LONDON, Oct 24 (Reuters) - Mining company BHP Billiton said it was still in talks to sell its stake in a major iron ore deposit in Guinea, despite lengthy negotiations that have prompted questions over the potential for a deal.
Sources familiar with the matter said in December that BHP had selected mining venture B&A Mineracao, co-founded by the former boss of Brazil’s Vale Roger Agnelli, as the preferred bidder for its slice of the Mount Nimba iron ore deposit.
Their talks have now dragged almost a year. At least one source familiar with the matter has since said interest on the suitor’s side had cooled.
“The discussions continue,” BHP CEO Andrew Mackenzie told shareholders at the group’s London annual general meeting on Thursday, adding that B&A had not yet reached a decision.
Mount Nimba - like other major iron ore projects in Guinea including the giant Simandou deposit - has faced questions over the stability of the West African country and the possibility of exporting through neighbouring Liberia, which is vital to making mines profitable at current prices.
It has also been unclear whether BHP would continue the talks, started under its previous management team, if buyer appetite eased off and at a time when iron ore prices have held up.
Mackenzie said BHP was in no rush to sell assets cheaply if they are not proving a problem to the company. Yet he also said there was no change of direction in West Africa as BHP concentrates on its Pilbara operations in Australia.
“We have over 100 years of resource in the Pilbara, and by far and away the best opportunity for this company is, in a capital efficient way, to grow the productive capacity of the Pilbara - that overwhelms our strategy for iron ore,” he said.
BHP, the world’s largest miner, owns just over 40 percent in the venture behind the Mount Nimba deposit, and gold miner Newmont owns another 40 percent.
BHP decided last year to pull out of Mount Nimba as it exits iron ore and other projects across West Africa.
B&A officials could not immediately be reached for comment.