October 13, 2008 / 8:43 AM / 11 years ago

FACTBOX: African iron ore projects

(Reuters) - Almost 1.3 billion tonnes of steel will be consumed in 2008, up 6.7 percent from last year, according to the International Iron and Steel Institute, and projections suggest growth of more than 6 percent next year too. As steel demand rises, steelmakers need more iron ore, a key ingredient in the metal.

Here is a list of actual and planned iron ore mines across Africa, some of which may feed world demand for the mineral:


ArcelorMittal ISPA.AS MTS.PA, the world’s biggest steelmaker, owns 70 percent of two iron ore mines in the North African country, Ouenza and Boukhadra, which between them produce around 1.5 million tonnes per year and have resources of 132 million tonnes.


Australian firm Sundance Resources (SDL.AX) owns 90 percent of CamIron, which holds exploration rights to the Mbalam project in the south of the country, close to the border with Gabon. The company aims to produce 35 million tonnes per year for at least 20 years, with operations seen starting in 2012.

A pre-feasibility study estimated capital costs at around $3.3 billion for the mine, 490 km (304 miles) railway, and port.


Last year, privately-owned British firm Mining Projects Development said it had found large deposits of iron ore at the Zanaga site in Lekoumou region, in the south of the country. Earlier exploration work suggested there could be 500 million tonnes of ore. This year, the Brazzaville government said the project required investment of $2 billion, including money to build a 300 km railway line from the deposit to the port at Pointe Noire.


State-controlled Egyptian Iron & Steel (IRON.CA) supplies domestic steelworks from its El Gedida and El Bahariya mines.


State-owned China National Machinery & Equipment Import & Export Corporation has signed a $3 billion deal to build an iron ore mine in the Belinga mountains in the remote north-east of the country, as well as a 560 km railway line and port on the Atlantic coast.


Iron ore occurs at three main deposits, Shieni, Oppong Mansi and Pudo, while recent discoveries have been made at Adum Banso, which are yet to be fully evaluated, according to Ghana’s Ministry of Lands, Forestry and Mines. None of the deposits are being exploited.


Rio Tinto (RIO.L)(RIO.AX) owns 95 percent of the Simandou project in the south-east of the country, close to Mt Nimba, while the Guinean government has the option to buy 20 percent. Currently at pre-feasibility study stage, Simandou has already cost $300 million and Rio estimates it to be a $6 billion project with 2.25 billion tonnes of ore resources. Production is due to begin in 2013 at 8 million tonnes, ramping up to 70 million tonnes by 2018.


Last December, India’s Tata Steel (TISC.BO) said it would invest $1 billion to $2 billion to build an iron ore mine on the Mt Nimba deposits in a 75-25 partnership with Ivorian state mining firm SODEMI. The project is in its initial phase of exploration and detailed feasibility studies.


Liberia was the world’s fifth-biggest producer with annual output reaching 24 million tonnes per year before the 1989-2003 civil war brought the industry to a standstill.

ArcelorMittal is developing iron ore deposits with estimated resources of 1.5 billion tonnes, into a 25 million tonnes per year mine at a cost of around $1 billion.

The country intends to hold a bidding round for the $1.5 billion Western Cluster iron ore deposit, from which India’s Tata Steel (TISC.BO) and South African-based Delta Mining Consolidated have been disqualified for breaking the rules in an earlier bidding process.

Separately, explorer Mano River Resources (MNO.V)MANx.L owns 80 percent of the Putu Range iron ore project in the east of the country.


State-run Libyan Iron and Steel Co (LISCO) has capacity to produce 650,000 tonnes of hot-briquetted iron and 1.1 million tonnes of sponge iron at Misurata.


State-controlled Societe Nationale Industrielle et Miniere (SNIM) runs the Guelb el Rhein, Kedia d’Idjill and M’Haoudat iron ore mines around the town of Zouerate in the northern province of Tiris. Ore is carried by railway 700 km to Nouadhibou on the Atlantic coast for export. SNIM produced around 12 million tonnes of ore last year, and estimates it has reserves to last 100 years at this production rate.

It is the seventh largest supplier of iron ore to the international market, and accounts for around 40 percent of Mauritania’s export earnings.

SNIM has formed a partnership with Australia’s Sphere Investments SPH.AX to develop Guelb el Aouj, a $2.2 billion project with 429 million tonnes of reserves, and initial production seen at 7 million tonnes per year. Industries Qatar, a former partner, pulled out of the project weeks after August’s military coup in Mauritania. Sphere is also exploring for iron ore at Bou Derga and Tintekrate, close to Guelb el Aouj.

ArcelorMittal signed a deal with SNIM in January to develop the El Agareb project, which it estimates to contain 1 billion tonnes of ore.

A third SNIM joint venture, with China’s state-owned Minmetals, expects to produce 2.5 million tonnes at Tazadit-1 by 2010.


State-controlled National Iron Ore Mining Company digs ore at Itapke to supply the Ajaokuta Steel Company, also state-controlled, after previous operator Global Infrastrucrure Holdings Limited was stripped of its concessions earlier this year.

In May, Australian resources junior Black Fire Energy BFE.AX said it planned to buy a package of Nigerian iron ore deposits in Kogi state, home to Ajaokuta and Itapke, from Ado Ibrahim Mining Co, a company owned by regional leader King Dr Ado Ibrahim.

SENEGAL ArcelorMittal signed a deal with Senegal last year to develop the Faleme project in the south-east of the country. The firm intends to spend $2.2 billion on the project, including building a new port near capital Dakar and 750 km railway line linking it to the mine, which is estimated to contain 750 million tonnes of reserves. Production is expected to start in 2011, and at full capacity will produce 25 million tonnes per year.

The project is the subject of a dispute between Senegal and Kumba Iron Ore (KIOJ.J), majority owned by Anglo American (AAL.L). Kumba, which says it exercised its option to buy a controlling interest in Faleme before Mittal appeared, has started an arbitration process against Senegal.

SIERRA LEONE Production in the 1960s reached 3 million tonnes per year under the now-defunct DELCO, but infrastructure was destroyed or stolen in the civil war in the 1990s. Investors are returning to Sierra Leone: the Marampa project, 80 km east of capital Freetown is at the center of an ownership dispute. Last month London Mining LOND.OL served a writ on African Minerals AMIq.L, who then said they would sue for trespass. London estimates it can produce 1.5 million tonnes per year through open pit mining, on top of 1.5 million tonnes per year from a tailings deposit.


Kumba Iron Ore, part of Anglo American, is the world’s fourth largest supplier of seaborne ore and expects 2008 output to be between 37 million and 38 million tonnes from its Sishen and Thabazimbi mines. In July it said it would spend 8.5 billion rand ($1.07 billion) on a new mine at Sishen South, due to start production in the second half of 2012 and ramp up to full capacity of 9 million tonnes per year by 2013. Kumba estimates its total resources including reserves are more than 3.3 billion tonnes.

Assmang, jointly owned by African Rainbow Minerals (ARIJ.J) and Assore (ASRJ.J) produces around 6 million tonnes per year at its Beeshoek mine in Northern Cape Province, while the Khumani mine is expanding to produce an extra 6 million tonnes a year from its current output of 10 million.

Highveld Steel and Vanadium, owned by Russia’s Evraz HK1q.L, produces iron ore at the Mapochs mine to supply the Vanchem plant.


Tunisian state-owned firm Societe de Djebel Djerissa mines iron ore at Djerissa and Tamera, which have combined capacity of 250,000 tonnes.


Zimbabwe Iron and Steel Co (ZISCO) digs iron ore at the Ripple Creek Mine, which has annual capacity of 600,000 tonnes.

Sources: Stock Exchange announcements, U.S. Geological Survey, company publications, Reuters

(Compiled by Daniel Magnowski; editing by Christopher Johnson)

$1=7.965 Rand

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