LONDON Dec 19 BHP Billiton has
selected mining venture B&A Mineração as the preferred bidder
for its stake in Mount Nimba, one of the largest iron ore
deposits in Guinea, a source familiar with the situation said.
B&A Mineração was founded by Roger Agnelli, the former chief
executive of Brazil's Vale, together with investment
bank BTG Pactual, which is controlled by billionaire
financier André Esteves.
The venture is hammering out conditions for exclusive talks,
the source said.
"BHP will enter exclusive negotiations with B&A to sell its
slice in Mount Nimba and its smaller iron ore assets in
Liberia," the source said.
BHP and B&A Mineração declined to comment.
B&A, a relative newcomer with bold ambitions in the sector,
beat rivals including ArcelorMittal, the world's
largest steelmaker, which is strapped for cash but owns a large
project of its own just over the border.
Market sources valued the potential deal at around $500
million to $600 million.
BHP, the world's largest miner, currently owns a stake of
just over 40 percent in the venture behind the Mount Nimba
deposit. Gold miner Newmont owns another 40 percent.
A third party, French power plant builder Areva,
is currently being bought out of the venture by BHP and Newmont,
leaving both with a 50 percent slice, a source familiar with the
matter said last month.
BHP decided earlier this year to pull out of its Mount Nimba
iron ore project and also cast doubt on the prospects of dozens
of West African iron ore projects.
Mount Nimba is not the first time Agnelli has targeted
Two years ago, when Agnelli was at the helm of Vale, the
world's largest iron ore miner pushed into the West African
country, taking a stake in assets including blocks of the giant
Simandou deposit, which had been confiscated by
the government from rival Rio Tinto.
The decision of the world's top miners to invest in
resource-rich Guinea and West Africa in recent years fuelled
local governments' hopes that a mining boom would benefit the
Development has often been slow, however.
Agnelli was ousted from Vale last year after a decade.
Analysts said his plans for a multinational Vale, did not chime
with the Brazilian government's own, more nationalistic view.