Glencore, ArcelorMittal seeking stake in Simandou: report
Mining titan Glencore (LON:GLEN) and ArcelorMittal (NYSE:MT), the world’s No.1 steelmaker, are said to be seeking a stake in the southern portion of Guinea’s Simandou, the world’s largest untapped iron-ore deposit.
People familiar with the matter told Bloomberg Thursday that ArcelorMittal is interested in the bidding process for two licenses covering the project.
Switzerland-based Glencore, which is also said to be in the race for Simandou, said in May it had a “key advantage” over the main iron ore producers. According to chief Ivan Glasenberg his firm has not been affected by the recent slump in the commodity prices, precisely because it is a small player in that market.
World number two miner Rio Tinto (LON:RIO) is developing the southern part of the vast mountain deposit with first production from the massive $20 billion project not expected until late 2018 at the earliest.
The northern part of the Simandou concession was held until recently by BSG Resources, a company in the stable of billionaire diamond magnate Beny Steinmetz, and Brazilian giant Vale (NYSE:VALE). However, the West African nation concluded in April that BSGR obtained the Simandou and Zogota concessions through corrupt practices and revoked all mining rights for both companies.
In an unexpected twist of event, Rio filed a legal action against both companies shortly after, for what it qualified as a “steal” of its previously-owned concessions.
Though it is far from ports, roads and rail, the iron ore studded in Simandou's hills is easily extractable. Those deposits are among the richest in the world and have the potential to transform the fortunes of the impoverished West African nation