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MoU paves the way for Zogota rail export plan

Niron Metals has signed a Memorandum of Understanding with the Government of Liberia over using an existing heavy-haul railway and the Port of Buchanan, in order to develop the Zogota iron ore mine in Guinea.

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The plan would see iron ore exported via the Port of Buchanan
The plan would see iron ore exported via the Port of Buchanan

A new cross-border railway would also be required to connect the mine to the Liberian line, which is operated by ArcelorMittal. The latter’s concession allows for third-party access if spare capacity is available. Transporting ore to the established railway by road is also under consideration, and Niron aims to complete a feasibility study by the end of this year.

 

Niron was founded and is chaired by former Xstrata CEO Mick Davis.

 

The Government of Guinea has previously blocked all attempts to develop projects that would export Guinean iron ore via Liberian ports, but seems to have softened its stance since the start of this year. The two governments held talks on the matter in Senegal in April and signed a “joint vision of economic cooperation”, although it is not clear whether Conakry has yet officially sanctioned export via Liberia.

 

Iron ore deposits in southeast Guinea are located significantly closer to Liberian ports than Guinean ports, and the Liberian Government has long lobbied for cross-border projects.

 

It will be interesting to see whether the deal weakens Conakry’s resolve to insist on ore from the much larger Simandou reserves being exported from its own ports rather than those in Liberia.

 

The deal could be challenged by Vale on the grounds that Niron’s plans were linked to BSG Resources, which the Brazilian firm is suing for US$2B over their failed Simandou mine joint venture, for which the mining licence was revoked by Guinea in 2014 due to claims of corruption by BSG.

 

 

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