Monrovia, Liberia — MININGREVIEW.COM — 15 June 2010 – More details have emerged about resources giant BHP Billiton’s intensified drive for African iron ore we reported on yesterday, as the company moves into a major agreement with Liberia.
Reports from here suggest that the latest move by BHP Billiton will allow the company to diversify its reliance on Australian mineral stores in the longer term. The bulk of BHP Billiton’s iron ore production comes out of Australia, where the resources industry is currently fighting a proposed 40% tax on resources super profits.
At the weekend it was reported that BHP Billiton had signed a landmark mineral development agreement with the government of Liberia. The agreement was expected to pave the way for new iron ore operations in Liberia’s Nimba, Bong, Grand Bassa and Margibi counties.
According to independent newspaper the “Liberian Observer”, some details of the agreement released by the government put BHP Billiton’s total investment portfolios in the country at about US$3billion (R22.5 billion). Negotiations reportedly took 18 months to conclude.
“The Australian” newspaper reported that BHP Billiton was planning to develop an iron ore hub in West Africa. It said the company planned to combine development of its Nimba iron ore deposit in Guinea, on the Liberian border, with that of the four Liberian deposits it has been excavating. Nimba was expected to cost more than US$2billion (R15 billion) to develop.
"The company believes the area is home to some of the world’s richest deposits of iron ore, and says it has parallels to the 1960’s start-up of Western Australia’s famed Pilbara iron ore region,” the newspaper reported.
While there has been no direct connection between the Liberian deal and Australia’s new tax regime, BHP Billiton has said that the tax would force it to prioritise global investment opportunities ahead of those in Australia.
Mining groups have viewed the proposed new tax as the greatest sovereign risk facing their companies globally.