LONDON Nov 7 A mining venture co-founded by the
former boss of Vale, Roger Agnelli, is among suitors
eyeing BHP Billiton's slice of the Mount Nimba iron ore
deposit in Guinea, sources familiar with the matter said.
Other suitors for BHP's share of the joint venture
that holds the Nimba mining concession include the world's
largest steelmaker ArcelorMittal, which has a mine
just over the border in Liberia, the sources said.
A dealmaker by background, Agnelli is staging a return to
West Africa with billionaire banker Andre Esteves. Two years
ago, Agnelli led Brazilian miner Vale's push into Guinea,
controversially taking a stake in iron ore assets that included
blocks of the Simandou deposit confiscated by the government
from rival Rio Tinto.
Agnelli, 53, was ousted from Vale last year after a decade
at the helm. Analysts said his plans for a multinational Vale,
did not chime with the Brazilian government's own, more
He is returning to mining and Guinea through B&A Mineracao,
a partnership between his venture AGN Participacoes and Esteves'
investment bank BTG Pactual Group, just after Vale's
new bosses shelved their major commitment in the country.
They said the Simandou project was too costly at a time of
cooling demand and also complained about opaque regulation.
One of the sources said Jonah Capital, a private investment
company which is a partner of Anglo American subsidiary Kumba
Iron Ore in Liberia, was also among the suitors.
"The sale (of Nimba) is in a second phase now. B&A,
ArcelorMittal and other suitors have visited the site in Guinea
and Liberia and have made non-biding bids," one source with
knowledge of the situation said. "Later this month the companies
should come out with binding offers."
BHP currently owns a stake of just over 40 percent in the
venture behind the promising Mount Nimba deposit, along with
gold miner Newmont. A third party, French power plant
builder Areva, is being bought out of the venture,
which will leave BHP and Newmont with a 50 percent slice each,
one of the sources said.
BHP indicated earlier this year it was pulling out of
Guinea, as projects there and in neighbouring Liberia fell
victim to the global miner's focus on ma jor a s sets. It has since
said Australia and Brazil will alone be able to satisfy global
demand for iron ore - without recourse to new producing regions
like West Africa.
Investment bank Nomura is managing the sale, which is
expected to include other BHP concessions in Guinea and BHP's
projects in Liberia. One source put the potential value of the
sale at up to $500 to $600 million.
Nimba, an early-stage project , is a promising deposit but,
like most in Guinea and the broader region, it will need to
overcome a chronic lack of infrastructure. It also faces
environmental scrutiny, given its proximity to a World Heritage
"The logical buyer is ArcelorMittal. This is theirs to
lose," said another source close to the situation, pointing to
existing rail and other infrastructure the steel giant already
owns just over the border from BHP's Nimba.
"Agnelli has money to spend... but for a financial investor,
this is not the easiest asset to start with."
Arcelor is heavily in debt but has infrastructure and a mine
producing steelmaking ingredient iron ore just across the
BHP and ArcelorMittal held talks two years ago on combining
their Guinea and Liberia assets though negotiations failed.
BHP has said it is reviewing its projects in the region, but
declined to comment. ArcelorMittal, Areva and B&A Mineracao also
declined to comment. Newmont and Jonah Capital were not
immediately available for comment.