* Wants to cooperate with majors in Guinea
* Sources said Glencore expressed interest in Simandou
* Vale hopes to recover $1.2 bln spent in Guinea
(Adds Glencore comment on Rio's plans)
By Silvia Antonioli and Alexandra Reza
LONDON, Aug 5 Miner and commodity trader
Glencore has expressed interest in iron deposits in
Guinea, a presentation obtained by Reuters shows, although the
company said it had not pitched for a stake in Simandou, the
country's largest deposit.
Glencore is the latest mining major looking to invest in
iron ore assets in Guinea. Most interest is focused on Simandou,
one of the world's biggest deposits.
Any potential investors in Simandou are treading carefully,
Israeli-owned BSG Resources, which was stripped of its
license to develop part of Simandou following a Guinean
corruption investigation, is seeking arbitration and has
threatened to sue companies that invest in its former license
Three sources close to the government said London-listed
Glencore had indicated its interest in investing in Simandou, in
a meeting with government officials in Conakry in June.
A copy of a power point presentation, which the sources said
a Glencore representative delivered at the meeting, includes a
reference to Glencore having the financial and technical ability
to develop big projects in the region and "the willingness to
proceed very quickly together with the government to the
exploitation phase of iron ore projects".
A spokesman for Glencore declined to say whether any
presentation was made to officials or to comment on the document
obtained by Reuters. But he said the company had not made any
presentation expressing interest in the Simandou mine.
The presentation does say that Glencore would be well placed
to cooperate with other companies that hold interests in
Simandou, such as Vale and Rio Tinto
and says that Glencore could push the majors to develop
infrastructure in Guinea more quickly.
Glencore, whose exposure to iron ore is much smaller than
that of rivals Vale, Rio Tinto and BHP Billiton
, has in the past been critical of rivals for pursuing
costly greenfield projects.
It has also criticised them for producing large additional
volumes of iron ore, which have driven down prices by almost a
third this year.
In the presentation, the Swiss-based company said it is keen
to become one of the top five producers of iron ore through
projects in Africa.
"Iron ore is an absolute priority for Glencore, because it
is the only sector where the company wants to strengthen its
position noticeably," the company said in the presentation.
"Glencore goes against the trend of the trio (BHP, Vale and
Rio), because it wants to develop the Guinean projects quickly,"
In its presentation Glencore said Rio does not intend to
move quickly to produce high volumes of iron ore from Africa
before 2020, as its focus is on growth projects in Australia.
Rio Tinto, which declined to comment, only has the one iron
ore project in Africa.
SIMANDOU'S TANGLED HISTORY
Simandou has been known for over 100 years but political
instability and rows among companies and governments meant its
treasure remains untapped.
Its exploitation would boost dramatically the GDP of Guinea,
one of the poorest countries in Africa. Exports from Simandou
require an investment of about $20 billion, much of which
relates to infrastructure.
Rio Tinto and China's Chinalco have the rights to develop
the southern half of the deposit, which will take at least three
more years to build.
The northern half is at the centre of a corruption case that
has led the Guinean government to strip the rights to develop it
from previous holders Vale, the world's largest iron ore
producer, and BSGR, the mining branch of the business
conglomerate of Israeli billionaire Beny Steinmetz.
An array of legal cases followed, with companies accusing
each other and the government of wrongdoing.
As the government prepares for a new tender for the mining
concessions on the northern half however, some companies have
shown interest in the project, the sources said.
"Simandou is simply too big for a single miner to foot," one
of the sources said. "It will end up being developed by a
substantial consortium, I expect, that will include multiple
majors, and a series of financial parties. However, Glencore is
one of the more interesting prospects."
Among parties showing interest are also steelmaker
ArcelorMittal, BHP Billiton and the Chinese
government, willing to secure access to a strategic raw material
for its industrial development.
BHP Billiton declined to comment while ArcelorMittal Chief
Financial Officer Aditya Mittal played down its interest in
Simandou last week saying it was far away from its existing
Liberian iron ore mine.
Brazilian miner Vale, which hopes it can recover at least
part of $1.2 billion it spent in Guinea before seeing its rights
confiscated, could also be part of such a consortium. After
taking a partial writedown on the Guinea investment, the company
now hopes to be granted by the government a chunk of the money
it spent, either as credit in a potential bid or paid to them by
the winner of the bid.
(Additional reporting by Stephen Eisenhammer and Daniel Flynn;
editing by Jane Baird and William Hardy)