Dakar, Senegal — 12 November 2012 – The government of Senegal will resolve the current legal dispute with ArcelorMittal before it begins new negotiations with other companies on the development of the country’s iron-ore reserves.
“We are in the legal process for non-respect of the contract so that they can liberate the concession to another company,” said Birame Diouf, director-general of Societe des Mines de Fer du Senegal Oriental, known by its French acronym Miferso, in an interview here. “We await the verdict to start discussions with other companies.”
Bloomberg News reports that ArcelorMittal, the world’s largest steelmaker, signed a US$2.2 billion deal in 2007 that included building a rail line to the coast and upgrading the port in Dakar, with production scheduled to begin last year. The Luxembourg-based producer suspended the project in 2009 after the world financial crisis.
Hearings into the resulting dispute were held in September and a decision is due this year or early in 2013, ArcelorMittal said by e-mail. “Briefings and hearings as to damages could follow, depending on the decision,” the steelmaker said.
Energy and Mines Minister Aly Ngouille Ndiaye said on Nov. 6 he hoped the verdict would be given by the end of the year.
Senegal, in the Court of Arbitration of the International Chamber of Commerce, claims a breach of contract and estimates provisional damages of US$750 million, ArcelorMittal said.
The country’s eastern region has 600Mt of proven iron-ore reserves, Ndiaye said. Mining projects, including zircon and gold operations, will spur growth of the economy, the second-biggest in the eight-nation West African monetary union, to 4.3% this year, the International Monetary Fund says.
Diouf declined to name companies that may be interested in the resource.
Source: Bloomberg News. For more information, click here.