* Legal deadlock eased after BSGR settlement
* Western, Asian companies among those interested - officials
* Prospective developers face infrastructure challenge
By Saliou Samb
CONAKRY, July 22 (Reuters) - Guinea has launched an international tender for blocks 1 and 2 of Simandou, giving companies until Aug. 2 to outline their bids, as the country seeks to revive interest in the world’s largest undeveloped iron ore deposit.
Guinea’s aspirations to develop Simandou have foundered because of the cost of infrastructure and protracted legal disputes, but strong iron ore prices and the resolution of some of the problems have increased the chances that developers can be found.
Mines Minister Abdoulaye Magassouba told Reuters the international tender would be “open, competitive and transparent”. The deadline for companies to express interest was Aug. 2 and the process should be completed 30 days after that, an official close to the tender said.
Government sources, speaking on condition of anonymity, said western mining groups and companies from Asia, including China, had shown interest in Simandou, which has a very high grade.
High grade iron ore commands a premium and has become sought after by countries, including China, because processing it creates less pollution than lower grade ore.
Blocks 1 and 2 have become available following the resolution of one of the legal cases that have embroiled Simandou. Billionaire Beny Steinmetz’s BSG Resources (BSGR) said it would walk away from the Simandou project, but retain the right to mine the smaller Zogota deposit.
The Guinean government has said ore mined from Simandou must be shipped from its own ports, presenting a challenge for prospective developers as its location is 650 kilometres from Guinea’s coast.
Guinea has said ore from Zogota can be shipped using a Liberian route. Those involved in Zogota have said activity around the smaller, more manageable project could help to release the deadlock around Simandou.
One industry source said Australian iron ore company Fortescue Metals was interested in the Simandou tender.
Fortescue Metals had no comment.
The Facebook page representing the office of Liberian President George Weah said Fortescue chairman Andrew Forrest was among a group of potential investors who signed an outline cooperation deal on Liberian rail improvements on July 14.
Fortescue Metals said it had not signed a deal with Liberia over iron ore.
Anglo-Australian miner Rio Tinto holds a 45.05% stake in Simandou’s remaining blocks 3 and 4 which it has been trying to sell.
An outline deal to divest the stake to partner Aluminum Corp of China (Chinalco), which holds 39.95 percent, lapsed last year without producing an agreement, with sources citing as one obstacle China’s wish to control all four blocks.
Reporting by Saliou Samb in Conakry, additional reporting by Melanie Burton in Melbourne; Writing by Barbara Lewis and Helen Reid. Editing by Jane Merriman