Billionaire Friedland close to deal with BHP on Guinea iron ore

Friedland greeting Kamoa-Kakula employees during a site visit. (Image courtesy of Ivanhoe Mines.)

Billionaire mining investor Robert Friedland is close to a deal to take over an iron ore deposit in Guinea from owners including BHP Group, according to people familiar with the situation.

Friedland is in advanced talks with BHP, Newmont Goldcorp Corp. and Areva SA, that will see him move to develop the Nimba deposit on Guinea’s border with Liberia, said the people, who asked not to be identified as the talks are private. A final deal has yet to be agreed, the people said.

The project has sat undeveloped for years. It’s unlikely the current owners will receive a significant sum for the asset, but will probably hold an interest should the mine be developed. Mick Davis, who is seeking to develop a neighboring iron ore mine through his Niron Metals vehicle, is also interested in the project, according to people familiar with the situation. The deal is likely to require government approval.

The Nimba iron ore asset, on Guinea’s border with Liberia, has sat undeveloped for years.

Spokesmen for BHP, Newmont and Niron declined to comment. Friedland also declined to comment.

While Guinea has some of the world’s richest iron ore deposits, including the fabled Simandou mine that Rio Tinto Group, Vale SA and billionaire Beny Steinmetz have fought over for years, it has never exported a ton. One of the major obstacles has been the cost of building a railway to export out of Guinea, rather than using a much shorter route through Liberia. Steinmetz and Guinea agreed to end their dispute earlier this year.

Key to developing Nimba would be getting access to a rail line operated by ArcelorMittal, which has its own iron ore mine across the border in Liberia. ArcelorMittal has said it would let other companies use it, assuming there’s spare capacity or they pay for upgrades. Niron won permission from Liberia and Guinea to export on that route last month.

Friedland has made some of the biggest mineral discoveries in the world over the past few decades, including copper deposits in Mongolia and the Democratic Republic of Congo. The talks over the Guinea iron ore deposit are taking place through his High Power Exploration group, one of the people said.