* Arcelor to expand rail capacity to 20 mln T/year by end
* Rail will not have spare capacity even after Arcelor
* Liberia says rail has 50 mln T/year potential capacity
* Arcelor to produce 5-6 mln T of ore in Liberia next year
By Maytaal Angel
LONDON, April 11 Mining companies in Guinea such
as Sable Mining, who need a means to begin exporting
iron ore, will have to wait years to make use of an existing
rail link through Liberia, the railway's operator ArcelorMittal
said on Friday.
Liberia, which neighbours Guinea, has an existing rail link
to the Buchanan port on the Atlantic. This offers a far shorter
and cheaper export route for deposits such as Guinea's Mount
Nimba than a potential route across Guinea itself, which would
take years to develop and require heavy investment.
The export route is vital for mines to be profitable at
current prices. .IO62-CNI=SI
While ArcelorMittal, the world largest steelmaker,
is open to sharing the railway, it says it will not have any
spare capacity even after it expands the line to an annual
capacity of 20 million tonnes by the end of next year.
"I'm sceptical that we will see ore flow from Guinea through
Liberia in the next two years, I think it will take longer than
that, but I think it's a good thing for Guinea and Liberia to
make this happen," ArcelorMittal's head of government and
community relations, Joe Matthews, told Reuters.
The billions of dollars required to build rail or road
connections have frozen many West African iron ore projects and
rendered others all but impossible in an environment of
uncertain prices and tough access to cash.
Co-operation with neighbours is crucial for Liberia - an
emerging iron ore producer - and for Guinea, one of the world's
poorest countries whose giant untapped reserves could help it
Liberia's deputy minister of operations at the ministry of
mines, Sam Russ, told Reuters on Wednesday that he expected to
see Guinea's ore flowing through his country in the next couple
"We're looking at a very aggressive schedule. The framework
has not been worked out (but) the heads of state of Guinea and
Liberia are in agreement. I think in a year or two we'll see the
project going on stream," Russ said.
ArcelorMittal exported around 5 million tonnes of iron ore
from Liberia last year using all the current capacity on its
It expects to export the same amount this year, and around
5-6 million tonnes next year, with the railway's capacity
expansion scheduled for completion only towards the year-end.
It said that just assembling the equipment to expand the
line took 18 months.
For Sable to use the line in two years' time, it would need
to assemble equipment, expand the line and build an unloading
facility at the port all within that timeframe.
In addition to these technical challenges, there could be
financial as well as legal delays in concluding the framework
under which stakeholders Guinea, Liberia, ArcelorMittal, Sable
and other miners will operate.
"I don't know what Sable's financial capabilities are but if
they have to get ready in the next few years they must have done
lots of work already in Guinea," said Matthews, speaking on the
sidelines of a West Africa mining investment conference in
He added that Liberia and Guinea are very constrained in
terms of funds to help expand the railway, and want miners to
take on all the related costs.
Liberia's Russ remained optimistic: "Feasibility studies
have shown that the potential capacity of the line is 50 million
tonnes per year. Depending on signal rearrangement you can
increase capacity. If you have sidings where trains can move off
you can increase capacity."
Aside from Sable Mining, export through Guinea is also
critical for the other Mount Nimba deposit owned by major miner
BHP Billiton and gold miner Newmont.
Brazilian mining firm B&A Mineracao recently pulled out of
talks to buy BHP Billiton's stake in Mount Nimba amid questions
over Guinea's political stability and whether the government
will allow firms to export through Liberia.
(Reporting by Maytaal Angel; Editing by Anthony Barker)