Huge blow to Gabon as BHP pulls out

Another African nation hoping to attract foreign investment has fallen victim of belt-tightening at the world's number one miner.

Reuters reports BHP Billiton is freezing all its projects – two planned manganese mine and an iron ore project – in Gabon and has already closed its office in Libreville.

The central African country is already the world's second-largest producer of manganese after South Africa and the decision has not been well received: "This situation is going to jeopardize the agreement signed between the government and the company for the exploitation of iron ore at Belinga," one official is quoted as saying.

BHP, which is well into a proces of shedding its non-core operations and putting large-scale projects on ice, withdrew from West Africa's Guinea in July last putting its Nimba iron ore project in the country up for sale.

World number one and two producers of the steelmaking ingredient Brazil's Vale and Anglo-Australian giant Rio Tinto have also put iron ore projects in West Africa on hold, to focus on expansion projects already under way in their home countries.

Iron ore prices are expected to moderate further this year from current levels around $130 a tonne as a slew of new mines come on stream.

Image: Gabonese President Ali Bongo Ondimba and Hillary Clinton by US State Department (State Department photo by Michael Gross)