world’s richest iron ore deposits, holding around 1 billion tonnes of the steelmaking ingredient.

The West African country is also host to the 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 the 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 be shipped via the country’s own ports. It has so far made an exception by allowing Niron Metals’ Zogota mine to send production by rail to Liberia and ship from there.

Subject to all necessary approvals, HPX plans to bring a starter mine of one to five million tonnes per year into production as quickly as possible while feasibility studies are being completed for an expanded operation of at least 20 million tonnes per year.

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.

HPX president Eric Finlayson said in a statement: “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.”

The company recently announced at a signing ceremony in Conakry that it had received consent from the Government of the Republic of Guinea to acquire the 95% interest in the Nimba.

The ceremony was attended by His Excellency Alpha Condé, President of the Republic of Guinea, and His Excellency Kgalema Motlanthe, the former President of South Africa, along with Eric Finlayson.

Mr Finlayson announced that His Excellency Kgalema Motlanthe and Guy de Selliers de Moranville had agreed to become co-chairmen of the HPX subsidiary that will hold the Nimba asset and both have joined the board of SMFG.

In a 2015 review completed by the US Geological Survey, the Nimba deposit, which is in the Forestière region of south-eastern Guinea, is estimated to comprise around a billion tonnes of high-grade iron ore containing very low levels of impurities. Iron ore of this quality is essential for reducing energy use, greenhouse gas emissions and slag production during the steel-making process.

Mr Finlayson said, “I am delighted that HPX will work with the Government and people of Guinea to bring the Nimba deposit into production and to help His Excellency President Condé realise his long-standing vision of seeing Guinea become a world-class producer of iron ore.

“As a catalyst of sustainable economic development in Lola Prefecture and in the greater Forestière region, the mine will ensure long-term protection for the nearby Mount Nimba Strict Nature Reserve.

"We are acutely aware of the importance of this world heritage area and are fully committed to preserve its unique features and to implement the Nimba project in a way that is a model for responsible sustainable development.”

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 the Democratic Republic of Congo.

www.hpxploration.com