Pretoria, South Africa — 06 September 2012 – Kumba Iron Ore “’ leading South African supplier of high quality iron ore to the global steel industry “’has clinched its first transaction in West Africa since the iron ore producer made known its renewed interest in the region in 2011, announcing a US$10.5 million Liberia-based greenfields exploration tie-up with Jonah Capital.
Jonah Capital said on Wednesay it would be a joint partner with Kumba in two exploration ventures at Gbarnga and Kalasi in Liberia. The $10.5m would be spent over three years before the projects are reassessed.
Jonah Capital, which previously secured ownership of the concessions, holds another four iron ore prospects in Liberia and has been operational in the country for six years.
Liberia, together with Guinea and Sierra Leone in West Africa, are emerging as a sought-after iron ore region. Around 17Mt of production capacity is expected to come on stream by the end of 2013, from below 2Mt at present.
“These are our only assets in West Africa at the moment, and the first to form part of our expansion strategy to West and Central Africa,” said a Kumba spokesperson.
Jonah Capital CEO John Barton-Bridges told Miningmx the group would act as managing partner during the exploration phase. “Our strength is in the early stage,” he said. “In future our roles will probably change.”
Former Kumba CEO Chris Griffith has on numerous occasions in the last year said the company was again looking to expand its footprint in West Africa. The company’s first venture in the region ended in a dispute with Senegal’s state-owner miner, Miferso, when the US$2.2 billion Faleme project in that country was awarded to ArcelorMittal in 2007. Kumba and Miferso reached a settlement in 2010.
The company also discontinued the Kamambolo exploration project in Guinea in 2008 due to unsatisfactory exploration results.
A number of UK and Australian-listed companies are digging for iron ore in Liberia, Guinea (Rio Tinto), Sierra Leone (London Mining), as well as the Republic of Congo – a country in which Exxaro Resources invested earlier this year with the takeover of African Iron.
An estimated 5,000 km of rail and 11 new or expanded port projects also need to be completed in West Africa in order to make the development of a new iron ore node feasible.
Source: Miningmx. For more information, click here.