BHP Billiton plans $3-billion iron ore investment in Liberia
14 June 2010
Anglo Australian miner BHP Billiton has signed a deal with the Liberian government to invest around $3 billion in developing four iron ore deposits as it seeks a bigger play in the West African state and a closer location to ship iron ore to Europe and North America.
BHP Billiton, which has spent about $40 million on iron ore exploration in three counties of Liberia since 2005, signed a framework agreement this month that has to be passed by the National Legislature for ratification, to exploit greenfield iron ore deposits discovered in Nimba, Bong, Grand Bassa and Margibi counties of Liberia.
The Liberian government said that the total investment committed by the Melbourne-based world's largest miner to be in the region of $3 billion.
The Australian media quickly jumped to conclude that BHP Billiton was investing in Liberia and not Australia because of the government May 2010 proposal of imposing a 40-per resource tax on mining profits despite the miner having been in talks with the Liberian government on the deal for the past 18 months.
BHP Billiton plans to combine the operations of its 600 million tons of iron ore deposit at Nimba in Guinea, close to the Liberian border, with the four Liberian deposits since it can avail of the existing 250km-long rail line that runs from Liberia's border with Guinea to Liberia's coast of Buchanan to ship the ore.
BHP has been taking since January 2010 with ArcelorMittal, the world's biggest steelmaker to combine the development and transportation of its Nimba operations with the steelmaker's five Liberian iron ore deposits since they are close to each other.