June 4, 2014 / 6:30 PM / 5 years ago

UPDATE 1-Mauritania state mining firm signs iron ore deal with Glencore

(Adds comment from SNIM, background)

NOUAKCHOTT, June 4 (Reuters) - Mauritanian state mining firm SNIM has finalised a deal with Glencore Plc to exploit its Askaf iron ore mine in exchange for access to its rail, port and storage facilities, SNIM said in a statement on Wednesday.

The deal will last for 18 years following the start of production at the mine which is located in the northern region of Fderick, the statement said.

Commodities giant Glencore said in its last annual report it was assessing two iron ore projects in the West African country, Askaf and El Aouj, which it said had the potential to produce at least 22.5 million tonnes per year.

But in order to exploit the resources, located hundreds of kilometres from the Atlantic coast, it needed to access Mauritanian infrastructure.

SNIM Chief Executive Mohamed Abdellahi Ould Oudaa said the deal, which has been under discussion since at least 2012, was an “encouraging sign” for the El Aouj project with Glencore.

“This historical deal shows the willingness of SNIM to develop further the mining sector by encouraging foreign investors to invest in the country by making our infrastructure available for their production,” he added.

The company did not say when production would start or the total value of the contract. Glencore was not immediately available for comment. (Reporting by Laurent Prieur; Writing by Emma Farge; Editing by David Evans)

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