West Africa could become the next iron ore hot spot

West Africa could become the next hot spot for iron ore due to its untapped bounty of the key steel-making ingredient, with established mining giants and the Chinese both in hot pursuit of its riches.

Leading international miners have begun to make inroads in the region just as the Australian iron ore sector has taken a battering on a dive in spot prices.

According to Mining Australia Rio Tinto(NSYE:RIO) is now running the Simandou mine in Guinea where ArcelorMittal(NYSE:MT) and BHP Billiton(NYSE:BHP) also have the Nimba project, while Vale(NYSE:VALE) has its own operations in Liberia and Guinea. Xstrata (LSE:XSTA) is currently conducting feasibility studies on a small set of iron ore projects in Mauritania.

Perhaps even more important than the pursuit of projects by the long-established listed mining giants of the West is the keen enthusiasm of Chinese companies to develop their own iron ore mines in untapped territory.

John Welborn said at the 2012 Africa Down Under Conference that China is seeking alternate supplies of iron ore in Africa, which would enable it to break the oligopoly of supply enjoyed by BHP, Vale and Rio.

Anglo Gold Ashanti (NYSE:AU) CEO Mark Cutifani told the Sydney Mining Club earlier this year that China will shift away from Australia and Brazil for iron ore supplies and turn to Africa instead to meet its commodities needs, and goes as far as predicting a "Chinese/African century."

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