UPDATE 1-Liberia says signs $3 bln iron deal with BHP

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MONROVIA, June 14 (Reuters) - Mining giant BHP Billiton <BLT.L.(BHP.AX) has signed a deal with the government of Liberia to go ahead with a $3 billion iron ore project, an official in the West African country said on Monday.

The mineral development agreement (MDA) will allow BHP Billiton to continue exploring for iron ore at Goe Fantro, Kintoma, St. John River South and the Tolo Range, National Investment Commission chairman Richard Tolbert said.

"We are delighted to have reached this agreement with BHP Billiton following 18 months of discussions," Tolbert said, adding the MDA was subject to approval by parliament. Many of the world's biggest mining firms have this year signed deals for iron ore projects in West Africa, as prices of the steelmaking raw material have risen after slumping in 2009. (Reporting by Alphonso Toweh; Editing by Daniel Magnowski)